Ambassador Yuddy Chrisnandi: "Important to increase direct business contacts between Indonesia and Ukraine"
An exclusive interview with Ambassador Extraordinary and Plenipotentiary of Indonesia Prof. Dr. H.Yuddy Chrisnandi, S.H., M.E., for the Interfax-Ukraine news agency
Q: Relations between Indonesia and Ukraine have been developing dynamically in past years. How do you estimate the level of utilization of the potential of Ukraine-Indonesia cooperation in the economic and political spheres? In which spheres is this potential being realized most effectively?
A: There is a dialogue mechanism between the two countries. In particular, it is the Indonesia-Ukraine Joint Commission and the Joint Consultation Forum that can continue to be activated as a forum for bilateral cooperation in the political, economic, trade, and technical spheres.
Both platforms have been well implemented, their meetings are held regularly both in Indonesia and in Ukraine. What is further needed is to make efforts to have more active participation from all stakeholders in the meetings, so that all results of the discussions and agreements produced during such meetings can be implemented properly.
Q: According to our statistics, Indonesia is not yet among top 20 importers/exporters of Ukraine. What are the figures of trade between the two countries recorded by your country's statistics agency and do you have any plans to boost commodity turnover between the countries? In which branches of economy do you see potential for growth?
A: The total value of bilateral trade in 2018 was $864.46 million, it was $835.84 million and $872.63 million in 2017 and in 2016, respectively. The value of bilateral trade is expected to exceed $1 billion in the coming year.
Key staples of Indonesian exports to Ukraine are palm oil and its derivative products, while Ukraine ships mainly wheat and derivatives to Indonesia. This shows that agricultural cooperation can be a trigger for increased economic and trade cooperation between the two countries.
In the past five years, Ukraine has been the second largest trading partner for Indonesia in Central and Eastern Europe after Russia. In contrast, Indonesia is one of Ukraine's biggest trading partners from the ASEAN region.
Q: Palm oil accounts for the largest share of Indonesian exports. Many Ukrainians consider palm oil to be an unhealthy product. Can you bust this myth?
A: Indonesia is the largest exporter of palm oil in the world. In 2017, Indonesia met 81.6% of Ukraine's demand for palm oil. Palm oil is mostly used for cooking and is added to many ready-to-eat foods. This oil is also found in many non-food products, such as toothpaste, soap and cosmetics. In addition, it can be used to produce biodiesel fuel which serves as an alternative energy source.
Palm oil is an Indonesia's flagship commodity. It is extremely versatile, high yielding and competitive. However, for last decade Indonesia's palm oil is facing various challenges. One of the biggest challenges is a negative campaign against palm oil promoted by other vegetable oil producers. This negative campaign becomes increasingly intense, structured, systematic, and massive, involving international and local anti-palm oil NGOs and using mass media and social media. The negative campaign does not only touch the environmental issue but has spread to economic, social, and particularly health issues, which affect public opinion globally including in Ukraine.
The unhealthy reputation of palm oil is baseless. It is scientifically proven that palm oil contains the three major fat types in proportions similar to those in the human body, namely: palmitic acid, omega-9 oleic acid, and omega-6 linoleic acid. And, the monounsaturates contained in palm oil help to lower 'bad' LDL cholesterol. Palm oil also contains essential A and E vitamins (carotenoids and tocotrienols). In fact, palm oil has been linked to several health benefits, including protecting brain function, reducing heart disease risk factors and improving vitamin A status.
We see the bad opinion against palm oil as a reflection of the fear of non-producing countries and the efforts to protect their own vegetable oil production. Thus, negative campaign against palm oil is an act of protection and discrimination against specific products and this is unacceptable under global trade rules.
Q: Statistical reports show that wheat and corn accounted for the lion's share of Ukrainian grain exports in the nine months of 2018 (11.2 million tonnes and 13.7 million tonnes, respectively), while the share of barley (2.5 million tonnes) is also significant. The largest buyers of Ukrainian grain were Egypt (11.5% of the value of supply), China (8.8%), Spain (7.3%), the Netherlands (7%), Indonesia (5.9%), Saudi Arabia (5.7%), and Italy (5%). Global demand for grain is growing faster than the supply. Ukraine has all the prerequisites to become one of the key grain producers and supplier on the global market. Indonesia is already a stable buyer of Ukrainian grain. Does your country face any challenges in phytosanitary control of grain supplies? And how do you assess prospects for cooperation in agriculture, including farm produce shipments from Ukraine to Indonesia?
A: In 2013-2017, grain imports from Ukraine to Indonesia were steadily increasing. In 2017, grain shipments totaled $328,625 which placed Ukraine as the second largest seller of grain to Indonesia after Australia. Wheat and meslin, and maize or corn are among the top detailed products imported by Indonesia from Ukraine, not to mention other products such as buckwheat, millet, grain sorghum, barley, oats, and rye.
In the middle of 2018, Indonesian authorities issued a number of non-compliance notifications related to the consignments of Ukrainian wheat grain infected with some fungi namely Tilletia indica, Tilletia tritici, and Tilletia laevis. In order to minimize any risks – either current or potential – that may be associated with these fungi, hence Indonesia phytosanitary authorities are requiring that all the wheat grain exported to Indonesia has to undergo heat treatment to ensure wheat grain free from viable germinated spore of those fungi and no any live stage of quarantine pest. The treatment has to be done in the country of origin (Ukraine) and effectively entered into force on January 1, 2019.
Agriculture products feature highly in trade between Indonesia and Ukraine. Indonesia needs Ukrainian cereals, dairy products and berries while Ukraine needs Indonesian palm oil, coffee, tea, cocoa, and other plantation crops. Alongside those key commodities, there are opportunities in emerging markets that Ukrainian exporters should be harnessed. A growing population and middle class in Indonesia, and a high rate of urbanization have led to changes in the dietary patterns and food demand of the future. Higher incomes and better knowledge tend to make consumers demand healthier and more diversified food. Hence, there is a large potential market for superfood in Indonesia like pulse crops which develop well in Ukraine. Besides, although a majority Muslim nation, there are opportunities to grow the wine and pork market in Indonesia, recognizing that non-Muslim minority populations in Indonesia account for over 30 million consumers and with increasing international visitors to Indonesia, there is also a visitor market for this produce.
Q: GDP of Indonesia increased by 5.2% in 2018; your country's government plans to reach 5-5.4% in 2019. According to the predictions of Standard Chartered PLC, Indonesia will reach the top 10 economies in 2020 and it will be fourth in the list of countries in terms of GDP in 2030. Which financial and economic measures will help to achieve such goals?
A: Indonesia is the largest economy in Southeast Asia and is one of the emerging market economies in the world. The country is also a member of G20 and classified as a newly industrialized country. Starting from 2015, under the President Joko Widodo administration, the Indonesian government has launched about 16 economic policy packages that aim to improve efforts to maintain the country's fiscal and monetary stability, which also includes controlled inflation; prioritize an open economic system; cut bureaucracy to become more efficient; build infrastructure facilities to accelerate regional economic growth; encourage the private sector and the community to develop independent businesses; increase the competitiveness of domestic industries for international markets, and; to ease the process for foreign direct investment.
Q: Ukrainians have started to travel more due to positive changes in the visa-free regime with many countries and more international airlines announce new flights to Ukraine. To which cities and by which airlines are there flights between Indonesia and Ukraine? Are there any changes that might take place in 2019-2020?
A: I see that more and more residents and tourists from Ukraine visit Indonesia. Even though there are no direct flights yet without transit from Ukraine to Indonesia and vice versa, but nowadays there are several international airlines that have connected the destinations of the two countries, such as: Qatar Airways, Turkish Airlines, KLM, as well as Emirates. Their main destination is through Bali and Jakarta.
I am of the view that the most important thing is to strive to increase the number of tourist visits to each country. For this reason, the Indonesian Embassy continues to disseminate information on tourist destinations to the people in Ukraine, including through websites, business forums with local business people and visits to Ukrainian tour operators or trips of writers to Indonesia.
Q: What is the current situation with visas for citizens of Indonesia to Ukraine and for Ukrainians to Indonesia?
A: Based on Presidential Decree Number 21 of 2016, around 169 countries were freed from the obligation to have visa for visiting Indonesia, including citizens of Ukraine. The decree provides visa-free travel for up to 30 days of stay. Those travelling without visas can go out and enter through 124 immigration checkpoints on land, sea and air.
Indonesia expects its citizens can get the same convenience when visiting Ukraine. This is part of the efforts of the two countries to improve people-to-people contact.
Q: Do you have any statistics related to tourism? How many citizens of Ukraine visited Indonesia in 2018? What are the dynamics? How many Indonesian citizens have visited Ukraine? Are there any plans for Indonesia to introduce incentives for Ukrainians to visit your country?
A: Some 23,468 Ukrainian tourists visited Indonesia in 2018, whereas there were 32,964 Ukrainians in 2017 and 14,076 in 2016. The increasing number of visits shows the desire of Ukrainian tourists to get to know more about arts, history and natural beauty of Indonesian tourist destinations. In general, Bali is most popular with Ukrainian tourists.
The number of Ukrainian tourists as well as international tourists decreased in 2018 because of an earthquake which shook the Bali region and its surrounding in July-August 2018. Tours and flights were canceled for the safety of tourists.
It is expected that in future they will also be able to visit other areas which are Ten New Bali destinations in various regions in Indonesia. These are: Lake Toba (North Sumatra), Tanjung Lesung (Banten), The Thousand Islands (Jakarta), Tanjung Kelayang Beach (Bangka Belitung Islands), Borobudur Temple (Central Java), Mount Bromo (East Java), Mandalika (West Nusa Tenggara), Labuan Bajo (East Nusa Tenggara), Wakatobi (South Sulawesi), and Morotai Island (North Maluku).
However, only fewer than 1,000 Indonesian tourists visited Ukraine in 2017.
Q: What achievements is Indonesia proud of in the world markets and what is the situation with the realization of such achievements in Ukraine?
A: The main Indonesia's exports commodities in the world market are: rubber, textile goods, palm oil and its derivatives, cocoa, and coffee. While Indonesia's exports to Ukraine, among others, are: palm oil, rubber, electric machinery/tools, coffee, footwear, cocoa, and paper. In future, Indonesia hopes to meet the demand of the Ukrainian market for such commodities as: tropical fruit, fish and seafood, furniture/forestry products, and various ready-made/packaged foods.
To make this happen, I consider it important to increase direct business contacts between Indonesian and Ukrainian business people. This year, Indonesia plans several activities in Ukraine that present companies or Indonesian business people to be able to attend exhibitions or business meetings.
For the above said reason, the Embassy supports the efforts and projects of Indonesian companies/ businessmen who open their business in Ukraine, for example:
- YA Limited; located in Kyiv, its core business is nanotechnology and chemical industry.
- Mesail Bisnis Internasional (MBI); located in Kharkiv, its core business is export-import of wheat and palm oil.
- Indonesian Social Kitchen Restaurant 17.804; located in Kyiv, its core business is public catering and restaurant.
Q: Indonesia is among the promising partners of Ukraine in the military and technical cooperation in Southeast Asia: the supply of Ukrainian armored and aviation equipment, as well as the repair and modernization of weapons under the order of the Indonesian military, are among the issues of military and technical cooperation. As Head of Ukraine's Ukroboronprom Concern Pavlo Bukin said, Ukraine is ready to offer its Indonesian partners joint projects in aircraft manufacturing and shipbuilding, as well as in high-precision weapons. How do you assess the prospects for the development of cooperation with Ukraine in the military-industrial sphere?
A: Indonesia is currently continuing to develop its defense forces to be able to protect its territory and strive to be able to meet the minimum targets for its armed forces. And for that, good personnel are needed and supported by adequate defense equipment.
Indonesia welcomes all cooperation of friendly countries including Ukraine who want to sell weapons and military equipment to Indonesia. Our country will always consider the offer if it is supported by technical cooperation. This has also been supported by the signing of the two countries' defense cooperation agreement in 2016.
Q: Is any visit of high-ranking officials of Indonesia to Ukraine in the pipeline this year? Do you expect leaders of Ukraine to visit your country this year?
A: Yes we are working on the possibility of a high level visit from Indonesia this year, to reciprocate the visit of Ukrainian President Petro Poroshenko to Indonesia in 2016. However arranging a visit this year will not be an easy task because Indonesia will have general elections in April 2019. But we will do our best to make it reality.
Q: One of the areas that Indonesia and Ukraine can cooperate in is the fight against corruption, in the form of sharing of experience.
A: Yet, I agree. One of the areas that Indonesia and Ukraine can join hands is the fight against corruption, we can share experience and exchange information.
Indonesia has achieved a notable success in this particular area in the last two decades. In the wake of the crippling Asian financial crisis in 1997, Indonesia in 1998 made a historic decision to undergo a massive political overhaul called "reformasi," which includes amendments to the Constitution, regional autonomy, the election system by introducing direct presidential election, and establishment of an anti-corruption agency called "Komisi Pemberantasan Korupsi" (Corruption Eradication Commission), or the KPK.
Twenty years later the KPK has proven itself as a very effective body. Equipped with strong political support from the government, parliament, and the society, the KPK has succeeded in spearheading a nation-wide movement against corruption. As a result, we can see now the growing culture of transparency, openness, and accountability, in basically all sectors – government or private, which further translates into a growing confidence of investors and business communities about Indonesia. Now, Indonesia is the seventh largest economy (in terms of Purchasing Power Parity, PPP), the fact that many international observers would never had predicted twenty years ago.
What Ukraine can learn from Indonesia is that it is possible to make significant changes in the short term. Also, from Indonesian perspective, it is important that Ukrainian people have extensive references about reform success stories that can be incorporated into the Ukrainian national strategy of corruption prevention and economic development.
Q: Indonesia is inhabited by more than a hundred nations and nationalities of different religions, now almost 270 million people officially live in the country, and with all this, civil peace is preserved in the country. What is the secret here?
A: There's no short answer to this question. There are so many factors that contribute to the harmonious life in Indonesia. Among the most obvious are, firstly, we speak one language although we have hundreds of local languages. Secondly, the bond that created between ethnicities was born from our common history in fighting colonial power. Thirdly, in Indonesia we understand that differences are assets, they enrich lives. We learn from each other and we appreciate each other. I think those are the secrets, among many other things, to the harmonious life in Indonesia.