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Opinion Editorial-The Wall Street Journal (Opinion Asia)-“America and Indonesia Grow Together”

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OPINION EDITORIAL

Thursday, June 17, 2010

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Secretary of Commerce Gary Locke
Opinion Editorial, The Wall Street Journal
America and Indonesia Grow Together” 

Indonesian officials are eager to attract investment that can provide prosperity for their people.

I know President Obama deeply regrets having to postpone his trip to Indonesia this month. But after my mission to the country this month, where I met prospective business partners, vendors, customers and 11 different government ministers, I want to underscore a simple message: America's business community still wants to invest in Indonesia.

The world's most populous Muslim majority democracy is a newly-minted Group of 20 member country with strong economic performance, stable democratic governance and plentiful business opportunities. The officials I met are clearly eager to attract investment that can provide prosperity for their people. When U.S. companies find success in Indonesia, they directly support jobs back home, too.

Indonesia has weathered the global economic crisis better than most. The country posted a 4.5 percent growth rate last year, the third-highest in the G-20, and expects to grow as much as 6 percent this year. This is no accident: Sound macroeconomic policies have led to higher sovereign debt ratings, lower borrowing costs and an uptick in FDI. The country's strong banking framework buffered it from the worst effects of the global financial turbulence.

Some observers, including this newspaper, have expressed concerns over the departure of Indonesia's reform-minded Finance Minister, Sri Mulyani. But democracies are resilient and designed to withstand the passing baton of individual leadership. As the world's third-most-populous democracy, Indonesia is no exception.

The Obama administration recognized Indonesia's potential for American exporters and investors. We recently signed an updated Overseas Private Investment Corporation agreement with Jakarta that includes important new protections for American investors and unlocks up to $1.4 billion in insurance coverage in the form of financing, political risk insurance and investment funds. The Export-Import Bank has also stepped up trade facilitation with Indonesia, including recently assisting Boeing in its sale of more than $1 billion worth of U.S.-manufactured aircraft to Indonesian airlines.

Boeing is hardly the only American company to discover the emerging opportunities in Indonesia. Caterpillar has signed deals in recent months amounting to hundreds of millions of dollars in heavy equipment sales to first-time Indonesian customers. Oshkosh, an American manufacturer of emergency equipment, is also finding growing Indonesian demand for its products.

There are many more deals to be had. Once a member of the Organization of the Petroleum Exporting Countries, Indonesia is now a net importer of energy. The country seeks to double its renewable energy generation capacity over the next 15 years, even as it upgrades poor distribution systems that leave much of the country with inadequate power. Indonesia needs American partners with access to the technology, financial services and expertise to help it meet these challenges.

While there is an abundance of opportunities in Indonesia, the country is not immune to some of the same issues we see in other rapidly growing developing economies. American business leaders' overriding concern is a lack of government transparency. Businesses frequently don't know what the rules are, how they will be enforced or how decisions are made. This is particularly true at the local level, where bureaucratic bottlenecks can lead to years-long delays on projects.

I believe our two countries can forthrightly address these areas of disagreement because we share fundamental core values, both economically and culturally. We are among the biggest democracies in the entire world. Moreover, the U.S. and Indonesia believe in the power of entrepreneurship to revolutionize industries, create jobs and grow economies. I'm confident our future can be marked by deepening cooperation. That includes formally establishing the U.S.-Indonesia Comprehensive Partnership—a blueprint for cooperation on a host of issues, from trade and investment to education and the environment.

Indonesia is signaling a gradual opening of its economy for international business. The U.S. government stands alongside our business community, ready to be a long-term partner.