INDONESIAN government officials expressed disappointment with the level of direct Australian investment into its cattle industry at the Northern Beef Industry Forum last week.
Investment Promotion Indonesian Investment Co-ordinating Board deputy chairman Himawan Hariyoga said Indonesia expected more direct investment from Australia as its main trading partner in the cattle industry.
According to Mr Hariyoga, Indonesia would like Australia to view it not only as a big market, but as a prospective production and marketing base for its cattle and beef products.
He said Australia needed to understand food security was a serious political and economic issue for Indonesia, as a large country with an economy driven primarily by domestic consumption.
Mr Hariyoga added both Indonesia and Australia needed to take a longer term and much broader perspective of bilateral trade and investment in the future.
"If we look at statistics into direct investment between Australia and Indonesia we will agree the current amount is relatively small as compared to what people would expect from these neighbouring countries, that have a combined gross domestic product of about $2.2 trillion ($US2 trillion)," Mr Hariyoga said.
He said Australian investors ranked Indonesia at 14th position as an important investment nation, while Australia was ranked 11th by Indonesia.
Mr Hariyoga said that Indonesian data showed direct foreign investment into cattle and livestock industry in Indonesia since 2009 was $2.4 billion consisting of $1.5 billion of foreign direct investment, and $896 million of domestic investment," he said.
He said foreign direct investment in cattle production, comprising breeding, raising and production supporting activities was $87 million.
Foreign direct investment in the livestock industry, including manufacturing of animal feeds, slaughter house, meat packing and processing and amounted to $1.4 billion.
"We noted foreign direct investment in Australia in the capital and livestock industry was only $7.05 million since 2004... which put Australia far below Thailand, Malaysia, UK, USA, Switzerland, Hong Kong and South Korea."
Mr Hariyoga said Indonesia offered significant unrealised investment opportunities.
"We would like Australia to more seriously consider Indonesia as a production and marketing base for Australian cattle and beef products, as Indonesia is promoting value adding investment in natural resource based sectors," he said.
"By doing so Australia can continue to serve the huge and growing market of Indonesia but it can also capture other Association of Southeast Asian Nations member countries."
Mr Hariyoga said investment into Indonesia was not easy, citing challenges with infrastructure, land acquisition, legal regulatory and labour issues.
"We stand ready and are more than happy to facilitate to assist Australian investors who are seeking investment opportunities in Indonesia or who are having difficulties realising investment in Indonesia," he said.
"Let's work together to work out the detail and identify possible business to business investment opportunities including some quick wins, projects or showcases.
"Let's identify the game changers and the enablers, or the factors that enable the opportunities to be realised."
