Foreign Relations: Trade Between Indonesia and Sweden
Indonesia and Sweden intend to increase business relations between both countries. Last month, Indonesia's president Susilo Bambang Yudhoyono made a state visit to Sweden, while in 2012 Sweden prime minister Fredrik Reinfeldt visited Indonesia. A number of topics were discussed during these visits, including trade and investment. After the discussions, both countries agreed that trade and investment between the countries should be expanded. Up to early 2013, 77 Swedish companies are in operation in Indonesia.
At the National Day of Sweden & Midsummer Celebration, which was organized in June 2013, a number of Swedish companies were present. They outlined their business development plans in Indonesia. In sum, these companies feel that Indonesia is a market that cannot be neglected as its economy grows at a level of 6 percent and contains a burgeoning middle class. As such, there should be demand for products from Sweden, which are known as innovative products.
One potentially interesting product is Clean Motion's plan to market its mini electric car (called Zbee) in Indonesia. This vehicle might be a good alternative for public transport in a city like Jakarta. The Zbee bears a significant resemblance to the 'bajaj', a small three-wheeled vehicle that functions as a sort of taxicab.
Moreover, the Zbee's advantage is that it is an environmental friendly product. Therefore, Clean Motion believes that there will be demand for this product in Indonesia. As a test, the company will produce 100 units through a joint venture with a company in Banyuwangi (East Java).
Apart from Clean Motion, department store IKEA is reported to open its first shop in Tangerang (West Java) in 2014. Investment to open this first branch is budgeted at less than USD $100 million. The company is certain that its branch will become a popular shop, although located outside Jakarta.
Coming September, Swedish fashion brand H&M plans to open two shops in Jakarta. Toward the future, the companies wants to establish a whole chain of shops in Indonesia. Similarly, Volvo intends to expand its business in Indonesia and even though its products are quite expensive for Indonesian standards, the company believes there will be large demand for its products. The car manufacturer already opened a new branch in Kalimantan in 2012. Its products do not only involve cars, but also trucks, buses as well as mining machinery.
Based on information from the website of the Secretariat of State, trade between Indonesia and Sweden is rising. In the last five years, trade between the countries has risen 6.91 percent. Total trade in 2012 amounted to USD $1.46 billion, a 28 percent increase from 2011 (USD $1.05 billion).