It’s not just about ‘Instant Noodle’ Diplomacy

Kementerian Luar negeri RI

Foreign Minister Retno LP Marsudi was the keynote speaker at a meeting of Nigerian and Indonesian business people, last Monday (5/6), in Lagos, Nigeria. The Indonesia-Nigeria Business Forum was attended by more than 140 business actors from both countries in various sectors.

The COVID-19 pandemic has forced Indonesia to further strengthen its trade diplomacy. The government and the private sector have also taken a number of approaches, including the promotion of business cooperation in e-commerce, the establishment of business links between foreign buyers with small and medium businesses or industries and the establishment of counter-trade schemes. The strategies and types of products have been expanded in accordance with the successful “coffee and instant noodle” diplomacy.

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The head of the Indonesian Trade Promotion Center (ITPC) in Lagos, Nigeria, Hendro Jonathan, said on Tuesday (24/8/2021) that he would not rely only on the successful “instant noodle diplomacy” to promote Indonesian trade in Nigeria. The diversity of Indonesian products needed to be continuously increased, both through conventional trade and e-commerce.

"It\'s not enough just to rely on the popularity of Indonesian instant noodles. [Such companies] have invested heavily in Nigeria," Hendro said during a virtual business talk.

One is a brand from Indonesia, which controls about 74 percent of the instant noodle market in the country.

In 2019, Nigeria was ranked 12th in the world in the consumption of instant noodles. Annually, Nigerians consume 1.76 billion packages of instant noodles. There are 16 brands of instant noodles sold in the country. One is a brand from Indonesia, which controls about 74 percent of the instant noodle market in the country.

Recently, ITPC Lagos initiated a new breakthrough by bridging the partnership between Konga.com and an Indonesian e-commerce platform. Konga.com is a Nigerian e-commerce platform based in Gbagada, Lagos state, and was founded in 2012. Hendro said the cooperative effort was intended to build an e-commerce hub company that would enable Indonesia to sell products more easily to Nigeria by integrating into the country’s e-commerce logistics ecosystem.

KOMPAS/CAECILIA MEDIANA

The atmosphere of Indomie\'s instant noodle production at the Salim Wazaran Maghreb Manufacturing Tiflet factory, Khemisset, Morocco, on Tuesday (26/6/2018).

Through the initiative, Indonesian business or industry players can open an online store at Konga.com or at least be listed as a link source in a number of online stores of local Nigerian merchants. Hendro said a number of Indonesian products had been sold in a number of e-commerce sites in Nigeria through third parties, not by Indonesian producers.

The manufacturers often do not know the product has been marketed in Nigeria. In addition, many traders from other countries, such as China, sell products similar to those produced in Indonesia, such as batik and Muslim clothing. "If such a practice continues or is left unchecked, the Indonesian brand that produces the original product will never be recognized in Nigeria," said Hendro.

Indonesia has also made a new breakthrough by developing bilateral trade cooperation under a government-to-government and business-to-business scheme. Within 1.5 months, the Trade Ministry signed a number of memoranda of understanding (MOU) on business-to business counter-trade schemes with Mexico, Russia and Germany. The MOU with Germany was signed on Aug. 12, while those with Mexico and Russia were signed on July 2 and Aug. 4, respectively.

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State-owned company PT Indonesia Trading Company (PPI) has been appointed the Indonesian Counter-Trade Implementing Agency with the three countries. With Germany, for example, PPI will cooperate with Saffron Group Company Ghassem Hassanzadeh. The head of ITPC in Hamburg, Germany, Eka Sumarwanto, is committed to overseeing the implementation of the counter-trade cooperation.

For credit guarantees and logistics services, the government is cooperating with state-owned credit insurance firm Asuransi Kredit Indonesia and Kurhanz Tran.

The business-to-business counter-trade scheme is supported by financial companies, which can provide low-lending rates, credit guarantees and logistics services with non-commercial margins. The Indonesian Export Financing Agency (LPEI) and state-owned Bank Negara Indonesia (BNI) will provide various financing options in the form of working capital or investment loans. For credit guarantees and logistics services, the government is cooperating with state-owned credit insurance firm Asuransi Kredit Indonesia and Kurhanz Trans.

Diaspora

The government, together with the Indonesian Chamber of Commerce and Industry (Kadin) and the export training center called Sekolah Ekspor (Export School), is also encouraging exports through the Indonesian diaspora, who have become entrepreneurs in a number of countries. The diaspora are engaged in the trade, industry, retail, logistics, integrated warehousing and distribution sectors.

KOMPAS/RIZA FATHONI

Container loading activities to ships at JICT Port, Tanjung Priok, Jakarta, Wednesday (29/4/2020).

In the United States, there are approximately 142,000 members of the Indonesian diaspora. They can serve as a big resource to take advantage of the country\'s market. "We will further promote a dialogue. The existing data will be knitted together to support the establishment of an export development road map for 500,000 new exporters from MSMEs [Micro, Small and Medium Enterpries]," said Handito Joewono, the head of the Sekolah Ekpor.

These various efforts indicate that the COVID-19 pandemic has also helped the establishment of new initiatives to create new exporters from MSMEs.

(This article was translated by Hendarsyah Tarmizi).