Obama eyes a booming Indonesia to create jobs in the US
President Barack Obama was in Bali today, where Boeing and an Indonesian airline signed a $21 billion contract that the US hopes will boost American business via Indonesia's growing economy.
Southeast Asian and American corporations announced billions of dollars in trade deals during President Barack Obama’s visit to the Indonesian island of Bali, where issues such as trade and security have dominated meetings between the 10-member Association of Southeast Asian Nations (ASEAN).Skip to next paragraph
In Pictures Obama's Pacific trip
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President Obama spoke briefly Friday at the signing of a multibillion dollar deal between Indonesia’s Lion Air and Boeing, the US firm’s largest ever commercial agreement, calling it a “win-win” solution for Southeast Asia’s growing middle class and American workers.
Boeing’s plan to sell 230 aircraft valued at $21.7 billion to Lion Air, the largest airline in Indonesia, could produce more than 110,000 US jobs. GE also agreed to sell 50 CFM56 engines to Indonesia’s state-owned airline Garuda for $1.3 billion.
Announcements of big private sector trade agreements are typically made during US presidential visits, though the deals have often been in the works for months or years and may never come to full fruition.
Obama has put export promotion at the center of his nine-day tour of the Asia-Pacific, where strong growth is expected.
Analysts say Indonesia is a key part of Obama's hopes for an Asia-driven US economic recovery. The country's $700-billion or so in annual gross domestic product (GDP) accounts for roughly 40 percent of all of ASEAN. The country of 240 million people is set to grow by 6.5 percent this year, even amid global economic turmoil, thanks largely to a low reliance on exports coupled with buoyant domestic demand from a young and rapidly growing middle class.
Trade still has room to expand between Indonesia and the US, its No. 4 trade partner, behind China, Singapore, and Japan. In 2010, the US only exported about $6.9 billion worth of goods to the country, about the same level as tiny Costa Rica.
But while US investments in oil and gas remain high, Indonesia’s Asian neighbors have already gained a foothold here in manufacturing and consumer goods. Japan’s 7-Eleven convenience stores have multiplied across Jakarta since the company teamed up with local firm PT Modern Internasional in 2009. China currently supplies mining companies with heavy machinery and, along with South Korea, is investing in much-need infrastructure projects and energy.