http://www.ft.com/cms/s/0/88399d7a-3...debd57852.html

UK prime minister puts £1bn towards infrastructure in Indonesia

David Cameron pledged £1bn in financing for Indonesian infrastructure projects from sewage treatment to geothermal power as he began his tour to promote UK trade in Southeast Asia.

The prime minister arrived in Indonesia on Monday on a four-day Asian tour, during which he hopes to capitalise on the region’s growth to create business opportunities for UK companies, 31 of which have joined him on his trip.

The prime minister said: “As Indonesia seeks to grow and develop it can benefit from British expertise — whether that is our leading engineering and energy companies helping to deliver the president’s ambitious plans for infrastructure, or British brands like Marks and Spencer or Debenhams meeting the demands of Indonesia’s consumers.”

The trip marks the start of months of diplomacy for Mr Cameron with Asian countries as he seeks to promote British exports outside Europe. Later in the year both the Chinese president and Indian prime minister will visit the UK.

Mr Cameron on Monday promised to use his government’s export guarantee scheme to provide £1bn in financing for projects such as one for sewage treatment in Jakarta, worth £400m. That financing is part of a British attempt to diversify its investment in Indonesia from oil and gas and towards infrastructure, where Chinese investors have been playing an increasingly prominent role.

British officials hope to sign £750m of new trade deals during the trip, which they said would create 270 British jobs.

Mr Cameron is also pushing for a free-trade agreement between the EU and the Association of Southeast Asian Nations, which he says could “turbo charge” growth across the single market and add £3bn a year to the UK economy.

But he was urged by Joko Widodo, Indonesian president, to go further to boost bilateral trade. Mr Widodo asked Mr Cameron to lower import duties on a range of products, from timber and fishing products to coffee and clothing.

Despite its strong relationship with the previous administration, analysts warn the UK may find it difficult to open up new trade routes in Indonesia. Mr Widodo has shown little interest in international relations and has developed a reputation for protectionism in recent months. “The last government was the most international Indonesia has ever had,” says Kevin Evans, a political analyst based in Jakarta. “This president . . . has a much more domestic focus than his predecessor.”

The leaders also agreed measures to counter the “shared enemy” of the Islamic State of Iraq and the Levant, or Isis. As such, Britain will help increase security at airports in Bali and Jakarta, in part by training 50 Indonesian police in counter-terrorism techniques.

The move follows reports suggesting Isis is recruiting heavily in Indonesia. About 500 from Indonesia, which has the world’s largest Muslim population, and 200 from Malaysia are thought to have joined Isis in Iraq and Syria.

Mr Cameron said: “We are both concerned about the threat from [Isis] and determined to defeat these terrorists.” Isis was a shared enemy, he added, “and it is right we share our expertise. By uniting together we can better protect our countries from this evil threat”.

Indonesia is often held up as a success story in fighting terrorism. US-funded counter-terrorism police have successfully kracked down on militant groups in the country since the 2002 Bali bomb.

Mr Cameron will travel from Indonesia to Singapore, Vietnam and Malaysia, promoting British trade. But the Financial Times revealed last week that the trip to Malaysia has caused controversy, given the scandal over alleged corruption around Najib Razak, the premier.