UAE, Indonesia eye strong boost in trade, investments via new pact
SINGAPORE (ICIS)–The UAE and Indonesia on 1 July signed a free trade pact which will remove or sharply cut duties on most goods traded between the two countries.
The deal is expected to “increase bilateral trade to beyond $10bn within five years”, UAE President Mohamed bin Zayed Al Nahyan said in post on Twitter on 1 July.
Total trade between the two countries was valued at $4bn in 2021, according to the Indonesian Ministry of Trade.
The UAE’s main exports to Indonesia are non-crude oils, petroleum gases and iron or non-alloy steel, while Indonesia’s key shipments to the UAE are palm oil, precious metals and jewelry, according to trade data platform the Observatory of Economic Complexity.
UAE’s total exports to Indonesia last year stood at $1.9bn, while imports from the UAE amounted to $2.1bn, Indonesia’s trade ministry stated.
In the first four months of 2022, total trade between the two countries were up 15% year on year at $1.5bn, with exports from Indonesia at $714m and imports at $831m, it said.
Indonesia hopes that the trade pact will attract more investment from the UAE, the ministry said.
In 2021, the total investment by the UAE in Indonesia totaled $16.1m (double checking – just in millions? – yes ), it said, adding that the potential of higher trade and investment within the framework of the free trade deal was massive.
The UAE Ministry of Economy expects the trade pact with Indonesia to increase the value of trade in services between the two countries to $630m by 2030 and create 50,000 jobs for skilled workers in the UAE within the same time frame.
The Indonesia-UAE Comprehensive Economic Partnership Agreement was signed during Indonesian President Joko Widodo’s visit to Abu Dhabi.
The full text of the trade agreement has not been released and the pact still needs to be ratified by both countries.
Focus article by Nurluqman Suratman