The United Arab Emirates will invest $32.7 billion in Indonesia

[ASEAN NOW Content Team]

 

The Indonesian government has obtained investment commitments totaling US$32.7 billion (S$44.2 billion) from corporations in the United Arab Emirates in a variety of areas, including vaccine manufacture and distribution.

The investments were announced last Thursday (November 4) during President Joko Widodo's visit to the United Arab Emirates to strengthen his personal ties with Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al Nahyan.

The 19 investment commitment accords, according to Foreign Minister Retno Marsudi, involved collaboration between the Indonesian Investment Authority and Dubai-based international logistics giant DP World.

 

Pertamina, the state-owned oil corporation, is set to sign an agreement with Masdar, an Abu Dhabi-based renewable energy provider, on floating solar panels.

G42, an artificial intelligence firm based in Abu Dhabi, is also expected to invest in smart city initiatives, telecommunications, and genomics research.
In September, G42 travelled to Indonesia to meet with its partners.

Indonesia and the United Arab Emirates also agreed to expedite negotiations on a comprehensive economic partnership deal (Cepa).
Mr Widodo expects the deal to be finalised as early as March next year, following multiple rounds of negotiations that began in September.

 

The Cepa talks are part of the UAE's aggressive effort to open up markets in fast-growing nations including South Korea, Kenya, Ethiopia, and Turkey.

With international travel expected to pick up, the two countries agreed to recognise each other's Covid-19 vaccine certificates and reinforce the travel corridor agreement that has been in place since July of last year.

"There will be ten agreements for government-to-government (deals)," Ms Retno stated in an online press briefing last Thursday.
Agreements on investment promotion, taxation, central bank collaboration, tourism, and mangrove forest management, she claimed, were among them.

 

According to Statistics Indonesia, Indonesia's goods exports to the UAE amounted for less than 1% of overall exports in September.
According to Investment Ministry data, the UAE accounted for a very modest portion of overall foreign direct investment in the third quarter of 2021, with only US$5.8 million realised.

Mr Fithra Faisal, an economist at the University of Indonesia, said the UAE's small percentage of Indonesian exports and direct investment made it a possible non-traditional market to penetrate, especially as both countries are mostly Muslim.

 

In a phone interview with The Jakarta Post on Thursday, Mr Fithra said, "We are seeking potential in the future, not simply existing (trade and investment)."
"Because the UAE excels at this, we expect to see an increase in service activity."

For Mr Widodo, the biggest draw has been the commercial agreements.
He chose to visit a country that has been quite receptive to his trade and investment agenda, following high-profile stops at the Group of 20 (G-20) Summit in Italy and the United Nations COP26 climate change summit in Scotland earlier in the week.

When the President arrived in Abu Dhabi, he met with the Prince and invited him to attend the G-20 conference in Bali next year as a special guest.