As the Saudi Crown Prince and Prime Minister Mohammed bin Salman bin Abdul Aziz and UAE President Sheikh Mohamed bin Zayed Al Nahyan are attending the 17th G20 Heads of State and Government Summit in Bali, it’s time to review their bilateral and economic relations with Indonesia.
While Indonesia and Saudi Arabia had established diplomatic relations in 1950, the bilateral ties between the Abu Dhabi and Jakarta are friendly and cordial since 1976.
Since 1976, the Kingdom, through the Saudi Fund for Development (SFD) has contributed to strengthening the pillars of sustainable development in its various fields and forms in the Republic of Indonesia.
The Kingdom has also funded, through SFD, Indonesian (12) development projects and programs in the sectors of transport, communications, agriculture, infrastructure, ports, health and education, with a total amount of more than US$401.6 million. These projects and programs contribute to social growth and economic prosperity to support the fraternal government and people of Indonesia.
The trade balance between Indonesia and Saudi Arabia has increased by 31.34 percent compared to the same period last year. Indonesia’s non-oil and gas exports to Saudi Arabia have increased in the second quarter of 2021 by 27.24 percent compared to the same period as last year. This year there is an increase in demand, including in such products as fish, wheat, processed food, vegetables, and fats/vegetable animals.
UAE-Indonesia ties
The UAE-Indonesia relations have always been strong since their inception, but they have enjoyed additional momentum in recent years, with the establishment of constructive partnerships in vital sectors.
Indonesia — one of the nations that immediately recognized the United Arab Emirates upon its independence in 1971 — signed a free trade agreement with the UAE on July 1, 2022. The agreement will come into force once it is ratified by both countries. Indonesia, which has established the trade and investment representative office to promote its products in UAE and the Middle East region — uses the country as the main gate to enter the Persian Gulf and Middle East market.
Most recently, the UAE Business Forum held on the sidelines of the annual G20 meeting in Bali witnessed the signing of 16 memorandum of understandings.
Among the 16 MOUs was a deal between G42 and its subsidiaries Presight.ai and G42 Healthcare with Indonesian healthcare AI firm, Asaren, while Burjeel Holding Group signed an MOU to develop a healthcare facility through a strategic partnership with the Indonesian Mitra Jaya Group.
Etihad Airways, GAL/AMMROC and Sanad signed MOUs in aircraft maintenance, with MOUs on electric mobility and defence agreements signed by BarQ EV and Lahab respectively. A further seven MOUs were signed around cooperation on the organization of the 2023 Annual Investment Meeting in Indonesia in 2023.
The forum, led by Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade, Ahmed Ali Al Sayegh, Minister of State, and Luhut Binsar Pandjaitan, Indonesian Coordinating Minister for Maritime Affairs and Investment as well as a group of senior officials, brought together business leaders from UAE and Indonesia to explore emerging opportunities for cooperation between the business communities.
The Forum was one of the first major investment conferences to take place since the signing of the UAE-Indonesia Comprehensive Partnership Agreement in July, likely to be ratified in the coming weeks.
The boom in UAE-Indonesia relations was reflected in the growth of non-oil trade to a record US$2.8 billion in the first nine months of 2022, an increase of 33 percent compared to the same period of 2021, and a record growth of 104 percent compared to the same period of 2020.
The UAE is among the top 20 trading partners of Indonesia and its second largest trading partner in the Arab world, while the value of investment agreements signed between the two parties reached more than $32bn since 2019.