UAE firms to invest $44b in various Indonesian industries

Investment deals inked during Indonesian leader's visit to Gulf state

JAKARTA • Indonesia has secured US$32.7 billion (S$44.2 billion) in investment commitments from United Arab Emirates businesses in sectors such as vaccine manufacturing and distribution.

The investments, announced last Thursday, came as President Joko Widodo visited the UAE to deepen personal ties forged with Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al Nahyan.

Foreign Minister Retno Marsudi said the 19 deals involved cooperation between the Indonesian Investment Authority and Dubai-based multinational logistics company DP World.

State-owned oil giant Pertamina is expected to ink an accord on floating solar panels with Abu Dhabi-based renewable energy company Masdar.

Also, Abu Dhabi artificial intelligence company G42 is expected to invest in smart city initiatives, telecommunications and genomics laboratories. G42 officials visited Indonesia in September to meet their partners.

Indonesia and the UAE also agreed to speed up talks on a comprehensive economic partnership agreement (Cepa). After several rounds of negotiations that started in September, Mr Widodo expects the deal to be finalised as early as March next year.

The Cepa negotiations are part of the UAE's aggressive attempt to open markets in fast-growing economies such as South Korea, Kenya, Ethiopia and Turkey.

With international travel set to rebound, both countries agreed to mutually recognise their Covid-19 vaccine certificates and to strengthen the travel corridor arrangement that has been in place since July last year.

"For the government-to-government (cooperation) (deals), there will be 10 agreements," Ms Retno told an online press briefing last Thursday. She said these included agreements on investment promotion, taxation, central bank cooperation, tourism as well as mangrove forest management.

Data from Statistics Indonesia shows the country's goods exports to the UAE accounted for less than 1 per cent of total exports in September. Of the total foreign direct investment in the third quarter this year, the UAE also accounted for a very small fraction, with just US$5.8 million realised, Investment Ministry data shows.

University of Indonesia economist Fithra Faisal said the UAE's small share in Indonesia's exports and direct investment made it a potential non-traditional market to tap, especially as both countries were predominantly Muslim.

"We are pursuing potential in the future, not just existing (trade and investment)," Mr Fithra told The Jakarta Post last Thursday.

The business deals have been the main attraction for Mr Widodo. Fresh from trips to Italy for the Group of 20 (G-20) summit and to Scotland for the United Nations Climate Change Conference earlier in the week, he chose to visit a country that has been receptive to his trade and investment agenda.

Upon his arrival in Abu Dhabi, Mr Widodo met the crown prince and invited him to be the guest of honour at the G-20 summit in Bali next year. Prince Sheikh Mohammed, in turn, named a road after Mr Widodo, who reciprocated by naming a stretch of the Jakarta-Cikampek toll road after the prince.

They also discussed Mr Widodo's project to build a new capital in East Kalimantan. The crown prince leads a committee that oversees the new city's construction.

"The two leaders agreed to follow up on the matter intensively at the technical level," Ms Retno said.

THE JAKARTA POST/ASIA NEWS NETWORK

A version of this article appeared in the print edition of The Straits Times on November 08, 2021, with the headline 'UAE firms to invest $44b in various Indonesian industries'. Subscribe