Indications show Indonesia-South Africa trade to increase in 2020

Jakarta (Indonesia Window) – Although the situation in South Africa is very challenging, especially for the trade between the African country and Indonesia, there are a number of positive indications that the bilateral relationship will improve in 2020.

“In 2019 some positive indications have been obtained from the commitment of several companies in the country to send representatives to South Africa, and the new investment plans of South African companies to Indonesia,” Indonesian Ambassador to South Africa Salman Al Farisi stated as quoted from the Indonesian Ministry of Foreign Affairs website here on Friday.

The ambassador added that several agreements such as the Defense Cooperation Agreement and the Memorandum of Understanding on the Fisheries Sector had reached the final process.

“We hope that 2020 will bring encouraging development,” Ambassador Salman said, adding that since 2015 the Indonesia-South Africa trade trend showed a fluctuating graph.

The ambassador said he was not overly concerned about the 2018 trade balance which showed a surplus for the South African side.

According to him, the increased purchase of capital goods from South Africa boosted production activities in Indonesia, mainly those related to the need for intensive infrastructure development in recent years.

Indonesia still has great potentials to increase exports of such non-oil goods  as automotive, palm oil, food and beverage products to Sub-Saharan African countries.

However, until now the tariff problem still hampered trade relations between Indonesia and South Africa.

During a working visit to Cape Town on 18-19 December 2019, the Coordinating Minister for Maritime Affairs and Investment, Luhut B. Pandjaitan, met with the Minister of Trade and Industry of South Africa, Ebrahim Patel.

During the meeting Minister Patel welcomed the planned discussion on the Preferential Trade Agreement (PTA) between Indonesia and South Africa.

Minister Patel wants concrete steps to follow up on the plan with the start of a study by a technical team that is expected to meet in early 2020 in Indonesia.

The minister also pointed out that several investment potentials could be developed by Indonesian entrepreneurs, especially those dealing with the textile and footwear industries.

Reporting by Indonesia Window