Indonesia encourages start of comprehensive economic negotiations with Saudi Arabia

Indonesia-Saudi Arabia economic partnership
Indonesian Trade Minister Zulkifli Hasan (right) and his Saudi counterpart, Majid bin Abdullah Al-Qasabi, held a bilateral meeting in Nusa Dua, Bali, on Wednesday (September 21, 2022). (The Indonesian Ministry of Trade)

The comprehensive economic partnership between Indonesia and Saudi Arabia is expected to be realized soon to strengthen trade and economic relations between the two countries.

 

Jakarta (Indonesia Window) – Indonesian Minister of Trade Zulkifli Hasan has encouraged the start of negotiations about an agreement on a comprehensive economic partnership between Indonesia and Saudi Arabia.

Trade Minister Zulkifli Hasan explained that it was time for the two countries to further strengthen economic cooperation, and Indonesia needed to continue to increase exports to Saudi Arabia, the Indonesian Ministry of Trade said in a statement received here on Thursday.

This was raised in a meeting between Trade Minister Zulkifli Hasan and Saudi Arabian Trade Minister Majid bin Abdullah Al-Qasabi.

The bilateral meeting took place in Nusa Dua area, Badung district, Bali province, on Wednesday (Sept. 21), the night before the start of the G20 Trade, Investment and Industry Ministerial Meeting (TIIMM).

Saudi Arabia is an important trading partner for Indonesia in the Middle East, but the trade potential of the two countries has not been optimally utilized, the minister said.

“For this reason, Indonesia proposes efforts to increase trade and investment relations through the establishment of a bilateral comprehensive economic partnership between Indonesia and Saudi Arabia,” Zulkifli added.

Saudi Arabia is a member of the Gulf Cooperation Council (GCC) along with five other Gulf countries, namely the United Arab Emirates, Bahrain, Oman, Qatar and Kuwait.

Since 2018, Indonesia has proposed the establishment of a Comprehensive Economic Partnership Agreement (CEPA) with Saudi Arabia through the GCC.

Given that Indonesia has signed a CEPA with the United Arab Emirates which is a member of the GCC, the former proposes to start bilateral negotiations between Indonesia and Saudi Arabia, Zulkifli said.

“I believe that with cooperation within the CEPA framework and business interactions between the two countries, trade and economic relations between the two countries will improve,” he said.

He explained that Saudi Arabia’s trade minister shared the view that the two sides should find ways to strengthen bilateral cooperation.

Even in the meeting, Trade Minister Majid bin Abdullah Al-Qasabi emphasized the importance of the two countries to increase communication and meet more intensively, two to four times a year.

The technical level meeting between the two countries is expected to identify priority programs and potential cooperation between the two countries, as well as further discussion on the proposed CEPA negotiations including the CEPA coverage elements that will be used as a reference in the negotiation process and further discussion.

In the January–July 2022 period, the total trade value between Indonesia–Saudi Arabia reached 4.6 billion U.S. dollars, an increase of 58.85 percent compared to the same period the previous year.

Meanwhile, the total trade between the two countries in 2021 will reach 5.6 billion dollars, an increase of 40.44 percent compared to 2020.

Indonesia’s exports to Saudi Arabia are worth 1.6 billion dollars, up 18.28 percent, and Indonesia’s imports from Saudi Arabia are recorded at 4 billion dollars, up 51.79 percent.

Meanwhile, the total trade between the two countries in 2021 will reach 5.6 billion dollars, an increase of 40.44 percent compared to 2020.

Indonesia’s exports to Saudi Arabia are worth 1.6 billion dollars, up 18.28 percent, and Indonesia’s imports from Saudi Arabia are recorded at 4 billion dollars, up 51.79 percent.

Indonesia recorded a deficit of 2.4 billion dollars against Saudi Arabia due to the need for oil and gas imports.

Indonesia’s main export commodities from Saudi Arabia are motor vehicles, palm oil, sauces, preserved fish, and charcoal.

Meanwhile, Indonesia’s main import commodities from Saudi Arabia are various chemical products such as acyclic alcohol, propylene polymer, ethylene polymer, acyclic hydrocarbons, and polyacetals.

Reporting by Indonesia Window

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