Exports to UAE Expected to Increase with CEPA Trade Pact

The Indonesia-UAE Comprehensive Economic Partnership Agreement (CEPA) came into force on September 1 and with the bilateral trade pact now in place, Indonesia’s exports of goods, including palm oil, to the United Arab Emirates are set to skyrocket according to reporting from Jakarta Globe.

The trade deal will gradually slash or eliminate the import duties for Emirates-bound Indonesian exported goods and vice versa. At a recent gala dinner with Emirati diplomats in Jakarta, Chief Economic Affairs Minister Airlangga Hartarto said the CEPA was a historic milestone in Indonesia’s trade ties with the Emirates.

“The CEPA is expected to increase [Indonesia’s] exports to the UAE by around USD 4-billion. It will also increase [our] imports from the UAE by approximately USD 4-billion,” Airlangga said on Friday (24/11/23.)

The CEPA agreement will gradually reduce and eliminate the import duties across up to 94-percent of the tariff posts. Both countries also managed to wrap up the CEPA negotiations within 9-months, which could be considered pretty fast for a trade agreement, say Jakarta Globe.

According to the Foreign Affairs Ministry, palm oil (one of Indonesia’s top commodities) gets covered by the deal. The Observatory of the Economic Complexity (OEC) data shows Indonesia exported USD 241-million of palm oil to the UAE in 2021. This puts palm oil as Indonesia’s second-largest goods export to the Emirates after jewelry (USD 345-million) that year.

“The [Indonesia-UAE CEPA] reflects the keenness of the two countries to strengthen relations for a sustainable future, and continue to increase bilateral trade,” the UAE Ambassador to Indonesia, Abdulla Salem Al Dhaheri, said.

Jakarta Globe report that Indonesia-UAE trade skyrocketed from USD 4-billion in 2021 to USD 5.1-billion the following year. Bilateral trade reached USD 3.6-billion in the first 9-months of 2023. Indonesia posted a trade deficit with the UAE, amounting to USD 463.3-million last year. However, Indonesia saw a USD 213.8-million surplus in Jan-September 2023, Trade Ministry data shows.

The government reported that the UAE was Indonesia’s second-largest trading partner in the Middle East in 2022.

The UAE has also shown growing interest in investing in Indonesia’s renewable energy, say Jakarta Globe, adding that Abu Dhabi-based renewable energy giant Masdar took part in developing the freshly inaugurated 145-megawatt (Mwac) (192 megawatt-peak) Cirata floating solar plant in West Java. Cirata floating solar plant is the largest of its kind in Southeast Asia. Earlier this year, Masdar announced it had made a strategic investment in Indonesia’s Pertamina Geothermal Energy, as the Emirati company seeks to enter the world’s second-largest geothermal market.

“It is true that our bilateral trade is on the rise. What is more important is investment, particularly in the energy sector, be it a direct investment like what we see in Cirata or how [Masdar] expands its portfolio by investing in Pertamina Geothermal Energy,” Pahala told reporters on the sidelines of the gala dinner.

Indonesia recorded USD 61.8-million in direct investment from the Emirates in January to September 2023.  The UAE became Indonesia’s 25th largest foreign investor after Russia (USD 78.2-million) over the said period, report Jakarta Globe.

Source: Jakarta Globe

Stock photo by Saj Shafique on Unsplash

Latest Article
Yuliot Inaugurated as Deputy Minister of Investment
According to reporting from Antara News, President Jokowi inaugurated the former deputy of investment...
QR Code Payments Between Indonesia, S. Korea Linked
According to reporting from Antara News, Indonesia and South Korea have agreed to expand cooperation...
President Jokowi Discusses Trade Cooperation with UAE
President Jokowi held a bilateral meeting with UAE President Mohamed bin Zayed Al Nahyan (MBZ) at Qasr...
Indonesia's Trade Balance Remains in Surplus in June 2024
  Indonesia’s Central Statistics Agency (BPS) announced a trade surplus of US$2.39 billion...
Minister: Downstreaming Leads to a Golden Indonesia
Speaking at a public lecture at the State Institute of Public Administration (IPDN) in Sumedang, West...

Andrzej Barski

Director of Seven Stones Indonesia

Andrzej is Co-owner/ Founder and Director of Seven Stones Indonesia. He was born in the UK to Polish parents and has been living in Indonesia for more than 33-years. He is a skilled writer, trainer and marketer with a deep understanding of Indonesia and its many cultures after spending many years travelling across the archipelago from North Sumatra to Irian Jaya.

His experience covers Marketing, Branding, Advertising, Publishing, Real Estate and Training for 5-Star Hotels and Resorts in Bali and Jakarta, which has given him a passion for the customer experience. He’s a published author and a regular contributor to local and regional publications. His interests include conservation, eco-conscious initiatives, spirituality and motorcycles. Andrzej speaks English and Indonesian.

Terje H. Nilsen

Director of Seven Stones Indonesia

Terje is from Norway and has been living in Indonesia for over 20-years. He first came to Indonesia as a child and after earning his degree in Business Administration from the University of Agder in Norway, he moved to Indonesia in 1993, where he has worked in leading positions in education and the fitness/ wellness industries all over Indonesia including Jakarta, Banjarmasin, Medan and Bali.

He was Co-owner and CEO of the Paradise Property Group for 10-years and led the company to great success. He is now Co-owner/ Founder and Director of Seven Stones Indonesia offering market entry services for foreign investors, legal advice, sourcing of investments and in particular real estate investments. He has a soft spot for eco-friendly and socially sustainable projects and investments, while his personal business strengths are in property law, tourism trends, macroeconomics, Indonesian government and regulations. His personal interests are in sport, adventure, history and spiritual experiences.

Terje’s leadership, drive and knowledge are recognised across many industries and his unrivalled network of high level contacts in government and business spans the globe. He believes you do good and do well but always in that order. Terje speaks English, Indonesian and Norwegian.

Contact Our Consultants

Ridwan Jasin Zachrie

CFO of Seven Stones Indonesia, Jakarta

Ridwan is one of Indonesia’s top executives with a long and illustrious career in the financial world. He holds several professional certifications including being a Certified Business Valuer (CBV) issued by the Australian Academy of Finance and Management; Broker-Dealer Representative (WPPE); and The Directorship Certification for Directors and Commissioners, issued by the Indonesian Institute of Commissioners and Directors.

His experience includes being the Managing Director at one of the top investment banking groups in the region, the Recapital Group, the CFO at State-owned enterprises in fishery industry and the CEO at Tanri Abeng & Son Holding. He’s also been an Independent Commissioner in several Financial Service companies and on the Audit and Risk Committee at Bank BTPN Tbk, Berau Coal Energy Tbk, Aetra Air Jakarta as well as working for Citibank, Bank Mandiri and HSBC. His last position was as CFO at PT Citra Putra Mandiri – OSO Group.

Ridwan has won a number of prestigious awards including the Best CFO Awards 2019 (Institute of Certified Management Accountant Australia-Indonesia); Asia Pacific Young Business Leader awarded by Asia 21 Network New York USA (Tokyo 2008); UK Alumni Business Awards 2008 awarded by the British Council; and The Most Inspiring Human Resources Practitioners’ version of Human Capital Magazine 2010.

He’s a member of the Board of Trustees of the Alumni Association of the Faculty of Law, Trisakti University, Co-Founder of the Paramadina Public Policy Institute and actively writes books, publications and articles in the mass media. He co-authored “Korupsi Mengorupsi Indonesia” in 2009, which helps those with an interest in understanding governance in Indonesia and the critical issue of corruption. Ridwan speaks Indonesian and English.

Per Fredrik Ecker

Managing Director of Seven Stones Indonesia, Jakarta

Per is the Managing Director of the Seven Stones Indonesia (SSI) Jakarta office and has more than 25-years’ experience in Indonesia, China, and Western Europe. He previously worked in senior management positions with Q-Free ASA, Siemens AG, and other companies in the telecom sector. Over the last six years, he has been the Chairman of the Indonesia-Norway Business Council (INBC) and recently become elected to be on the board of EuroCham Indonesia.

His most recent experience is within Intelligent Transport Solutions (ITS), Telecom, and other sectors within the Indonesian market. He is today through his position in SSI and by representing Norway Connect, promoting Nordic and European companies that would like to explore business opportunities in the Indonesian market. He’s also playing an active role to help create the Nordic House concept in Jakarta that will provide an excellent platform for Nordic companies entering Indonesia, where they’ll find a community that can offer support with trusted information and affordable services to enter this market.