UAE visit to Indonesia strengthens economic ties

Following the successful visit to China, Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, is now visiting Jakarta, Indonesia.

He met with Indonesian President Joko Widodo at the presidential palace in Bogor, south of the capital Jakarta; a meeting that saw the signing of multiple Memorandums of Understanding (MoUs) and agreements worth $9.7 billion.

Amongst the agreements were:

1. Abu Dhabi National Oil Company (ADNOC) and PT Pertamina, Indonesia’s state-owned energy company have signed an agreement with a potential value of $2.5 billion, to improve collaboration between the two countries in the oil and gas sector.

2. A joint venture agreement has been signed by Mudabala, Abu Dhabi based investment company, OMV, an Austrian energy company, and another energy company from Indonesia, Chandra Asri Petrochemical.

   This JV, with a potential value of $6 billion will enable the companies to explore petrochemical opportunities together.

3. According to state news agency WAM, two preliminary agreements were also signed in the shipping and logistics sector, between Maspion Group from Indonesia, and DP World, a global port operator established in 2005 through a merger between Dubai Ports Authority and Dubai Ports International.

   The deal, with a potential value of $1.2 billion, as disclosed, will see the development of a container terminal as well as industrial logistics park in Indonesia—specifically, in the city of Gresik within the province of East Java. DP World stated that the construction of these facilities will be starting in the later part of 2019, expected to complete by H1 2022.

While the total value of these deals was reported to be $9.7 billion, Husin Bagis, Ambassador of Indonesia to the UAE, told WAM, the Emirates News Agency, that Sheikh Mohamed bin Zayed Al Nahyan’s visit is expected to see the signing of agreements and partnerships with a potential value of $10-15 billion.

For this visit is a “dream come true” that will strengthen the economic ties between the two nations in the coming years. The diplomatic relations between the two countries that began in 1976, led by former Indonesian President Suharto visited the UAE in 1977.

Both countries have come a long way since, with Indonesia becoming the largest economy in the Association of Southeast Asian Nations, ASEAN. In addition, the diplomatic and trade ties have also improved with the expansion of both economies.

Just a week prior to Sheikh Mohamed bin Zayed Al Nahyan’s visit to Indonesia, on July 17, 2019, Mudabala Petroleum increased its stake in two Indonesian offshore concessions to 80%, becoming the “largest operator of both concessions.”