Sheikh Mohamed visits Jakarta: History of UAE, Indonesia ties

Sheikh Mohamed visits Jakarta: History of UAE, Indonesia ties

Abu Dhabi - A look at how the two countries' shared vision for tolerance and economic growth are taking bilateral relations to new levels.


Published: Wed 24 Jul 2019, 3:17 PM

Last updated: Thu 25 Jul 2019, 7:27 PM

As His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, arrived on Wednesday in Jakarta, Indonesia, on a state visit, here's a look at how the two countries' shared vision for tolerance and economic growth are taking bilateral relations to new levels.

Diplomatic relations

As Muslim-majority countries, the diplomatic relations between Indonesia and the United Arab Emirates are important, spanning over 40 years of shared values and solidarity. The world's largest island country and the world's most populous Muslim-majority country, Indonesia was one of the first nations to recognise the UAE's union and establishment in 1971.

Shortly after, in 1977, Indonesia's second president Muhammad Suharto visited the now-thriving UAE, followed by the establishment of the Indonesian embassy in 1978 in the country's capital, Abu Dhabi. The UAE's late Founding Father, Sheikh Zayed bin Sultan Al Nahyan, visited Jakarta for the first time in May 1990, and in June 1991 the UAE embassy was established, further strengthening diplomatic relations between the two nations.

Indonesia opened its Consulate General in Dubai in February 2003, followed by the opening of the Indonesian Trade Promotion Centre and the Indonesian Investment Promotion Centre in Abu Dhabi.

President Joko Widodo of Indonesia conducted his first official visit to the UAE in 2015, marking the robust fraternal relations between the two countries.

In June 2019, Sheikh Mohamed and President Widodo outlined their shared vision to bolster links on a range of issues during a telephone conversation.

Along with their growing diplomatic relations, the UAE and Indonesia play essential roles as members of global institutions, including the World Trade Organisation, WTO, the Non-Aligned Movement, and the Organisation of Islamic Cooperation.

Trade and investment ties

The UAE and Indonesia enjoy a strong trade and investment relationship, with the two countries among the International Monetary Fund's 2018 top 30 economies as measured by nominal GDP.

According to the World Bank, Indonesia is the world's 10th largest economy in terms of purchasing power parity and is a member of the G20. It is also the largest economy in the Association of Southeast Asian Nations, ASEAN.

Data from the UAE Federal Competitiveness and Statistics Authority shows that in 2017, the UAE imports from Indonesia were $1.8 billion and sold some $250 million in non-oil exports to Southeast Asia's largest economy. Bilateral trade between the two countries reached a total of $3.7 billion in 2017.

In November 2017, Abu Dhabi Future Energy Company, Masdar, and Indonesian power company PT Pembangkitan Jawa-Bali, a subsidiary of the state electricity company Perusahaan Listrik Negara, signed a $2.7 billion project development agreement for the world's largest floating solar photovoltaic power plant. The project sees the two countries collaborate on finding sustainable solutions to Indonesia's rapidly growing energy demand.

According to the Indonesian Trade Promotion Centre in Dubai, ITPC Dubai, in 2018, the UAE was Indonesia's 19th largest export destination country, and 30th largest country as a source of imports.

Last year, Indonesia's National Standardisation Agency, BSN, and National Accreditation Committee, KAN, signed a $5.5 billion agreement with the Emirates Authority for Standardisation and Metrology, ESMA, to develop technical cooperation in the halal food industry, in line with the rules and regulations applicable in the two countries as well as at the WTO.

The first quarter of 2019 has also shown positive progress in bilateral trade development between the two countries. Data from ITPC Dubai reveals that total bilateral trade reached $1.17 billion for the January-April 2019 period, representing a 2.22 per cent increase compared to the same period in 2018 ($1.14 billion).

In May 2019, the Indonesian government became the largest Sukuk issuer on Nasdaq Dubai - by both value ($15 billion) and a number of listings (11) - following the listing of two green Sukuk valued at $2 billion.

This month, Mubadala Petroleum signed an agreement with British energy firm Premier Oil for a 20 percent stake in the Indonesian Andaman I and South Andaman concessions in the North Sumatra basin areas. The acquisition makes Mubadala, which also has a 30 percent stake in the Andaman II concession, as the largest net acreage holder in the area.

Cultural bonds and tolerance: UAE and Indonesian leadership share the same vision to promote social and cultural cooperation based on respect for traditional values and cultural norms. Currently, an estimated 105,000 Indonesian nationals are residing in the UAE.

With an estimated population of 269 million, Indonesia boasts a pluralist society bringing together hundreds of ethnic and religious groups. Like the UAE, the Indonesian constitution provides for freedom of religion. The Indonesian government officially recognises six religions - Islam, Protestantism, Catholicism, Hinduism, Buddhism and Confucianism.

Officials from both countries have also participated in various interfaith dialogue conferences held both in the UAE and Indonesia. In December 2017, Indonesia's Minister of Religious Affairs, Lukman Hakim Saifuddin, attended the fourth annual 'Forum for Promoting Peace in Muslim Societies,' held in Abu Dhabi.

The two countries continue to encourage interfaith dialogue to bring peoples of different races, religions and cultures together while spreading the values of Islam that call for peace, coexistence and tolerance.

Development aid and funding

The United Arab Emirates sees Indonesia as a brotherly country, and of its many development funding projects worldwide, the Bandung Power Distribution project began in 1977.

Valued at Dh50.8 million, the Abu Dhabi Fund for Development project aimed to provide the necessary power for Indonesia, contributing to the welfare of the country across different sectors like industry, transport and agriculture.

As for humanitarian aid, in 2018, Dubai's International Humanitarian City helped facilitate on behalf of UNICEF, the delivery of 92 metric tonnes of aid to Indonesians affected by the Sulawesi earthquake and tsunami. The transportation cost of the cargo aircraft carrying the aid was covered by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.

In March of this year, Dubai Cares, in partnership with Save the Children, announced that it would engage in a $1 million Education in Emergencies, EIE, programme to restore schooling in Indonesia's Sulawesi region.

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