Русский
Russian President Vladimir Putin has said that the Free Trade Agreement between Indonesia and the Eurasian Economic Union (EAEU) is practically ready for signing, stating that “We are hoping that the agreement on a free trade area between the EAEU and Indonesia, which has been prepared for signing, will play a positive and noticeable role in the development of our trade and economic relations.” He made the remark during a meeting with Indonesian President-elect Prabowo Subianto. Russia has a keen interest in the Indonesian market, Putin added.
The EAEU includes Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia. Indonesia is one of Asia’s largest countries with a population of 275 million (roughly the same as Russia) and GDP (PPP) of US$4.721 trillion. It is a middle class, predominantly liberal Muslim country.
Russia and Indonesia have historically been close partners. Indonesia does not support Russia’s isolation from the West, and the two are trying to strengthen the strategic partnership between them. For Russia, Indonesia is a window into the ASEAN and the Indo-Pacific region. It is also a rapidly growing economy, which is anticipated to overtake Russia in coming years, and has an ambition to become the sixth-largest economy in the world (in PPP values). This pushes Russia, as it focuses on Asia, to seek closer ties with the Southeast Asian giant.
Yet the two countries have nevertheless faced significant geographic and geopolitical constraints. Indonesia, being a self-interested actor in the international arena, pushes for a more independent foreign policy which also includes not choosing sides between the West and Russia.
This neatly falls into the multi-vector foreign policy agenda pursued by Indonesia and other Asian countries. Rather the country also adheres to neutrality and pursues policies that allow it to increase its manoeuvrability on the global stage.
Bilateral Trade
The volume of bilateral trade between Russia and Indonesia is growing: Indonesia reported that in 2023 it amounted to just over US$4.5 billion. The trend has been visible over recent years when, for example in 2021, Russia’s trade turnover with Indonesia amounted to US$3.3 billion, an increase of 40.65% compared to 2020.
Russia exports mainly wheat, meat, fertilizers and petroleum products to Indonesia. Russia also actively imports fats, palm oil, tea, coffee, cocoa and spices, machinery, and various equipment from the South-East Asian Republic. Indonesian exports to Russia also include manufactured goods such as electrical appliances, footwear, textiles, raw materials and minerals, wood, and various products from it.
Moreover, Indonesia has expressed interest in the procurement of Russian coal. Indonesia has close ties with specific regions of Russia. For instance, compared to 2021, in 2022 exports of natural rubber and fertilizers to Tatarstan increased by almost 30%. Tatarstan is significant in that it is both a majority Muslim region and has pursued an active trade policy when it comes to reaching out to Islamic nations.
The coming 2024 BRICS summit will be held in Kazan, the capital city of Tatarstan, with Indonesia expected to attend as a guest with an eye on also joining the bloc.
Further Reading
