Indonesia-Kazakhstan: Economic and Trade

Cooperation

Dr.Rizal-Affandi LukmanDeputy Minister for International Economic Cooperation Coordinating Ministry for Economic Affairs, Indonesia

6th Astana Economic Forum 22 – 24 May 2013

Presentation Guidelines

Overview of Indonesian Economy

Summary of Indonesian Development: “Remarkable Indonesia”

Indonesia – Kazakhstan Bilateral Cooperation

Comparative Basic Data

Countries Land Size (sq km)

Population

(million)

Exports (as

of 2012 est.)-in US$

Imports

(as of 2012

est.)-in US$

Size of Economy

as of 2012

(millions of US$)

GDP/Capita as of 2012 (US$)

Public Debt as of 2012 (% of GDP)

GDP Growth as of

2012(%)

Inflation as of

2012

(%)

Labor Force

Indonesia 1,904,569 245 $188.7 billion

$179 billion

879 mil1.2 bil (PPP)

3,4955,000 (PPP)

24.8 6 4.5 118 millio

n

Brazil 8,514,877 201 $242 billion

$238.8 billion

2,395,968

12,594 43.3 1.3 5.5 107 million

Kazakhstan

2,724,900 17,8 $88.61 billion

$42.82 billion

196,419 11,357 12 5 5.2 8.54 million

South Africa

1,219,090 49 $101.2 billion

$106.8 billion

384,315 8,070 43.3 2.6 5.2 17.89 million

Source: various

Indonesia - Stable and Growing EconomyGDP growth rates (%)

Public debt and Budget Deficit (% of GDP)

Real GDP Per Capita (1996 = 100)

Source: CEIC

Sou

rce:

CEIC

Source: IMF

Inflation (2012)

Sou

rce:

inflatio

n.e

u

Investment and consumption drive GDP growth

Growing Middle Class

Private Consumption remains robust

Source: BKPM

Investment performance: Strong Result in 2012

Government Target 2009-2014

Mobilization of Financial Resources:•Growth = 7.6%•Incremental Capital-Output Ratio = 5.2•Investment/GDP = 40%•Saving = Investment•Current Saving/GDP = 33%•Need Foreign Investment

Source: BKPM

Summary of Indonesian Development: “Remarkable Indonesia”

Stable and growing economy

Growth is more widespread

Role of natural resources

Rising importance of domestic economy

Demographic “dividend”

Indonesia – Kazakhstan Economic and Trade Cooperation

Indonesia recognized the sovereignty of Kazakhstan in December 1991, established formal diplomatic relations on 2 June 1993 and opened its Embassy in Astana on December 2010.

Diplomatic and economic relation has a long established history with reciprocal presidential visits in 1995.

In the same year, the Agreement on Economic and Technical Cooperation, Banking Agreement between Bank Indonesia and Central Bank of Kazakhstan and the Memorandum of Understanding on Health and Medicines Cooperation were signed.  

President Nursultan Nazarbayev visited Indonesia in April 2012 and agreed with Indonesia President Susilo Bambang Yudhoyono to establish Indonesia-Kazakhstan Joint Economic Commission and set a bilateral trade target of USD100 million in five years.

Indonesia – Kazakhstan Economic and Trade Cooperation

(cont’d)

In May 2012, Coordinating Minister for Economic Affairs visited Astana to establish the Joint Economic Commission and set up five (5) Working Groups to intensify cooperation –On investment and trade, Industry and Agriculture, Oil, Gas and Energy, Health and Pharmaceutical Industry and Infrastructure and Logistics. The first Joint Commission Meeting took place in Indonesia in November 2012.

Trade Between Indonesia and Kazakhstan

Trade Between Indonesia and Kazakhstan

Market share of Indonesian products only made 0,1% of the total trade of Kazakhstan. Meanwhile, Indonesia’s export share to Kazakhstan reached the value of 0,13%. Indonesia’s export commodities to Kazakhstan include, among others, palm oil and its fractions, tea, parts of cassette player, tape recorder or image reproduction device, primary cell and primary battery, wood, tobacco, cocoa oil, household appliances and its spare parts, processed food, and automatic data processor.

Trade volume between the two countries is relatively small. There are opportunities to explore economic potentials of both countries following through the existing bilateral agreements.

Both countries need to work more intensively in opening up communication, transportation and information constraints and improve interaction among the economic actors of both countries.

The setting up of Indonesia-Kazakhstan Business Council is a step in the right direction.

Indonesia – Kazakhstan Bilateral Cooperation

During the 5th Astana Economic Forum and RI-Kazakhstan Business Forum, 7 MoUs were signed::

Oil and gas cooperation between PT. Pertamina and KazMunayGas;

Cooperation in the pharmaceutical industry and medicine between the Indo Farma with Interek Group;

Instant noodle plant between PT. Indo Food Success Makmur with Interek Grop;

Direct purchase of grain and the formation of joint venture between PT. Nidas and Bereket Group;

Traditional therapy center development between PT Bali Spa. Locus with Interek Group;

Cooperation in the post sphere between the PT. Heading to KazPost; and

Cooperation in the logistic field between Indonesia-South Asia and Central Asia Logistics Association with National Logistic of Kazakhstan.

Thank You