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Indonesia's plan is to relocate the capital from Jakarta to Borneo some time in the first-half of 2024. Image Credit: Reuters

Dubai: The UAE and Indonesia have signed agreements worth $27 billion as part of a comprehensive economic partnership, said Muhammad Lutfi, Indonesia’s Trade Minister. The deal also included a $10 billion investment in the Indonesia Investment Authority, the country’s sovereign wealth fund, which was established in November 2020.

The minister said that UAE and Indonesia were also exploring a joint venture between Emirates Global Aluminum (EGA) and Indonesia’s state-owned enterprise. Apart from crude oil, “the other commodity that Indonesia is buying from UAE is aluminum - this is we are conducting a study about probably creating joint venture.”

UAE and Indonesia are looking to “triple” the size of their trade, said Lutfi, compared to the roughly $3 billion recorded in 2020. “We are still very small compared to other ASEAN countries in the region.”

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New capital

Indonesia is looking for funds to relocate its capital to the island of Borneo by the first-half of 2024. The planned new capital city reportedly has a development price tag of about $33 billion. “This is a conversation (we are having), that Indonesia would like to have a possibility of cooperation between the two countries to create the new Indonesian capital,” said Lutfi.

Lutfi sees UAE and Indonesia “enhancing” their trade relations in mainly four areas – steel, fresh produce, automotive industry and jewelry. “The first one is selling a lot more steel products, especially stainless steel – Indonesia, since 2019, has been the second largest producer in the world,” said the minister. “We would like to also sell fresh produce.”

Lutfi also spoke about Indonesia’s jewelry exports going to UAE through Singapore because of a free trade agreement between the two countries. The absence of a trade agreement is the reason why “buying jewelry from Indonesia is 5 per cent more expensive than buying from Singapore,” he added.