Husin Bagis, Indonesian Ambassador to the UAE, tells Chiranti Sengupta how the leaders of both countries are enhancing cooperation across multiple sectors
The pandemic has disrupted business and consumer activities across the world. What key measures has Indonesia taken to accelerate economic recovery in a post-Covid world?
The Indonesian government has allocated Rp695.2 trillion (Dh173.8 billion) to tackle the impact of Covid-19 pandemic in the country. This total figure mainly consists of health sector support of Rp87.55 trillion (Dh21.9 billion) and the National Economic Recovery programme of Rp607.65 trillion (Dh151.9 billion).
The Indonesian National Economic Recovery programme includes social safety net measures (Rp203.9 trillion), government spending through sectoral ministries and local government funding (Rp106.11 trillion), micro, small and medium enterprises (MSMEs) support (Rp123.46 trillion), state-owned enterprises (SOEs) financing (Rp53.57 trillion), and business/tax incentives (Rp120.61 trillion). These efforts aim to stimulate the supply and demand sides for economic recovery during the pandemic. Besides, this extraordinary programme has shown an integrated approach of fiscal measures, monetary policy, as well as support for the financial sector.
To finance the widening state budget deficit due to the economic downturn, the government of Indonesia has worked closely with the Central Bank of Indonesia through a burden-sharing mechanism. This mechanism has to follow a strict and prudent fiscal and monetary policy and adhere to good governance standards.
For the year 2021 and medium-term vision, the government has committed to some strategic priorities of preparing a new healthy society, accelerating recovery of social and health sectors, ensuring speedy recovery of the economy, and innovating policies across sectors. These strategic priorities have been translated into the reformation of the health sector, social safety net, education, taxation, state budget allocation, and industry focus.
In addition, the government of Indonesia has also started a strategic investment and financing mechanism through the establishment of the Indonesia Sovereign Wealth Fund. This initiative has been discussed with various international counterparts in order to learn the best practices. This fund is dedicated to finance national development, including major infrastructure projects in Indonesia.
Earlier this year, Indonesia and the UAE signed many agreements and MoUs. Could you give us some information on these agreements?
During Indonesian President Joko Widodo’s visit to Abu Dhabi in January, Indonesia and the UAE signed 11 business agreements.
These business agreements/deals were Power Purchase Agreement (PPA) on Cirata Floating Solar PV 145 MWAC between Masdar and PT. PLN; two MoUs between ADNOC and Pertamina for both Refinery Development Master Plan (RDMP) projects and Direct LPG Sales Contract from ADNOC to Pertamina; Refinery Investment Principle Agreement (RIPA) between Mubadala and Pertamina for the placement of up to 49 per cent of preferred shares in RDMP RU V Balikpapan Phase 1 project; MoU on R&D collaboration for agricultural crop commercialisation between Elite Agro (EAG) and Indonesian Agency of Agricultural Research and Development (IAARD)/Ministry of Agriculture; and project execution agreement signing between DP World and Maspion Group regarding the development of Gresik Container Terminal.
The other five business deals were MoUs for the potential supply of naphtha feedstock between ADNOC and Chandra Asri Petrochemical; MoU and NDA on the development of a custom bonded third party logistics park, dry port and inland container in Subang between Trustworthy.ae and RNI; letter of intent (LoI) on the optimisation of west Java workforce absorption between LuLu Group International and West Java Provincial Government; the K7-12 E-learning Project MoU between Saal.ai and PT. TELKOM (Persero); and amendment to MoUs between Emirates Global Aluminum (EGA) and PT. Indonesia Asahan Aluminum.
Apart from the business deals, the two governments signed five MoUs to expand cooperation in areas such as health, education, agriculture and food diversification, Islamic affairs and endowments, as well as counter-terrorism.
How would you sum up the current relations between Indonesia and the UAE? What are your focus areas now when it comes to strengthening ties with the UAE?
The current relations between the UAE and Indonesia have elevated to a level that is closer than ever.
His Highness Shaikh Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, visited Indonesia in July last year, while our President, Joko Widodo, visited Abu Dhabi earlier this year.
There were 16 agreements and MoUs being signed during the visit of Shaikh Mohammad bin Zayed to Indonesia, covering various aspects — from politics and economic affairs to education, health, socio-cultural, and consular affairs. We are striving to make these agreements and MoUs materialise for the benefit of people of both countries. On many occasions, President Widodo has stated that foreign policy should be committed to the welfare of people in Indonesia.
Likewise, during the visit of President Widodo to Abu Dhabi earlier this year, both counties have also signed 11 business-to-business MoUs, mostly on the investment and economic aspect, ranging from oil and energy to agriculture. The progress on all these business deals is very encouraging.
In light of the close partnership between Indonesia and the UAE, we also agreed to establish a bilateral, temporary travel corridor arrangement to facilitate the ease of travel for business, economic, diplomatic, and official purposes. The Safe Travel Corridor Arrangement (STCA) came into effect last month.
We have some big projects in the pipeline for food and energy security. It is my dream to fulfill them with the UAE. Indonesia has numerous talented engineers, and I am eager to bring them here to work in Emirati industries and airlines.
Indonesia has always been a preferred travel destination for UAE residents. How does Indonesia plan to bring tourists back to the nation after Covid-19?
Considering that tourism is an essential component of Indonesian economy as well as a significant source of its foreign exchange revenues, the government is working hard to attract and gain confidence of foreign tourists. It has launched a video about the application of the cleanliness, health, and safety (CHS) protocol in any tourism destination in Indonesia.
Besides, to recover the tourism sector, badly-hit by the Covid-19 pandemic, the government will also hold a mega fam trip in collaboration with key opinion leaders, arrange airplane and hotel tour packages, and organise events to attract visitors. All preparation and recovery will be carried out in line with the preventive measures and regulations to curb the spread of Covid-19. It is worth mentioning that Bali, the capital of tourism in Indonesia, has been one of the least-affected provinces in the country from Covid-19. The Island of Gods, Bali, has taken the fastest measures to fight and curb the Covid-19 spread and establish hygiene and safety protocols to welcome tourists again. It opened for domestic tourists on July 31, and hopefully will soon reopen for foreign tourists as well.
How many tourists from the UAE visited Indonesia in 2019?
Based on the data we have, around 9,065 tourists visited Indonesia from the UAE in 2019. We are very confident the number will grow in the years ahead. We plan to engage a big tour operator in the UAE to materialise this vision.
What kind of activities is the embassy planning to organise this year to improve bilateral relations?
Despite the severe impact of Covid-19 on the Indonesian economy, the financial sector has shown resilience and potential for growth, offering opportunities for further cooperation between the UAE and Indonesia.
Indonesia, with its large population and low financial literacy and inclusion rate, has offered an excellent opportunity to serve people with financial services. Indonesia, through its embassy, will attract and facilitate more UAE business partners to invest and strategically maintain operations with their Indonesian counterparts in the financial sector, whether on a regular or sharia basis.
Besides, we are working to realise all agreements signed in various fields, not only in economic and investment sectors, but also education, defense, culture, tourism, health, as well as Islamic affairs.
How does the embassy serve the Indonesian community in the UAE?
We aim at ensuring the best services for all Indonesians residing in the UAE. In terms of consular assistance, the embassy, as well as the consulate general have a 24/7 hotline number, and we also have our staff on standby duty on weekends and public holidays.
How many Indonesians are currently living in the UAE and how many have gone back home since the outbreak of coronavirus? How did the embassy facilitate their safe repatriation?
According to the Federal Authority for Identity and Citizenship (ICA), there are around 77,000 Indonesians in the UAE, 80 per cent of them are domestic helpers. The other 20 per cent are employed as engineers in oil and gas companies as well as paper mills. Indonesians are also working in various sectors such as trading; services and hospitality; maritime, religious and health. We estimated that more than 2.000 Indonesians have left the UAE since the outbreak of Covid-19.
We facilitated the repatriation of Indonesian seamen on two chartered flights in April. These flights were arranged for stranded seamen from six cruise ships berthed in Abu Dhabi and Dubai. Later, we repatriated more Indonesian seamen using commercial flights. The embassy has estimated that more than 1.500 Indonesians have left the UAE with a voluntary repatriation mechanism.
Finally, how does the embassy plan to celebrate the Independence Day this year?
We have a flag-hoisting ceremony today at the embassy’s premises in commemoration of the proclamation of independence. The ceremony will be attended by limited embassy officials and staff, without the presence of community members in the UAE. This activity will be carried out in compliance with physical distancing and preventive measures.
The embassy of Indonesia will also celebrate the 75th Indonesia’s Independence Day by organising the first-ever Panggung Gembira Virtual (PGV), a showcase of Indonesian music, cultural performances, inspirational talkshow, and giveaway, which will be organised virtually and broadcast live on the embassy’s social media platforms on August 21.