Indonesia to Enhance Economic Partnership with Iran
Jakarta, 26 Safar 1438/26 November 2016 (MINA) – Indonesia will enhance its trade and investment in the Islamic Republic of Iran. Currently, both trade and investment were far below the two countries economic potential.
“Trade and investment have gone down over the years (due to the economic sanctions against Iran), but we hope that these can recover within two or three years,” Antara quoted Coordinating Minister for Economy Darmin Nasution as saying here on Friday.
Therefore, he said, the two countries have agreed on new ways of cooperation in trade and investment through the Economic Joint Commission Session (SKB) on economic cooperation and trade.
Darmin led the Indonesian delegation at a session of the commission, the first since the implementation of the Joint Comprehensive Plan of Action (JCPOA) under which economic sanctions against Iran were revoked.
The session was also attended by Iran,s Communication and Information Technology Minister, Mahmoud Vaezi, who led the Iranian delegation, Iranian ambassador Valioah Mohammadi, and Indonesian ambassador to Iran Octaviano Alimudin.
Darmin noted that under this new commitment, Indonesia could seek a new export market in Iran in a bid to recover its sluggish trade due to the global economic slowdown.
“This would help our trade with Iran to recover, particularly in view of the current unfavorable situation in some countries. For us, it is important to increase our export to Iran,” he stressed.
Darmin named palm oil, textile, garments and other manufactured products as among those which could be exported to Iran.
On the potential to increase investment, Darmin reminded that Iran was keen to invest in the oil and gas sector, although it has not made any commitment regarding an investment plan.
“They have yet to specify such investment but they wanted to invest in refinery development. They also have a chance to invest in the 35,000 MW power plant projects,” he added.
Investment in oil refinery development would benefit Indonesia as it could help in securing national energy supply in the long term.
“This will be good for Indonesia as it could be backed-up by a long term contract on oil supply. It would be too risky if we only have an oil refinery, without a long term contract to ensure supply,” he explained.
Indonesias bilateral trade with Iran was recorded at US$273.1 million in 2015, down 38.51 percent compared to 2011 when it had reached US$1.8 billion.
As of August 2016, the bilateral trade was recorded at US$150 million, below the US$195 million worth of trade during the same period of 2015.
In the investment sector, data from the Coordinating Board of Investment (BKPM) showed that Iranian investment in Indonesia during 2011-2014 had amounted to US$6.3 million in 16 projects.
There is a potential of new cooperation in energy, such as through cooperation between Indonesia’s Pertamina and National Iranian Oil Company (NIOC) to supply 88,000 tons of LPG in 2016. The volume would be increased in 2017.
In the future, this cooperation can be expanded to other areas such as crude oil, refinery development, and petrochemical products, Darmin observed.
Courtesy call on Jokowi
During the session, the two parties signed the Agreed Minutes of the 12th Session of Joint Commission on Economic and Trade Cooperation that covered various strategic cooperation programs between the two countries.
“We hope that bilateral economic cooperation between Indonesia and Iran could be improved further to serve the goal of mutual welfare,” Darmin underlined.
After the meeting, Iranian delegation paid a courtesy call on President Joko Widodo.
The president plans to visit Iran on a state visit in December. (T/R07/R01)
Mi’raj Islamic News Agency (MINA)
