Sanctions may disrupt RI-Iran trade

Indonesia is expecting its bilateral trade with Iran to be affected by fresh US financial sanctions on Iran, as some of its main trading partners have begun to report difficulties in making and receiving payments due to the sanctions.

The US slapped the new sanctions on Tehran from the start of this year, targeting financial institutions that deal with Iran’s central bank, hoping to stem the country’s oil revenues.

It tightened the sanctions another notch this month, again targeting Iran’s central bank and giving US banks new powers to freeze assets linked to Tehran. The European Union (EU) has agreed to ban Iranian oil imports, a measure expected to take full effect within six months.

“We have no figures yet,” Indonesian Foreign Ministry spokesman, Michael Tene, told The Jakarta Post over the phone on Thursday. “But, we are anticipating the impact.”

Indonesia is not among Iran’s main trading partners, which include China, India, Japan, South Korea and some EU member states.

But the Indonesian Trade Ministry’s director general for international trade partnerships, Gusmardi Bustami, said Indonesia had been exporting considerable amounts of paper, palm oil and tea to Iran, while importing some raw materials for fertilizers.

Gusmardi said making payments for the commodities had commonly been difficult, being conducted via third countries, such as the United Arab Emirates, as Indonesia had no banking ties with Iran.

Michael said the fresh sanctions were expected to further hamper the bilateral trade, as Iran’s inability to sell its oil would lessen its ability to pay for imported goods. “[The sanctions] will affect Iran’s foreign exchange capacity, and this will affect its imports from other countries, including Indonesia.”

The US and the EU have not stopped at their own sanctions on Iran, but have also extended calls to other countries to exert similar pressure on the Islamic republic.

Japan has given mixed signals over the sanctions, while China, the world’s largest energy consumer, and South Korea remain unwilling to back an oil embargo against Iran.

Indonesia’s Defense University lecturer, Bantarto Bandoro, said he believed Iran was a resourceful country that would not panic over the sanctions but would survive them.

He added, however, that Iran might seek support from its sympathizers, including Indonesia. “Indonesia would tend not to support the sanctions but would continue to defend Iran morally and politically.”