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ilateral trade between Indonesia, the Southeast Asia’s largest economy, and South Africa, Africa’s biggest economy, is still below its potential and there will be enormous room for growth in the future due to the size of both economies, a high-level official says.

“The total trade between Indonesia and South Africa has the potential to jump by eight-fold to US$16 billion [in the next few years],” Deputy Trade Minister Bayu Krishnamurti said in a recent statement.

His optimism is based on the large size of the two countries’ economies.

According to the Trade Ministry, the potential growth in bilateral trade is roughly equivalent to about 1 percent of the two countries’ combined GDP of $1.64 trillion, in which Indonesia’s GDP is about $1.1 trillion and South Africa about $548.3 billion.

Bayu is leading a trade mission comprising 14 delegates to South Africa this week, visiting major cities of Cape Town and Durban, where business forums and one-on-one meetings will be held.

Closer links between business communities in both countries would be necessary to achieve higher volumes of bilateral trade in the future, Bayu said.

Bilateral trade between Indonesia, the world’s fourth-most populous nation of 240 million people, and South Africa, home to 48 million people, reached $2.14 billion in 2011, up 78.9 percent from 2010.

Indonesia’s exports were valued at $1.44 billion last year, while imports were around $705.78 million, resulting in a $730.81 million trade surplus.

The growth in exports to South Africa outpaced Indonesia’s total export growth rate of 29.05 percent, which amounted to a total of $203.2 billion in exports last year. The South African market is one of Indonesia’s key nontraditional markets, which is expected to drive future exports, particularly during the current worldwide economic slowdown.

Apart from forging closer cooperation between business communities, Indonesia and South Africa had to take the initiative to encourage South-South cooperation by linking regional partnerships, Bayu said. Both countries could serve as gateways and production bases for firms expecting to expand their business in their respective regional markets, he added.

Indonesia is a member of Association of Southeast Asian Nations (ASEAN) with a combined GDP of $1.8 trillion in 2010, while South Africa is a member of Southern African Development Community (SADC) regional bloc with a GDP of $366.2 billion and the South African Custom Union with a total GDP of $471 billion.

Speaking during the Indonesia-South Africa business forum in Cape Town recently, Syeh Shahid Esau, one of members of Cape Malay — a community of Indonesian and Malay descendants — said that in addition to South Africa, other African countries like Tanzania and Mozambique offered huge potential for Indonesian businesses, especially in the textile, mining, construction, tourism and service sectors.

—JP/Linda Yulisman