With the signing of bilateral agreements at the Merdeka Palace in Jakarta on Tuesday, Indonesia and Belarus are entering a new stage in their relations and are set to broaden cooperation in a number of fields.

The agreements came during the state visit by Belarusian President Alexander Lukashenko, who on Tuesday had talks with his Indonesian counterpart President Susilo Bambang Yudhoyono.

His three-day visit to Jakarta has been the first high-level visit since the two countries established diplomatic relations 20 years ago.

Lukashenko brought an 80-member delegation of business people and high level officials.

Also on Tuesday, ministers of the two countries signed seven agreements in a ceremony attended by the two heads of state on issues of economic and technical cooperation, science and technology, agriculture, the defense industry, legal matters, disaster management as well as an agreement on avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income.

“These examples show that we [both countries] want concrete bilateral cooperation, which we will continue to boost in the future,” Yudhoyono told a press conference after the meeting.

Lukashenko agreed, adding there was indeed huge potential in mutual cooperation in those fields.

As Belarus is seeking to deepen cooperation with Southeast Asia, Lukashenko said, Indonesia is a key partner in this vast region and may help Belarus promote itself here.

“This is a big step forward and I believe the two countries can be bridges for each region,” Lukashenko said. “Belarusian interests in Indonesia, Indonesia’s interests in Belarus, Belarus in ASEAN and Indonesia in Europe.”

In addition, Yudhoyono said that there was an opportunity that the two countries could take together as Indonesia’s economy continues to grow with an increasing purchasing power and a strong domestic
market.

“While we know there is a Customs Union involving Belarus, Russia and Kazakhstan, of course it is a good opportunity for regional cooperation between ASEAN and the Customs Union,” he added.

“For us, the amount of the trade volume is still too small; it should be improved,” Yudhoyono said. “So too our reciprocal investments.”

Regarding the defense sector, Yudhoyono underlined that cooperation in the defense industry is also equally important whether it will lead to joint production, joint research and development or other cooperation.

“It was already initiated; we just need to increase cooperation in peacekeeping missions in various parts of the world,” the President said.

On March 20-22, Lukashenko will pay an official visit to the Republic of Singapore to meet with his Singaporean counterpart Tony Tan Keng Yam and Prime Minister Lee Hsien Loong.

Meanwhile, Belarus First Deputy Prime Minister Vladimir Semashko said on Tuesday that there was ample room to improve economic relations, particularly in the areas of industry and agriculture, as the current bilateral relation was still much below its potential.

“Our countries are just opening up to each other. Bilateral trade is not so high, at around US$130 million. I am sure this is the beginning of a big process,” he said in his opening remarks.

The Belarusian-Indonesian Business Forum was held in Jakarta.

During the forum, a number of Indonesian and Belarusian business people sealed memorandums of understanding on trade activities that covered a variety of products, including milk, tires and heavy equipment.

Speaking at the forum, Deputy Trade Minister Bayu Krisnamurthi said that Indonesia called for deeper engagement not only in terms of trade, but also investment. Investment potential was available in the areas of natural rubber processing, post harvest technology in agriculture and poultry distribution management, he added.

Separately, Industry Minister MS Hidayat said after meeting his Belarus counterpart, Dmitry Katerinich, at his office that several Belarusian industrial firms, particularly heavy equipment manufacturers such as BelAZ, had looked into the possibility of setting up production facilities in Indonesia.

“They asked the [Indonesian] government to find local partners and strategic locations for their investment,” said Hidayat.

Bilateral trade between Indonesia and Belarus, a land-locked Eastern European country sandwiched between Russia and the European Union (EU), amounted to $90.64 million, dropped by 44.4 percent from a record high of $163.02 million in 2011, according to Indonesia’s trade statistics. However, trade stood at $220 million in 2011, according to Belarusian statistics.

Indonesia’s main exports cover palm oil, natural rubber, cacao, fisheries products, textiles, footwear, furniture and electronics, while key imports include potassium fertilizers, agricultural machinery, weapons and heavy equipment.

Priyatno Sulisto, the Indonesian Chamber of Commerce and Industry’s (Kadin) Russia and CIS Committee head, said that despite huge potential, cooperation between the two countries was still blocked by a lack of political commitment.

Meanwhile, publicly listed heavy equipment distributor PT Kobexindo Tractors announced on Tuesday that its subsidiary PT Belarus Tractors Indonesia obtained a contract to be the exclusive distributor of Belarus Farm Tractor produced by Minsk Tractor Works.

The contract is expected to strengthen Kobexindo’s sales of heavy equipment to the agribusiness sector, in which Minsk Tractor Works has qualification.

“This cooperation will push growth [of sales] in agriculture, plantations and forestry segments, especially related to the declining price of coal,” Kobexindo president director Humas Saputro said.

The decline of the price of coal last year has affected the business of heavy equipment distributors, particularly those relying heavily on sales to coal miners, who are halting their expansion and purchases of heavy equipment due to a depressed market.

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