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Jakarta Post

Indonesia, Russia to pool economic resources

  • Ina Parlina

    The Jakarta Post

Jakarta   /   Sat, January 9, 2016   /  05:09 pm

Russia and Indonesia have expressed their intention to boost economic ties, with Moscow proposing investments in various infrastructure projects and smelting facilities in Southeast Asia'€™s biggest economy.

The remarks were made during a meeting between President Joko '€œJokowi'€ Widodo and Russian Industry and Trade Minister Denis Manturov on Friday at the State Palace.

'€œDuring the meeting, Indonesia [...] asked Russia to remove its non-tariff barrier for Indonesia'€™s CPO [crude palm oil] and fisheries commodities,'€ Foreign Minister Retno LP Marsudi told reporters after the meeting.

Jakarta reportedly also asked Russia to exempt Indonesians visiting Russia from visa requirements, following Indonesia'€™s implementation of a visa-free facility for Russian tourists, who represent one of the biggest groups of foreign arrivals to the country.

According to Coordinating Economic Minister Darmin Nasution, Manturov said Moscow would discuss Indonesia'€™s request on CPO.

Russia is the 27th-largest foreign spender in Indonesia, with the bulk of investment going to hotels and restaurants, according to data from the Foreign Ministry.

Meanwhile, bilateral trade has surged in recent years, up by 45.1 percent on average to US$3.52 billion last year from 2009, according to statistics from the Trade Ministry.

During the meeting, Manturov asked Indonesia to address a number of challenges hampering his country'€™s investment in Indonesia.

'€œRussia asked for our attention in terms of the ease of doing business related to their ongoing investment and that being planned, including a railway construction project in Central Kalimantan and East Kalimantan,'€ Darmin said, adding that Russia also mentioned problems related to tax.

Manturov expressed Russia'€™s intention to invest in West Kalimantan to build an alumina smelting facility in the region amid ongoing bidding for the project, and another smelting facility for ferronickel.

'€œWe told them to fight for the tender,'€ Darmin said.

Russian proposals for investment arose following Indonesia'€™s move to ban shipments of unprocessed mineral ores in a bid to spur growth in the country'€™s downstream mining industry and add value to its exports. Miners are now required to build local refineries and smelters in order to be able to export, as stipulated in the 2009 Mining Law.

Growing interest from foreign companies indicates that Indonesia remains one of the world'€™s major investment destinations despite the economic slowdown.

During a meeting with Russian President Vladimir Putin on the sidelines of the APEC Summit in Beijing in late 2014, Jokowi sought Russian investment in energy, power plants and railway construction, as well as irrigation, food and manufacturing facilities. Putin has expressed optimism that there could be more room for future economic cooperation with Indonesia.

Russia also proposed cooperation in the civil aviation sector and shipyards during the Friday meeting.

The country is a cooperative partner for Indonesia in the fields of aviation, air transportation and nuclear energy, with plans to maintain and increase its aircraft exports to Indonesia.

The Yaroslav Mudry frigate visited Indonesia in 2014 as part of the Indo Defense Expo.

Retno said, meanwhile, that the meeting did not touch on global politics amid ongoing tensions in the Middle East, but merely highlighted the good ties between Indonesia and Russia.

'€œWe [Indonesia and Russia] want to improve economic cooperation,'€ Retno added.

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