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From maids to markets: Indonesia still faces challenges engaging with the Middle East
Despite nurturing close historical ties, Indonesia still struggles to find a way to boost trade and investment with countries from the Middle East.
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President Joko "Jokowi" Widodo (right) accompanies Saudi King Salman bin Abdulaziz Al-Saud (center) as he writes in the President's guest book during an official visit to Bogor Palace, West Java, on March 1, 2017. Jokowi said at the time that the visit marked the beginning of improved cooperation between Indonesia and Saudi Arabia. (Antara/Puspa Perwitasari)
F
or Indonesia, the world’s largest Muslim-majority country, strong political ties with the Middle East do not always translate into solid economic partnerships.
As President Joko “Jokowi” Widodo’s special envoy to the Middle East, former foreign minister Alwi Shihab has been leading efforts to map out Indonesia’s economic opportunities in this region, including hosting discussions and business-matching events.
He recently said that the President had expressed a desire to secure more fresh funds from the Middle East, but investors somehow always ended up comparing Indonesia’s business climate to that of regional rivals such as Malaysia and Vietnam.
“There are things that they see are easier [elsewhere],” Alwi said on the margins of a conference on boosting investments to members of the Organization for Islamic Cooperation (OIC) in Tangerang, Banten, last week.
“So far Indonesia has always tried to see what privileges our neighboring countries have given, and strive to be more competitive so people can come here.”
Indonesia slipped one spot to place 73rd on the World Bank’s Ease of Doing Business Index published in 2018, complicating the national target to break into the top 40 this year. In comparison, Malaysia ranks 15th and Vietnam 69th on the annual global rankings.
Licensing and taxation problems have been some of the biggest complaints, making it hard for existing and potential investors to justify the costs and time they have to bear in Indonesia.
