There are not many small countries that have disproportionate impacts on Indonesia.

Singapore, with a population 4 million, obviously tops the list as a major investor and trading partner. Events in Timor Leste, population 900,000, severely damaged Indonesia’s international reputation as a result of turmoil in the wake of the referendum of 1999. Brunei, population 200,000, unintentionally rocked the boat when an innocent donation to Aceh from the sultan of Brunei created a political crisis that led to the downfall of then-president Abdurrahman Wahid. Norway, population 10 million, launched an initiative that prompted an Indonesian moratorium on deforestation.

Hence, a very short list. Countries that have big impacts on Indonesia are usually major or middle powers: China, the United States, Japan, Korea, Australia, Malaysia, Singapore (the exception), Saudi Arabia, India and members of the European Union, among others.

Enter the United Arab Emirates, bringing along a streak of surprises.

Indonesia had been eyeing the UAE for some time. For years, government officials and Indonesian Chamber of Commerce and Industry (Kadin) executives had visited Dubai and Abu Dhabi to court UAE investors but the results were modest at best. Indonesian diplomats found the UAE a tough nut to crack. Lavish diplomatic niceties seldom converted to economic “deliverables”.

For Indonesia, investment-wise, neighboring Qatar was much more on the map than the UAE.

This picture has dramatically changed in the last two years. Since 2019, there has been a significant spike in Jakarta-Abu Dhabi relations, and the speed and scope of their expansion is rather astounding. Indeed, with all the talk about Jakarta’s evolving relations with the US, China, India, the UK, the EU and others, I would say Indonesia-UAE relations are a big diplomatic surprise in Indonesia’s present-day foreign policy.

Out of nowhere, the UAE has now claimed the distinction of being a major investor in Indonesia. Overall, in the last two years, and despite COVID-19, the UAE has pumped around US$30 billion into the Indonesian economy. According to Wisnu Wijaya Soedibyo, deputy for investment cooperation at the Investment Coordinating Board, this makes UAE investment in Indonesia “far more dominant than any other investments from the Middle East”.

The tipping point was apparently when UAE Crown Prince Muhammad Bin Zayed (MBZ) advised President Joko “Jokowi” Widodo, then on a state visit to Abu Dhabi in January 2020, to establish a sovereign wealth fund (SWF). The UAE had set up its own SWF long before, called the Abu Dhabi Investment Authority and has since amassed a fund of around $700 billion. This idea, of course, has been around for many years and had been proposed to Indonesian leaders countless times. But it took the Crown Prince to convince the President to make it happen.

Once the Indonesian Investment Authority (INA) was established, the UAE generously pumped a seed fund of $10 billion to help bankroll Indonesia’s strategic infrastructure projects, namely roads, ports, tourism facilities and agricultural amenities.

The UAE is also now actively involved in Indonesia’s energy sector, with investments of nearly $19 billion, including a plan to build a 145-Megawatt floating solar power plant in West Java and the development of an oil refinery in Balikpapan. The solar power plant will be the biggest in Southeast Asia, larger than the Philippine power plant in Cadiz, Negros Occidental province. This makes the UAE a long-term partner for Indonesia’s still sluggish transition to a low carbon economy.

I asked the chief executive officer of INA, Ridha Wirakusumah, who handles a sizeable chunk of UAE investments in Indonesia, his impressions of Emirati investors. He said, “The UAE is serious about business. They have a good nose for business opportunities. They ask a lot of questions, but they don’t dictate. They are good listeners. They follow through on their plans and they are in for the long term.”

What makes the relations particularly interesting is that the UAE is stepping in – and stepping up – on selective issues that are of pressing importance to Indonesian foreign policy and national interest.

For instance, when Indonesia found thousands of Rohingya refugees landing on its shores, Foreign Minister Retno Marsudi travelled to the UAE to seek emergency funding support to care for them. Her counterpart Foreign Minister Abdullah Bin Zayed immediately came to the rescue.

On COVID-19, the Indonesian pharmaceutical company Kimia Farma reached a deal with the UAE‘s G-42 Health Center Holding to develop its own vaccine. The UAE government recently delivered 500,000 doses of the Sinopharm COVID-19 vaccine, 20 tons of medical personal protective equipment and much-needed oxygen tanks.

The UAE, more than any other country, has become an important foreign contributor to efforts to set up Indonesia’s new capital city in East Kalimantan – a legacy project of enormous importance to President Jokowi. The President has invited Crown Prince Muhammad Bin Zayed to be a member of the advisory board for the development of the envisioned new capital city.

Significantly, the UAE is beginning to capture the Indonesian public’s imagination. The Jakarta-Cikampek II toll road now bears the name Sheikh Mohammad bin Zayed (MBZ) Flyover. This is the first time an Indonesian public infrastructure project has borne the name of a foreign leader. To put it in perspective, even among all Indonesian presidents and vice presidents, only the first duo of Sukarno and Mohammad Hatta (who were also the ones to proclaim Indonesia’s independence) get to have a major landmark, an international airport, named after them.

Additionally, there is much public and media hype about the gift from Crown Prince MBZ to President Jokowi in the form of a smaller replica of the Sheikh Zayed Grand Mosque in Solo. The mosque, which costs Rp 5.7 trillion (all paid for by the UAE), will be able to accommodate 12,000 people and is scheduled to be completed in three years.

Jakarta-Abu Dhabi relations demonstrate what can happen when leaders at the top get along and enjoy good chemistry. At a certain point – we don't know when – Crown Prince MBZ made a political decision to allocate substantial resources for a more robust engagement with Indonesia. We know this much: when he visited Indonesia in July 2019, he liked what he saw. On the part of President Jokowi, UAE investments were politically important after he endured criticism when Indonesia failed to secure Saudi investments during the much-hyped state visit by King Salman in 2017.

President Jokowi, who does not do much international travel, has visited the UAE twice in the last six years. Reportedly, President Jokowi and Crown Prince MBZ are often engaged in consultations over the telephone. Certainly, the close personal relationship between the two leaders supercharges their bilateral cooperation.

Students of international affairs will find it interesting that the rapid escalation of Jakarta-Abu Dhabi relations is occurring despite the fact that the two sides are not yet bound by a formal comprehensive or strategic partnership and in the absence of a comprehensive economic partnership agreement, such as the one Indonesia has with Australia or another that it is working on with the EU.

The UAE-Indonesia experience shows that documented formalities do not always constitute the substance of bilateral relations. Indeed, there are examples of “comprehensive or strategic partnerships” that have gone stagnant.

The UAE is a classic example of a small country (small in terms of size of territory and population) punching above its weight in diplomatic relations with Indonesia, with a growing presence outside Jakarta – in West Java, Solo, East Kalimantan, Aceh and more regions to come. Foreign Minister Retno Marsudi agrees that the “UAE has become a strong partner for our national development”.

One lamentable quirk of Indonesia’s foreign policy is the tendency to produce a plethora of MoUs during bilateral visits but with few of these “intentions on paper” actually being executed. This is not so in the case of recent MoUs signed between Indonesia and the UAE. Most of them are being followed up on and carried out on the ground. It’s a clear instance of diplomacy that walks the talk.

Foreign Minister Retno told me, “I am so happy to see the progress of bilateral relations between Indonesia and UAE. We are able to build trust and strong relations, from trade to investment, from health to people-to-people contact.”

Nevertheless, the relationship is not without challenges. Indonesian exports to the UAE have dropped in recent years, and overall trade volume between the two countries has dipped. Indonesia is still struggling to make the UAE the gateway of Indonesian products to the Middle East and Africa.

Another challenge is how to convert the present bilateral uptick to foreign policy gains. Both Indonesia and the UAE, in their own ways, are consequential powers. Indonesia is a leading ASEAN country, a member of the Group of 20, a strong advocate for the Indo-Pacific, a country that boasts the world’s largest Muslim population and is pursuing an independent foreign policy. The UAE is an economic powerhouse, a close ally of the US, a champion of moderate Islam and inter-faith dialogue and a signatory to the Abraham Accords with Israel. On many issues, the positions of Jakarta and Abu Dhabi are aligned: multilateralism, climate change, vaccine equity, nonproliferation, antiradicalism and extremism, antiprotectionism, a rules-based world order, among others.

There is plenty of space for Jakarta and Abu Dhabi to upgrade foreign policy coordination, defense cooperation, intelligence sharing and diplomatic synergy.

Time is on their side. If Jakarta and Abu Dhabi can maintain their current momentum, it is probable they will do in a few more years what other pairs of partner countries will take a decade or two to realize.

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The writer is former deputy foreign minister and founder and chairman of the Foreign Policy Community of Indonesia (FPCI).