Russian – Indonesian Trade Up 50% In 2022

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Trade between Russia and Indonesia has increased by 50% this year despite geopolitical tensions, the Russian Ambassador to Indonesia Lyudmila Vorobyeva has stated.

“Despite the Covid pandemic and general geopolitical tensions, this past year we saw an increase in trade between our countries of more than 50%. We also have joint cultural projects such as student exchanges. About 700 Indonesian students are studying in Russia,” Vorobyeva said, while mentioning that the Indonesian island of Bali retains its position among Russians’ favorite tourist destinations.

As this year’s chair of the G20 group of leading economies, Indonesia hosted the G20 summit from November 15-16 on Bali, with Russia’s Foreign Minister Sergey Lavrov attending.

Indonesia exports to Russia reached US$1.49 Billion during 2021, according to the United Nations COMTRADE database on international trade, while Russian exports to Indonesia reached US$680.98 Million that year, suggesting that 2022 bilateral trade has reached about US$3.26 billion.

The main products that Indonesia exports to Russia are Palm Oil, Coconut Oil, and Large Flat-Rolled Stainless Steel, while Russia exports Semi-Finished Iron, Coal Briquettes, and Potassic Fertilizers. Energy ties are also expected to increase between the two countries, with Indonesian President Joko Widodo is considering joining India and China in buying Russian oil to offset increasing pressure of rising energy costs. “We always monitor all of the options. If there is the country (and) they give a better price, of course,” Widodo said in recently when asked whether Indonesia would buy oil from Russia.

Indonesia is a major economy with a GDP of about US$1.2 trillion, and a per capita GDP (PPP) of about US$12,000. It has a population of 276 million, and a growth rate of about 5.2% – making it an attractive destination for Russian exporters and entrepreneurs.

Indonesia is a target market for Russia, with high-level Indonesian government and business delegations in regular attendance at bilateral forums. The Russian heavy duty truck manufacturer Kamaz has established manufacturing operations in the country, while Russia is also interested in the energy sector, including the building of a planned US$13.5 billion oil refinery in a JV with Rosneft.

Indonesia has requested a Free Trade Agreement with the Eurasian Economic Union, with services sector trade very much part of this dynamic as the two countries energy components start to interact. Indonesia has also begun issuing ten-year, second home visas for foreign nationals wishing ot make a base in the country.

Dezan Shira & Associates maintains offices in Jakarta and can assist Russian investors interested in the Indonesian market. Please contact Maria Kotova at asia@dezshira.com. Our complimentary guide to Doing Business in Indonesia can be downloaded here.

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During these uncertain times, we must stress that our firm does not approve of the Ukraine conflict. We do not entertain business with sanctioned Russian companies or individuals. However, we are well aware of the new emerging supply chains, can advise on strategic analysis and new logistics corridors, and may assist in non-sanctioned areas. We can help, for example, Russian companies develop operations throughout Asia, including banking advisory services, and trade compliance issues, and have done since 1992.

We also provide financial and sanctions compliance services to foreign companies wishing to access Russia. Additionally, we offer market research and advisory services to foreign exporters interested in accessing Russia as the economy looks to replace Western-sourced products. For assistance, please email russia@dezshira.com or visit www.dezshira.com