Fostering a new era of modern Indonesia-Africa relations

Background
A newly defined African presence could give Indonesia greater political and economic clout on the
global stage.

Since the fall of the Suharto dictatorship in 1998, Indonesia has had an impressive rise in world
politics. As the largest economy in Southeast Asia and the fourth largest population in the world, with
more than 248 million people in 2012, the country had often made its voice heard, particularly on
issues connected with the former Third World, today known as the Global South.

Of course, Indonesia has been a leading actor in the developing world since the 1955 conference of
twenty-nine nations of Asia and Africa, the First Asia-Africa Conference held in the city of Bandung.
But since 2001, Indonesia has consistently achieved GDP growth in excess of 5 percent, which “is
forecast to dip slightly in 2014 before recovering next year,” according to the Asian Development
Bank. In a regional context, as Abdul-Latif Halimi states, Indonesia’s rise will be “very significant, even
if gradual.” Certainly, Indonesia’s growing presence will have implications for many countries nearby,
including China, whose regional hegemony will surely be challenged. The Natuna Islands in the South
China Sea are one possible flashpoint. Surrounded by a gas-rich seabed, the islands lie between
China’s nine-dash line and Indonesia’s Exclusive Economic Zone, and could be a source of future
tensions..

In an interregional context, the Indonesian government is seeking to bolster relations with Africa. It is
worth looking at business interest in entering (or reentering, in some cases) African markets. A
number of Indonesian companies have took part in the annual International Trade Fairs in Africa.
Another group of companies participated in the Trade Mission to Senegal and The Gambia. Yet
another group visited Senegal, Sierra Leone and Guinea (Conakry) seeking to open up markets in
these countries.

Indonesia’s turn towards Africa is part of Jakarta’s assertive and pragmatic foreign policy, which since
the early 2000s has been focusing on building a political and security community within the
Association of Southeast Asian Nations (ASEAN) and also tightening links with the U.S., India,
Australia, Russia, as well as other emerging countries. Indonesia is also a member of the G20.

In fact, Indonesia’s rising global profile is also evident in the new numeronyms and acronyms created
in the last couple of years: PricewaterhouseCoopers, for instance, coined “E7,” representing the
world’s seven major emerging countries: China, India, Brazil, Mexico, Russia, Indonesia and Turkey.
Goldman Sachs speaks of the “N-11” (Next Eleven), referring to Bangladesh, Egypt, Indonesia, Iran,
Mexico, Nigeria, Pakistan, the Philippines, Turkey, South Korea and Vietnam, as the emerging
countries with the potential to join the club of the largest economies over the course of the 21st
century. This N-11 can be compared to CIVETS, coined by the Economist Intelligence Unit, which lists
Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa on the same grounds. All include
Indonesia, a nod to its size and potential.

As Karen Brooks points out in her excellent 2011 article in Foreign Affairs: “the real driver of the
country’s recent economic growth has been the Indonesian consumer, with consumption accounting
for roughly 60 percent of GDP.” It is not surprising, then, that the private sector concentrates on the
country’s internal market and on expanding in Asia. Africa still seems rather distant these Indonesia’s
entrepreneurs.

The government, however, wants market diversification, and is targeting several African countries with
“non-oil-and-gas products,” according to the Jakarta Post. An Indonesia’s ambassador in Africa has
said, Indonesian businesses are competitive in Africa, able to compete with other Asian actors. One of
the strengths of Indonesian players is the quality of their products, which include palm oil and
associated products, textiles, footwear, cars and automotive components, and electronics. According
to Statistics Indonesia (BPS), major African trading partners for Indonesia in 2011 were South Africa,
Nigeria, Egypt, Algeria and Tanzania, while trade with Madagascar, Kenya, Benin, Angola and Ghana
was growing.

Beyond bilateral agreements, a regional approach can be detected in Indonesia’s actions. Apart from
the Southern African Development Community (SADC) and the East African Community (EAC), the
Economic Community of West African States (ECOWAS) offers abundant opportunities to boost trade
with Africa. There have been some recent developments, which can support these efforts. The
establishment of the Joint Commission of Bilateral Cooperation (JCBC) between the government of
the Republic of Indonesia and the Republic of The Gambia was a good example in this respect.
Follow up actions from the JCBC meeting took place in Jakarta in March 2014 in the areas of
agriculture, education, health, trade and technical cooperation. The government of Indonesia has
donated hand tractors to the governments of Senegal and The Gambia to support the mechanization
of agricultural sectors in these countries. The same developments are now being processed as well
with other West African countries.

In bilateral trade, the win-win strategy for Indonesia and ECOWAS countries is to create direct trade
relationships. It will also be essential to oversee the financial export guarantee schemes and
incentives, as well, according to Professor Georges Suha, former Gambian ambassador to UNIDO.
Suha emphasized in an interview that, “Indonesia recognizes Senegal’s potential as its entrance to
West African markets. The biggest trophy of this penetration is the Senegalese intention of buying two
CN-235-220 planes from state aircraft manufacturer PT Dirgantara Indonesia.” Also worth noting, in
2012 West Africa attracted the largest FDI volumes of any African region, estimated at USD15.1
billion, driven mostly by demand for resources, as reported by the African Economic Outlook 2013.

Stronger cooperation with Africa would give Indonesia a greater role, not only on the African continent
but in the rapidly changing context of Afro-Asian relations. Seeking ways to boost trade, assisting
African countries in different forms along the lines of the Bandung solidarit, and pursuing a pragmatic
foreign policy under a new president could all result in an even more powerful and assertive
Indonesia, one that may even warrant inclusion in the BRICS, perhaps as a replacement for Russia in
a new BIICS group. As economist Nouriel Roubini argued, “From an American perspective, Indonesia
is an attractive alternative to Russia.” In any case, the addition of Indonesia would obviously redefine
the BRICS, but it would also bolster its claim to be the most important interregional grouping in the
Global South.

Indonesia-Africa relationship

The legacy of the Indonesia-Africa relationship is written with a golden ink in history. Indonesia hosted
the 1955 Asia-Africa Conference in Bandung and is one of the initiators of the Non-Aligned
Movement. The summit clearly marked a monumental landmark for the relationship.  

In 2015, Indonesia once again hosted the conference in commemoration of its 60 thanniversary. This
summit marked a new era of relationship between Indonesia and Africa. The 2015 Asia-
Africa Conference revived the Bandung Spirit of anti-colonialism and solidarity among former colonies
and developing countries, and further strengthened the New Asian African Strategic Partnership.  In
2015 Indonesia was granted observer status in the African Union – Africa’s most ambitious regional
organization yet.

In 2016, trade between Indonesia and its Sub-Saharan counterparts jumped off the charts, by not just
double, but even multiplied by five times in some cases. With Rwanda, trade even multiplied by 17.  
Foreign Minister Retno LP Marsudi, and Deputy Minister AM Fachir have visited Africa three times.
This truly shows that Indonesia means business in Africa.

Other great economies have turned towards Africa -- labeled by many as “the region of the future”.
President Jokowi has reiterated that the African region is a top priority.  In the G20, Indonesia has
expressed full support to the G20 Africa Partnership and related programs. 

Minister Retno also said in her annual statement that Indonesia is giving development in Africa,
Central Asia, South Asia, and Latin America high priority. But while Asia is often referred and divided
into South Asia, Central Asia and so on, Africa is always referred as a whole continent. This indicates
that while Indonesia has great plans in the region, the reluctance to name specific African
subcontinents means that we are still in the process of defining which parts of Africa will be our main
focus. Therein lies the need of an occasion in which stakeholders from various sides can explore the
opportunities as well as discover their primary focus.

The  BRICS economies of Brazil, Russia, India, China and South Africa have long initiated forums
with African nations. The India-Africa forum summit has been going on since 2008, and China
pioneered the China-Africa Cooperation in 2000.  Vietnam developed the Vietnam-Africa International
Forum a few years ago. Though a latecomer, it’s the right time for Indonesia to improve in particular
its trade relations with African countries. 
The Global Competitiveness Index 2017-2018 by the World Economic Forum showcased many
similarities between Indonesia and the Sub-Saharan Africa economies. Both share the same hurdles
that are bottlenecking their economic growth; low education and lack of technological readiness.
Some experts have even indicated early symptoms of deindustrialization in the two regions. Thus
dialogue on sharing best-practices and confidence building measures is crucial.

As Minister Retno stated, the Indonesia-Africa relation must go beyond the Bandung Spirit. The 2015
Asia-African Summit should be viewed as the prologue of modern Indonesia-Africa Relations, and the
IAF should be its first chapter.

Relations between Indonesia and Africa have always been strong and vibrant for
decades. Indonesia remains consistent in its efforts to strengthen ties with Asian-African countries, as
shown through the Commemoration of the 60 th Anniversary of the Asian – African Conference in 2015
where delegates pledged commitments to building  stronger, more inclusive and sustainable
cooperation.

Stepping forward from these political and historical legacies, Indonesia has the ambition to
seriously improve economic relations with Africa. Indonesia is the largest economy in Southeast Asia,
the world’s fourth most populous nation, the world’s 10th largest economy in terms of purchasing
power parity, and a member of the G-20. The average country’s economic growth from 2007 - 2016
was 5.7%, the third highest in the G20. Indonesia’s GDP is expected to expand continuously.
 
According to Asian Nikkei and PwC reports, Indonesia is on track to become the world’s fourth largest
economy by 2050. To maintain its high economic growth, Indonesia has made inroads in diversifying
export bases to include more complex sectors. In that context, Indonesian President Joko Widodo has
repeatedly urged Indonesian business sectors to expand engagement with emerging countries, such
as Africa, including at the recent G20 Leaders’ Retreat in Hamburg, in which the President stated
Indonesia’s support for the G20 Africa Partnership and the achievement of Agenda 2063 in Africa
through Compact with Africa. The importance of economic partnership between African countries and
Indonesia is also highlighted within IORA cooperation to achieve a sustainable and equitable growth
for all. 

Recent economic indicators have clearly shown Africa’s potential. The economy of sub-Saharan
Africa grew around 3.5% in 2016, the second highest in the world after Asia. In 2020, according to
IMF, Africa is the 2nd largest continent that enjoys high growth of 4.3%. Furthermore, in terms of
population, approximately 62% of the African population is under 25 years-old, meaning that there will
be an abundant work force that can help increase Africa’s economic growth even higher. It is
predicted that in 2034, Africa is expected to have the world’s largest working-age population of 1.1
billion. Currently, there is around a 330 million middle class population in Africa  that has increasingly
stronger purchasing power. Reinforcing the positive outlook for growth is a continuing rise in
infrastructure investment among African countries. Spending on infrastructure has doubled over the
past decade, and now stands at 3.5% of GDP. 

Understanding these realities, Indonesia believes that it is a right time for Indonesia and Africa to

strengthen economic cooperation. The 2016 trade exchange between Indonesia and Africa reached
USD 7.66 billion and there is still a lot of room for economic potential among the two entities. 
 

Indonesia-Africa Forum

In the country’s pursuit to fulfill its potential of becoming one the biggest economies in the world,
Indonesia has actively sought to tap into potential and non-traditional markets and develop stronger
relations with other emerging economies. To that end, Indonesia hosted the inaugural Indonesia-
Africa Forum (IAF) on April 10-11, 2018 in Bali, where Indonesian stakeholders and their African
counterparts convened to explore economic opportunities and strengthen existing partnerships.

"If Indonesia and Africa are successful in our cooperation, then we can tell the world that cooperation
among emerging economies can also be achieved," Vice President Jusuf Kalla said during his
opening speech at the forum.

In his speech, Vice President expressed his hope that the forum would be able to establish real
economic cooperation, in various fields and continues to map cooperation in infrastructure, strategic
industries, and financing facilities.
 

The connection between Indonesia and Africa goes back to ancient times. In terms of anthropological
ties, some studies have revealed that the ancestors of the Madagascar people may have come from
Indonesia. In South Africa, a Malay community exists, whose members are descendants of Sheikh
Yusuf, an Islamic religious leader from South Sulawesi.

To realize all economic potential, it is important to generate possible economic cooperation through

a forum that targets all relevant stakeholders, encompassing government, business and other private
sectors.  

The Forum is the embodiment of the commitment of Indonesia and African countries to advance and
prosper together and become the first forum, where Africa and Indonesia can meet and discuss
concrete cooperation involving various stakeholders,"said Indonesian Minister for Foreign Affairs in its
report during the opening speech of the Indonesia-Africa Forum 2018 (IAF 2018), at Bali Nusa Dua
Convention Center, Denpasar.

 
The Minister for Foreign Affairs hoped that the IAF event can be maximally utilized to explore more
potential cooperation that will benefit Indonesia-Africa in order to achieve mutual prosperity. "This time
for Africa", said Indonesian Foreign Minister firmly.

The first-ever IAF 2018 event on the theme "Developing Sustainable Economic and Investment
Cooperation" was officially opened by Vice President, Jusuf Kalla. The event was attended by over
500 participants including 240 delegates from 46 African countries, International Organizations and
Development Partners. While from Indonesia, about 200 people were present from the government,
private sector, and business players. In the opening of the IAF 2018, RI Coordinating Minister for
Home Affairs, Minister for Trade, and Minister for Foreign Affairs were also present. "Let's hand in
hand in strengthening the relations between Indonesia and Africa and to build a just and prosperous
world together," said the Vice President in his keynote speech at the opening session of the IAF 2018.
 
The series of the IAF 2018 meeting programs will include discussion forums, industry fairs, and
business deals. On the sidelines of the meeting there will also be a number of bilateral meetings
between Indonesia and African countries.
 
Currently, Indonesia needs oil, cotton, and cocoa beans from Africa. While Africa requires palm oil,
motor vehicles, and instant noodles from Indonesia. In the field of investment, more than 30
companies in the fields of pharmaceuticals, textiles, energy and others, operating in Africa.
 
IAF 2018 is a showcase of concrete economic cooperation between Indonesia and African countries
to translate the political and historical closeness of Indonesia-Africa into a close and tangible
economic cooperation. The closeness of Indonesia and Africa has historically begun since the Asian-
African Conference (1955) continued with theNon-Alignment Movement(1965), New Asian-African
Partnership (2005), and 60th Commemoration of Asia-Africa Conference (2015).
 
During the IAF 2018 event, there were business deals worth USD 586.56 million, and Indonesia also
expressed its commitment to strengthen cooperation with Africa, among others, through the
enhancement of technical cooperation and capacity building to Africa region; improvement of
scholarship cooperation, development of competitive export credit facilities, increased connectivity
cooperation, and exploring trade agreements through the establishment of Preferential Trade
Agreement.
 
The meeting also discussed the potential and opportunities of cooperation between the two countries,
such as the cooperation in food security, creative and digital economy, energy, and construction, and
action steps to realize the possibility of cooperation programs that have not been explored so far.
 
The value of RI-Africa Trade in 2017 was USD 4.86 billion in export value and USD 3.97 billion in
import value of. With a surplus trade balance for RI of USD 887.28 million and an upward trend of
15.25% from 2016.
 
The main export commodities of RI to Africa, among others, are palm oil, processed food and
beverages, soaps, paper, garments, motor vehicles and spare parts. Meanwhile, Indonesia's main
import commodities from Africa are petroleum, cotton, cocoa beans, pulp, and chemicals for fertilizers
and industries.  
 
As the follow-up to the IAF which was successfully held in 2018, the Indonesia-Africa Infrastructure
Dialogue (IAID) will be held in August/September 2019. As such, the forum shall serve as an avenue
for multi-stakeholder engagements involving representatives from governments and the private
sector.

The IAF 2018 and IAID are also in line with President Joko "Jokowi" Widodo’s instruction on the
imperative to increase Indonesia’s exports to and investment in Africa.

Optimism about stronger economic collaboration with African countries through the IAF 2018 and IAID
are well founded.

African countries are potential trading partners for Indonesia. Data compiled by the Trade Ministry
show that Indonesia’s total exports to all African countries in 2017 amounted to US$4.86 billion, an
increase from the previous year, which stood at $4.16 billion. Indonesia is also ready to increase its
imports from Africa by importing several products including crude oil, cotton and other key
commodities.

To enhance economic ties, Indonesia will also encourage countries in Africa to reduce their tariffs,
which are among the main obstacles to economic cooperation.

Indonesia has investments in a number of countries in Africa — a continent with a gross domestic
product of $2.17 trillion and a potential market of 1.22 billion people (2016). Several African countries
have invested a total of $743 million in Indonesia. So far, key sectors in Indonesian-African economic
cooperation include the palm oil and automotive sectors, as well as textiles.

Africa has also contributed to Indonesia’s energy resilience, with countries like Nigeria and Angola
being among Indonesia’s key suppliers of oil and gas, vital elements in Indonesia’s rapid
development.

Moreover, as fellow emerging markets, African countries are reliable partners in advancing common
and, particularly, Indonesian national interests in strengthening its presence in the global market. For
example, Indonesia has worked together with key African countries like Nigeria and Madagascar to
advance sustainable palm oil as one of the key drivers to realize sustainable development goals
(SDGs).

Against this background, the IAF 2018 provided a space for its participants to unleash potential and
explore various opportunities between Indonesia and Africa. It also discusses ways and means to
boost existing and future cooperation, including in the area of development cooperation, both in terms
of quality and quantity.

Among the elements of development cooperation that both parties seek to increase is vocational
training and scholarships for the citizens of Indonesia and countries in Africa. In 2017, around 131
participants from several countries in Africa attended, and benefited from, vocational training in
Indonesia, as well as benefiting from their countries’ developing cooperation with Indonesia.

At the IAF 2018, there were business deals signed as well as business-contract announcements.
Strategic projects was announced during the forum include Indonesian state-owned construction firm
PT Wijaya Karya’s (WIKA) construction projects in Niger and Algeria; Indonesia’s oil trade with Nigeria
and Angola; as well as Senegal’s interest in purchasing CN-235 aircraft made in Indonesia. It was
also hoped that PT INKA can participate in a project in Zambia.

To ensure follow ups, the forum also provided an opportunity for its participants to make the
necessary preparations for an upcoming Indonesia-Africa Infrastructure Dialogue, which will take
place in the second half of 2019. The forum will also feature an exhibition highlighting Indonesia’s
strategic industries as well as retail businesses.

Bound by the spirit of the Bandung Asia-Africa Conference of 1955, the New Asian-African Strategic
Partnership (NAASP) of 2005 and other related forums, the ties between Indonesia and the African
continent go well beyond economic realms.

Indonesia and many countries in Africa are fellow and active proponents of the Non-Aligned
Movement. In a world divided by political blocs, such a standpoint reflects on Indonesia’s and other
countries’ stance as independent-minded nations. During the same period, Indonesia has been active
in advocating the independence of African countries. Indonesia also walks the talk through its
contributions to various peace-keeping and peace-building missions in Africa.

Indonesia's role in the UN Peacekeeping Operation Forces puts the country as one of the role model
in Lesotho's and other countries’ efforts in the continent to participate in similar programs in Africa.
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