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Russia to assist in new capital city development in Indonesia

10 September 2019
Russia has vowed to facilitate the development of infrastructure in Indonesia's new capital city in East Kalimantan.
"However, Russia questions the support of the Indonesian government for the sustainability of the coal railway project in Central Kalimantan. I will convey it to the minister concerned with this issue and what the obstacles are," Indonesian Trade Minister Enggartiasto Lukita stated after a bilateral meeting with Russian Minister for Economic Development Maksim Oreshkin in Bangkok, Thailand, on Tuesday.
The meeting was held on the sidelines of the 51st ASEAN Economic Ministers' Meeting (AEM).
"However, Russia will also offer support for other infrastructure, particularly concerning the relocation of the capital," Lukita remarked.
The Indonesian government has decided to move its capital city from Jakarta to the districts of Kutai Kartanegara and North Penajam Paser, East Kalimantan, with investment reaching nearly Rp466 trillion. The relocation process will be completed no later than 2024.
During the meeting, Lukita also raised questions on Russia's policy of hiking the amount of tax on Indonesian palm oil products that increased to 20 percent, from 10 percent.
Minister Oreshkin tendered a clarification that protection was not the intention behind Russia’s tax hike or a hindrance to blocking Indonesia's palm oil products. He also vowed to review the policy.
"He said the efforts were not a form of protection, and he will calculate the impact on derivatives products for consumption in Russia," Lukita stated.
The total bilateral trade between Indonesia and Russia until the end of 2018 had reached US$2.5 billion. During the January-June 2019 period, the trade between both nations had reached $1.03 billion, with an Indonesian deficit of $237 million.
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