Russia, Indonesia Plan Partnerships That Would Boost Trade, Investment

25 February 2016 Indonesian and Russian officials and companies have pledged to boost trade and investment between the two countries.

Hatta Rajasa, Indonesia’s coordinating minister for economic affairs, told reporters on Tuesday that the two governments have formed five working groups that will talk on various partnerships, ranging from trade and investment to tourism and energy.

“Trade between our two nations in the past five years has been increasing by an average 29.7 percent per year. In 2012 it reached $3.4 billion and we have agreed to increase it to $5 billion in 2015,” Hatta said.

“On the investment side, there is a potential of $5 billion to $6 billion investment this year from Russia,” he said, adding that two companies, Russian Railways and Rusal, have agreed to invest in the country.

According to Hatta, Russian Railways, Russia’s largest railway and locomotive company, is investing about $2 billion on a railway in East Kalimantan.
Rusal, one of Russia’s largest aluminum producers, has also agreed to invest up to $3 billion to build an alumina plant in West Kalimantan, he said. In a statement released on Tuesday, Rusal said it has chosen Arbaya Energi as its local partner. Arbaya is part of Satmarindo Group, a business controlled by Suryo Bambang Sulisto, who is also chairman of the Indonesian Chamber of Commerce and Industry (Kadin).

The statement did not provide any details on the investment plan. Kamaz, Russia’s largest truck manufacturer, is also planning to build an assembly plant for its vehicles in Indonesia.

Dmitry Rogozin, deputy prime minister of the Russian Federation, said that Russia sees big potential for further economic partnership with Indonesia.
“There is a lot of potential for partnership between our countries. We have never been political opponents, and we have seen more partnerships than competition,” Rogozin said.

He added that Indonesia and Russia are also discussing a potential partnership in the aerospace industry, involving transfer of knowledge in aeronavigation and aircraft maintenance.

Valery Krasnov, chairman of the board at Vi Holding, one of Russia’s largest mining groups, said that the company is considering investment in bauxite and nickel.
“We are talking about more than $100 million in the course of three to four years,” he said, without elaborating.