As weak global demand continues to affect Indonesia’s trade balance, the country aims to expand exports and investment into Algeria, which offers potential as an alternative destination
Indonesian Ambassador to Algeria Safira Machrusah, said Indonesia and Algeria had stagnant bilateral relations shortly after the latter decided to support the independence of Timor Leste in 2002 from Indonesian occupation, prompting Jakarta to halt all relations with the North African country.
However, as time went by, some Algerian importers saw rising consumer demand in their country for Indonesian furniture that was mainly produced in Jepara, Central Java, and started to import the goods from third parties.
“[Algerian importers] buy the products from Paris, France, through some business channels in Malaysia,” she said during a briefing with members of Indonesian press in Algiers recently.
Based on that fact, Safira is convinced that Algeria, despite being a minor trade and investment partner, could be a prospective alternative market as the Indonesian government seeks to diversify its economic relations, which would be helped by an improved trade balance between the two-Muslim majority nations.
Trade Ministry’s data showed that total trade balance between Indonesia and Algeria stood at negative US$194.7 million between January and July this year, far lower than the negative $75.1 million booked in the same period last year.
The data also revealed that between January and July this year, Indonesia saw its non-oil and gas shipments to Algeria decline to $65 million from $121.4 million in the same period last year. Indonesia’s exports to Algeria only grew an average of 0.05 percent between 2011 and 2015, the data showed.
In order to grow exports to Algeria, Safira said her party was aiming to create partnerships in potential sectors, such as the creative economy, tourism and agriculture as well as maritime.
As part of the efforts to introduce Indonesia’s businesses to Algeria, she said the government would hold an exhibition in the country’s capital city of Algiers called “Indonesia Day” from Nov. 23 to 27 that would be sponsored by Indonesian state-owned oil and gas giant Pertamina, alongside participation from private companies Indorama Corporation and Indofood, as well as small business owners.
Both countries trade ministers, Airlangga Hartarto and his Algerian counterpart Abdessalem Bouchouareb, signed a memorandum of understanding (MoU) in August on cooperation in the sectors of textiles, construction materials, furniture, spare parts, petrochemicals, metals, components and fertilizers.
“The agreements we outlined in this strategic partnership, I feel are very important. I hope that both countries can further their cooperation to develop each other’s industrial sectors in the future,” Bouchouareb said as quoted by Antara news agency.
A month prior, Indorama signed deals with Algerian state-owned phosphate companies Asmidal and Manal to develop a phosphate mine and build two plants to process the crop nutrient in the North African country at a total expected cost of $4.5 billion.
Last month, Pertamina also signed a deal with its Algerian counterpart Sonatrach on upstream and downstream activities following the former’s role as new operator of the Algeria’s Menzel Lejmat North (MLN) oil field, which it acquired from American giant ConocoPhillips.
Source: Indonesia seeks more trade, business deals with Algeria Wed, October 5 2016 – The Jakarta Post
