Indonesia, Turkey Agreed to Increase Trade Cooperation

Photo by Laily Rachev

JAKARTA (TheInsiderStories) – The governments of Indonesia and Turkey have agreed to restore the positive trend of trade and investment between the two countries. These efforts will be conducted through negotiations between the Indonesia-Turkey Comprehensive Economic Partnership Agreement (IT-CEPA) as well as reducing trade barriers and creating a conducive investment climate.

The agreement was reached after President Joko Widodo and his ranks held a bilateral meeting with Turkish President Recep Tayyip Erdoğan at the Turkish Presidential Palace, Ankara on Thursday (6/7). The meeting with President Erdoğan was part of President’s State visit to Turkey as well as a The 12th Turkish President’s visit to Jakarta in 2015.

“We have agreed to restore the positive trends of trade and investment, among others, through negotiation between IT-CEPA, then reducing or terminating trade barriers and creating a conducive investment climate,” said Widodo when giving a press statement together with Erdoğan.

In addition, the Head of State also conveyed to President Erdoğan about several areas of potential cooperation for both countries to develop. Some of the priority areas of both countries are the areas of trade and investment, defense, energy, and countermeasures against terrorism.

“I welcome the concrete cooperation of the defense industry, including the launch of a “Kaplan” middle class tank with Indonesia and Turkey,” he said.

In the field of defense industry, the government of Indonesia and Turkey also agreed to develop aerospace cooperation. The agreement has been poured into a memorandum of understanding between state-owned aircraft producer PT Dirgantara Indonesia and Turkish Aerospace Industry.

“We have also agreed to increase cooperation in the field of submarine and truck making and will be followed up by teams from both countries,” Widodo added.

Meanwhile, in the energy sector, Indonesia has received support in terms of electricity supply in the Indonesian archipelago. Previously, a number of Turkish power plants have been operating in Medan, Amurang, Bolok, and Ambon in east of Indonesia to meet the electricity needs of people in the region.

“Strengthening cooperation in the energy sector is focused on meeting the needs of electric energy in the archipelago of Indonesia, among others through the use of power ship or supply power supply vessel,” the President explained.

Investment US$520 million

Widodo’s visit to Ankara also resulted in an investment agreement worth US$520 million. Head of the Investment Coordinating Board Thomas Lembong said, the signing of a memorandum of understanding between the Indonesian state-owned shipbuilding company PT PAL with Karadeniz Holding, a Turkish company engaged in energy and power generation vessels worth $320 million and an agreement PT Dirgantara Indonesia with Turkish Aerospace Industry worth  $200 million.

“The agreement covers the creation of four power ships with a power plant capacity of 36-80 MW,” he said in an official statement to the media on Friday (7/7).

According to Thomas, the agreement to make power ship in accordance with the wishes of the government to meet the needs of electricity in remote areas and meet the target of electricity 35 thousand MW. He further argues that the cooperation between PT PAL and Karadeniz Holding can fill the need for power ship at the regional level.

“Neighboring countries like the Philippines and Myanmar are potential countries as customers of the company,” he said.

While the agreement between PT Dirgantara Indonesia and Turkish Aerospace Industry includes three main things. Among the cooperation in the field of Marketing & Production Extention of N219, Joint Development and Production of N245 and UAV – ANKA Marketing & Production Extention, especially the expansion of Southeast Asia market including Indonesia.

Investment cooperation between Indonesian and Turkish companies is expected to increase the value of Turkey’s investment realization is still minimal in Indonesia. From BKPM’s data for the first quarter of 2017, the realization of investment from Turkey was only $100,000 consisting of 9 investment projects. The value indicates that no new investment has been made from Turkey during that period.

Talks on Global Issues

During the meeting, Widodo and Erdoğan also agreed that both countries want to take part in solving global problems. One of them is the question of diplomacy now facing the Qatari country.

As for the handling of global terrorism, the two countries have the same view about it. Both also agreed to share intelligence information followed by the development of intelligence information technology systems to further facilitate the handling of global terrorism.

“Indonesia and Turkey have agreed to increase cooperation especially related to Foreign Terrorist Fighters through cooperation in the field of intelligence information and also the development of IT systems in the field of intelligence so as to facilitate us to cooperate in order to eradicate terrorism,” he said.

Finally, through his statement, the Head of State expressed his appreciation to the Turkish government which has supported the nomination of Indonesia to the UN Security Council for the year 2019-2020. Previously, several countries have also expressed support for Indonesia’s nomination as a non-permanent member of the UN Security Council.

Before submitting a press statement with President Jokowi and President Erdogan witnessed the signing of a memorandum of understanding on health cooperation and the launching of the Indonesia-Turkey Comprehensive Economic Partnership Agreement.

(Writing by Linda Silaen, Email: