Indonesia and Saudi Arabia set to double trade by 2020

1 min readUpdated May 11, 2016May 11, 201611:58 PM

Indonesia’s Trade Ministry received a business delegation from Saudi Arabia last week, as the two countries announced a plan to double their bilateral trade value by 2020, according to a report published by The Jakarta Post.

The total trade between the two countries currently stands at a value of US$8.5 billion and is thought to leave plenty of room for expansion, according to the Indonesian Trade Ministry.

“The figures are yet to reflect the potential of both countries,” said Arlinda Imbang Jaya, Trade Ministry Expert for Trade Services.

Saudi Arabia is said to have expressed interest in cooperating with several Indonesian businesses in the fields of cosmetics, pharmaceutical products and medical equipment.

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What this means

The ambitious plan to double bilateral trade to US$17 billion by 2020, using existing US$8.5 billion, offers clear opportunities for retailers. Saudi Arabia's explicit interest in Indonesian cosmetics, pharmaceuticals, and medical equipment indicates where immediate growth will likely occur, aligning with similar regional diversification efforts. This move pressures other Asian markets to secure comparable trade agreements to remain competitive for Saudi investment. While the current trade figures are deemed below potential by Indonesia's Trade Ministry, the risk lies in whether specific business deals materialise quickly enough to meet such a rapid timeline. Watch for initial cooperation agreements between Saudi investors and Indonesian businesses in these stated sectors.

Maria Santos

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