Indonesian State Companies Scramble For Africa

Courtesy of The Financial Times, an article on recent deals by Garuda and Wijaya Karya which signal increasing south-east Asian influence in Africa:

There were smiles from the African delegates gathered on April 10 for the Indonesia Africa Forum in Bali as Indonesian company executives signed a series of Africa-related business deals. The agreements not only signalled the commitment of Indonesian companies to Africa’s economic growth, but also showed that the country is serious about increasing its influence on the continent.

The business deals signed on the day were worth $586.56m and included one worth $26.7m by state-owned contractor Wijaya Karya in Niger. Future potential business deals worth a total of $1.3bn were also announced, including one in Zambia by Inka, the state-owned train manufacturer, and one in Nigeria by state-run oil company Pertamina.

“[We] work together in advancing economic co-operation between Indonesia and Africa,” said Jusuf Kalla, Indonesia’s vice-president, in his opening remarks for the two-day conference. “The development of co-operation with Africa is a priority of Indonesia’s foreign policy.”

Mr Kalla drew laughter from the crowd as he drew parallels between Africa and Wakanda, a fictional country in the recently released film “Black Panther”. “‘Wakanda’ had large potential, which is sometimes unknown to the outside world. So is Africa, a continent with immense potential,” Kalla said.

Luhut Pandjaitan, Indonesia’s coordinating minister for maritime affairs, said the Jakarta government was planning a task force to export Indonesian infrastructure to Africa “in the near future”. This article is from the Nikkei Asian Review, a global publication with a uniquely Asian perspective on politics, the economy, business and international affairs. Our own correspondents and outside commentators from around the world share their perspectives on Asia, while our Asia300 section provides in-depth coverage of 300 of the biggest and fastest-growing listed companies from 11 economies outside Japan.

Jakarta’s Africa push is a welcome development for Indonesian companies, as seen in the optimism among the executives attending the event. “Africa’s growth potential is huge,” said Iwan Joeniarto, president of GMF AeroAsia, the maintenance unit of the country’s flag carrier Garuda Indonesia. “Several African airlines are experiencing 100 per cent growth, so for us, the market is highly interesting.”

GMF already has deals with airlines in countries including Kenya and Djibouti, and Mr Joeniarto said he had signed a maintenance deal with Nigeria’s Max Air as well as Ethiopia’s Ethiopia Airlines worth $3.17m.

Mr Prasetyadi, operations and information systems director at state-owned port operator Pelindo, echoed Mr Joeniarto’s enthusiasm. “Africa is really attractive, really growing,” he said. “Therefore, we want to enter the market within this year.”

Indonesia’s history with Africa goes back decades. Former Indonesian president Sukarno was instrumental in forming the Asian-Africa Conference, also known as the Bandung Conference, in 1955 as nations from both regions looked to form a block that was separate from any involving the US or the then Soviet Union.

The archipelago nation has lacked any significant diplomatic achievements since then, and the current government, led by President Joko Widodo, is looking to leverage the deals forged by the state-owned enterprises to increase the country’s influence in the continent as well as in the international community.

As a start, Indonesia is pushing to become a non-permanent member of the United Nations Security Council, and any backing from African nations will help its case. Mr Widodo has also set a goal for Indonesia to become one of the 10 biggest economies in the world by 2030. Tapping into the growing African market is seen as a fast track to achieving that target.

However, at least for now, government officials are being modest about such motivations. “You might ask, why [this] Indonesian initiative,” said Retno Marsudi, the foreign minister. “The answer is very simple and very easy: because Indonesia loves Africa.”

Her comments were met with a hearty round of applause.



This entry was posted on Wednesday, April 18th, 2018 at 3:11 pm and is filed under Indonesia.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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