Charting a Course to Jakarta

Russia and Indonesia see untapped potential in expanding trade and cooperation

Indonesian President Prabowo Subianto recently hosted Russian First Deputy Prime Minister Denis Manturov, who led a large Russian delegation during an official visit to Jakarta.

During the meeting, the two sides discussed key issues of bilateral cooperation in trade, economy, humanitarian and other areas. The talks focused on the qualitative expansion of relations with Indonesia — the largest country in Southeast Asia and the fourth most populous country in the world. The potential for bilateral cooperation is far from exhausted; one could even say that it is just beginning.

According to Manturov, trade between Russia and Indonesia reached $4.3 billion in 2024 (compared to over $130 billion with China and $39 billion with the U.S.). While this represents an increase of $300 million from the previous year, it still falls short of the true potential of both countries. This is particularly notable given Indonesia’s rapid growth, with a GDP of $1.4 trillion (compared to Russia’s $2 trillion). Several factors contribute to the modest numbers: sanctions, political complications, logistical issues, settlement problems, and both countries’ focus on other markets. As with many of Russia’s trade relationships, the need to switch to local currencies for transactions has become urgent.

Currently, Russia’s main exports to Indonesia are in the energy and agricultural sectors. Wheat shipments from Russia will resume in 2023, and halal-certified meat exports are expected to begin in the near future. At the extended meeting of the Russian-Indonesian intergovernmental commission in Jakarta last week, Manturov announced efforts to diversify exports. He said Russia could increase shipments to Indonesia of forest products, fertilizers, metallurgical goods and other items.

But much depends on solving logistical problems. «We are paying special attention to cooperation in the transportation sector. This includes the creation of cost-effective container routes and the implementation of comprehensive multimodal solutions. Leading Russian logistics companies are also considering investment projects aimed at developing port infrastructure», Manturov said during the meeting.

Just a few days earlier, FESCO announced that its first vessel would call at the Port of Jakarta in April as part of a new Vietnam-Malaysia shipping route. Meanwhile, Sergey Shishkarev, Chairman of the Board of the Delo Group, announced plans to build a dedicated terminal in Novorossiysk for the import of Indonesian palm oil.

According to Manturov, the expansion and simplification of mutual market access also depends on the signing of a free trade agreement between the Eurasian Economic Union (EAEU) and Indonesia. On April 14, he said that the agreement is expected to be finalized by the end of the year. In January 2025, Indonesia officially joined BRICS, a move that could further strengthen bilateral ties.

There is also considerable potential for investment cooperation. Russia and Indonesia are exploring joint projects in renewable energy, hydrocarbon development, and nuclear energy. Russia is ready to supply Indonesia with large-scale nuclear reactors to help the country address its energy challenges.

Cooperation is expanding in other areas as well. In 2023, 180,000 Russians visited Indonesia — a 13% increase compared to pre-COVID levels. At the same time, around 6,000 Indonesian tourists traveled to Russia. The resumption of direct flights and the easing of visa requirements have contributed to this growth, although the current volume of exchanges still falls short of its full potential.

Indonesia is an active member of the Non-Aligned Movement and maintains a policy of equidistance from major global power centers. While China — often seen as the leader of the global South — has long been Indonesia’s top trading partner, Jakarta also maintains good relations with the United States. However, this does not preclude the possibility of expanded Russian-Indonesian military-technical cooperation.

Recently, Australia made headlines by spreading a false claim during its election campaign that Russia was in talks to use an Indonesian airbase for long-range flights. While such speculation is unfounded, cooperation in shipbuilding — including dual-use vessels — is quite realistic.

In short, the potential for bilateral cooperation remains largely untapped. But the political climate is favorable. It’s worth noting that this new momentum comes as the two countries celebrate the 75th anniversary of diplomatic relations. Earlier, Russian Security Council Secretary Sergei Shoigu also visited Jakarta. According to Indonesian officials, President Prabowo Subianto is expected to visit Russia later this year at the invitation of the Russian president — likely on the occasion of Victory Day celebrations. The upcoming summit is expected to give a new impetus to the development of Russian-Indonesian relations.