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The Prospect of Indonesia and Kazakhstan Relations after Kassym Jomart Tokayev elected as the Second President of Kazakhstan

The Prospect of Indonesia and Kazakhstan Relations after  Kassym Jomart Tokayev elected as the Second President of Kazakhstan

01/07/2019

By Torang Pakpahan
The writer is staff of the Centre for Education and Training at the Foreign Ministry.
The views expressed are his own.


On 12 June 2019, Kassym Jomart Tokayev from Nur Otan Party was inaugurated as the second President of Kazakhstan after winning the election with nearly 71% of the votes against Amirzhan Kosanov from National Patriotic Movement “Ult Tagdyry”, who only received 16% votes. On March 2019, Tokayev was appointed as acting president when the first President of Kazakhstan, Nur Sultan Nazarbayev stepped down after ruling the country since April 1990.

Before running for presidency, as Senate Speaker of Kazakhstan, Kassym-Jomart Tokayev visited Indonesia on March 2018 and had meeting with President Joko Widodo, Vice President Jusuf Kalla, Chairman of the People’s Consultative Assembly, Zulkifli Hasan and Speaker of the People’s Representative Council Bambang Soesatyo. The visit focused also on how to increase economic and interregional partnership as well as cultural, humanitarian and inter-parliamentary cooperation. There are a lot of opportunities that could be explored by the two countries in order to bolster bilateral cooperation in the trade, investment and tourism and other sectors.

The diplomatic relations between Indonesia and Kazakhstan was established on 2 June 1993. Since then, both countries have been working closely to enhance their political and economic relations. There were several visits carried out by the two heads of states, high-ranking government officials, legislative and judicial officials as well as business sectors, academics, and non-governmental organizations.

In the political sector, Kazakhstan supported Indonesia’s candidacy as non permanent member of the United Nation Security Council (UNSC) 2019-2020. This support showed that Indonesia is an important country for Kazakhstan not only for bilateral but also multilateral cooperation. Kazakhstan has played important role regionally and globally and became non-permanent member of the UNSC for the period of 2017-2018.

In the economic sector, there are still many rooms to enhance cooperation, particularly in the field of trade, oil and gas, agriculture, mining and natural resources and tourism industry.  According to the statistical data from the Indonesian Ministry of Trade, Indonesia-Kazakhstan trade value in 2018 amounted USD 60,29 million increased  compared to value in 2014  that only reached USD 36,46 million.  For the period of  January-March  2019, trade value between Indonesia and Kazakhstan  reached  USD 143,41 million, of which Indonesia exports to Kazakhstan amounted USD 105,88 million and  import from Kazakhstan amounted USD 37,53 million. This figure in 2019 shows that both countries finally succeeded in achieving trade value of USD 100 millions set for 2017 as agreed by the Head of State of the Republic of Indonesia and Kazakhstan in Jakarta on April 2012.

Kazakhstan's main export commodities to Indonesia such as zinc, iron and steel, machinery, mechanical appliances, nuclear reactors, boilers; tools, implements, cutlery, spoons and forks, of metal base; thereof parts of base metal. Meanwhile, Kazakhstan's largest import commodities from Indonesia are currently dominated by machinery, mechanical appliances, nuclear reactors, boilers, products of plastics, coffee, tea, maté and spices, soap, organic surface-active agents, washing preparations, lubricating preparations and artificial.

The main challenges in Indonesia – Kazakhstan trade relations are logistics and the transportation of the commodities. In this case, Indonesia should consider Lianyungang Port in China as hub for potential export commodities to Kazakhstan. The commodities will be transported form Lianyungang to Khorgos Gateway Dry Port located within the broader Khorgos Eastern gate SEZ, Kazakhstan. Lianyungang Port has been used by other East Asia Countries as hub for their trade commodities to Kazakhstan or to other Central Asia and European Countries.

Regarding investment sector, the investment value of Kazakhstan to Indonesia in 2017 based on data from the Indonesian Investment Coordinating Board (BKPM RI) amounted USD 1,032 million, increased significantly if compared to 2016 which amounted USD 12,1 thousands. The investments carried out in Indonesia are among others: industries of stone goods for household use, displays and building materials in East Java and Organizing of entertainment and recreation activities in Bali.
 
To sum up, the trend of bilateral relationship between Indonesia and Kazakhstan in various sectors has shown a significant progress and is expected to get stronger in the future. Bilateral trade volume will undoubtedly increase rapidly should the countries can well-managed and address the challenges such as logistic and transportation aspect of the commodities. Besides, the Roadmap shall be charted out by the two countries in order to fully implement the commitments and agreements agreed through MoUs and other legal documents resulted from the meetings between government officials and private sectors of the two countries, also by conducting the Second Joint Commission Economic Cooperation (JCEC) in the nearest future.
 
Another important thing that is equally important is to encourage the people-to-people contacts to make people from the two countries to get know each other. Both countries recognize some similarities such as multiethnic, multicultural, multilingual and multi religious which will easily create mutual understanding and respect of each respective histories, culture and civilization.