When countries establish relations for trade purposes, the world at large sees benefits, apart from the countries involved. With a view to expanding its tentacles for economic growth as diversely as possible, the United Kingdom is actively engaging with regions in the Asia-Pacific area. A key partner involved in this concerted effort to create strong economic ties with the UK, is Indonesia. Southeast Asia has always been a draw for the West where trade and commerce are concerned. Now, the UK seeks to fortify connections in the fields of healthcare, education and infrastructure development, investing heavily in the Southeast Asian region.
A Long Standing History
UK-Indonesia connections have existed since 1949. Diplomatic relations between the two nations have served to establish a relationship resulting in bilateral trade reaching somewhere above US$2 billion in the year 2021. At the close of Q2 of the year 2022, the total trade between the two nations (in terms of goods, services, imports and exports) reached 3.2 billion GBP. In 2022, Indonesia sits in pride of place as being the UK’s 54th biggest partner for commerce. That says something about a small group of islands forming solid ties with a leading global nation. In the years previous to the pandemic, and going up to 2019, the yearly trade between the two countries was at US$3.8 billion.
Encouraging Trading Stats
In 2021, Indonesia made the most of a surplus of trade worth US$2 billion. This was primarily in the areas of footwear, products made of wood, oil, animal and vegetable fats, furniture, lighting signs, and prefabricated buildings. In the very same year, the UK exports into Indonesia accounted for nuclear reactors, machinery, boilers, wood pulp, tramways, vehicles, iron and steel. Additionally, medicine and pharmacy products were also a major part of exports. Trade is strong between the two countries, and the UK wants to take its relationship with Indonesia one step further.
UK’s Goals
With the UK providing an impetus to trade in the future in the Asia Pacific region, it plans to make trade ties even stronger. The UK’s goal is to make an expenditure of a maximum of 500 GBP (some US$606 million), for sustainable and green projects in the infrastructure sector. This is not only geared with a view towards Indonesia, but also aimed at ties with Cambodia, the Philippines, Laos and Vietnam. UK-Indonesia bonds are being planned over a subsequent five-year period. Additionally, the United Kingdom has concrete plans, and is moving towards joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership or the CPTPP. If this works out for the UK, it will stand out as the first country in the Western region of Europe to achieve this.
The UK’s success in joining the CPTPP will go a long way in strengthening relations in trade and commerce with Indonesia, besides the Southeast Asian region generally. Looking at the big future picture, the UK has some foresight where Indonesia is concerned. The archipelago is estimated to become the seventh-biggest economy, globally, by 2030. This is as a result of 135 million individuals gauged to enter the Indonesian demographic. Apart from this, the UK is savvy enough to know some US$1.8 trillion investment opportunities exist in the nation. These vary from agriculture to consumer-driven services and products. From the standpoint of Indonesia, trade with foreign nations is set to full steam ahead..
Joint Efforts are Winning Efforts
The UK-Indonesia collaboration is the key to success in commerce and economic growth for both countries involved in partnerships. The UK and Indonesia have announced the establishment of a joint trade and economic committee. There is also a joint trade review between these two nations. The cooperation between the UK and Indonesia is bonded by both countries’ common interests in green and renewable energy, beverages and food, life sciences and healthcare. Other commonalities include training and education, professional services, agriculture, and finance.
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