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The Diplomat
10-07-2025
- Business
- The Diplomat
Jakarta-Riyadh Convergence: Prabowo's Saudi Outreach and the Pursuit of Foreign Investment
Last week, Indonesian President Prabowo Subianto visited Jeddah, marking his first official visit to Saudi Arabia since taking office in October 2024. The visit comes against the backdrop of Prabowo's attempts to increase foreign investments, especially from the Gulf states, as part of a broader strategy to boost economic growth in Indonesia. During the recent visit, Prabowo met Saudi Crown Prince Mohammed bin Salman and discussed mechanisms to strengthen bilateral ties and bolster cooperation across key sectors. The bilateral trade between both countries has grown steadily in recent years, and Indonesia remains one of the largest trading partners of Saudi Arabia in Southeast Asia. Moreover, the overall trade between the Gulf Cooperation Council (GCC) and ASEAN has also grown in recent years, reaching $123 billion, constituting about 8 percent of the GCC's total trade. Saudi Arabia's trade dynamics with ASEAN are dominated by energy and petrochemicals, and Riyadh intends to increase the potential for cooperation and investments in non-oil sectors in which Indonesia features prominently. Indonesia's economy has maintained steady growth in recent years under the former President Joko Widodo. Jokowi's tenure was characterized by an infrastructure push and an ambitious vision of economic transformation aimed at turning Indonesia into a regional manufacturing and investment hub. Prabowo rallied support during his campaign and came to power promising economic growth, reducing unemployment and poverty rates, and increasing public welfare initiatives. While Prabowo seeks to continue Indonesia's development trajectory, his policies mark a shift toward expansive social spending and a more populist approach, which has been criticized by the opposition and has raised concerns, especially regarding his ambitious $28 billion Free Nutritious Meal Program. Reports indicate that investors are anxious about the current economic trends as the Jakarta Composite Index dropped by over 10 percent since Prabowo took office, while the rupiah has weakened by 7 percent against the U.S. dollar. However, Prabowo remains confident about his target of achieving 8 percent growth by 2029, for which foreign investments into the country will be critical. During Prabowo's recent visit, Indonesia and Saudi Arabia signed deals worth around $27 billion, focusing on clean energy, petrochemicals, and mineral resources. Both countries also established a Supreme Coordination Council — an important step toward identifying new areas of collaboration and advancing efforts to enhance and diversify bilateral cooperation, particularly through joint initiatives in trade, energy, infrastructure, and strategic investments. Saudi Arabia's ACWA Power signed preliminary agreements with Indonesia's new sovereign wealth fund, Danantara Indonesia, and state energy firm Pertamina to explore renewable energy projects worth up to $10 billion. Indonesia and the Gulf Cooperation Council (GCC) had earlier officially launched free trade agreement (FTA) negotiations, with the first round scheduled for September 2025. This is a part of the wider trend between ASEAN and GCC countries to strengthen their economic ties. During the 2nd ASEAN-GCC Summit in Kuala Lumpur in May 2025, a joint declaration was adopted to deepen ties across transport, food security, and sustainable development. For Jakarta, this offers an avenue not only to expand market access but also to position itself as the bridge between Southeast Asia and the Gulf. Converging interests in energy, technology, AI, halal food business, and Islamic finance further anchor this cooperation. For Saudi Arabia, expanding investments in Southeast Asia, particularly in Indonesia, aligns with its Vision 2030 objective of diversifying away from traditional Western markets and expanding its economic and political footprint in Asia. Indonesia, as the largest economy and most populous nation in ASEAN, also holds substantial geopolitical weight, making it an increasingly valuable partner for Riyadh. Both countries also hold significant influence in the Islamic world — Indonesia as the largest Muslim-majority nation, and Saudi Arabia as the custodian of Islam's holiest sites. Indonesia sends the highest number of Hajj pilgrims annually, making the logistics, healthcare, and spiritual preparation a massive effort that demands strong bilateral coordination, especially amid recent challenges, such as the abrupt visa suspension and coordination lapses that left many pilgrims stranded. Moreover, both countries share aligned perspectives on key regional and global issues, and during the recent visit, both leaders emphasized their mutual concern for the Palestinian cause, echoing ASEAN's recent statement in support of Palestinian self-determination and a two-state solution. In the current circumstances, Indonesia faces external risks in maintaining economic growth momentum, especially with U.S. President Donald Trump's transactional approach toward the region and trade matters. The Trump administration threatened steep 'reciprocal' tariffs, and Indonesia filed a second proposal to the U.S. to avert the possibility of a hefty tariff. Nevertheless, on July 7, the Trump administration sent a letter stating that tariffs for Indonesia would be raised to 32 percent as of August 1. As part of its efforts to reduce the trade surplus with the U.S. and ease bilateral tensions, Indonesia is planning to ramp up imports of American crude and LPG, aimed at both narrowing the trade gap and diversifying its energy basket. This shift could gradually lessen Indonesia's dependence on Middle Eastern imports. Amid growing concerns over tariffs and their impact on domestic markets, Jakarta must strengthen ties with other major powers that offer long-term investment potential and align with its strategic interests. In this context, Gulf powers have become increasingly relevant as they have, in recent years, increasingly looked at Asian markets for strategic investments, seeking to position themselves within this broader landscape of diversified economic partnerships. Indonesia is deepening its cooperation with Gulf countries beyond traditional energy ties, pivoting toward non-oil sectors that align with both nations' national development agendas and domestic reform priorities. Both Saudi Arabia and Indonesia have carefully calibrated their foreign policies to avoid provoking the U.S. while insulating themselves from the unpredictability of the Trump administration, all while maintaining a balanced approach toward other major powers. This delicate balancing act, particularly in the context of evolving ASEAN-GCC-China trilateral dynamics, reflects Jakarta's broader objective: to safeguard its economic future from great power volatility while asserting itself more confidently in the growing space for middle-power diplomacy. The growing synergy between Jakarta and Riyadh reflects not only economic alignment but also a stronger convergence in navigating the evolving global order, including shared positions on key issues in the Islamic world.
Saudi Gazette
08-07-2025
- Business
- Saudi Gazette
Saudi Cabinet approves new property ownership law for non-Saudis
Saudi Gazette report JEDDAH — Saudi Arabia's Cabinet, chaired by Crown Prince and Prime Minister Mohammed bin Salman, approved on Tuesday a new law regulating property ownership by non-Saudis. The weekly session, held in Jeddah, began with the Crown Prince briefing the Cabinet on his recent talks with Indonesian President Prabowo Subianto and the phone call he received from German Chancellor Friedrich Merz. The Cabinet commended the outcomes of the first meeting of the Saudi-Indonesian Supreme Coordination Council, highlighting the strength of bilateral ties and the signing of agreements and memoranda of understanding between private sector entities in both countries. These agreements cover clean energy, petrochemicals, aviation fuel services, and other sectors aligned with a shared vision for advanced economic partnership. Acting Minister of Media Dr. Essam bin Saeed said in a statement to the Saudi Press Agency (SPA) that the Cabinet also reviewed Saudi Arabia's contributions to global economic growth, reaffirming the Kingdom's commitment to multilateral cooperation and market stability. This includes continued coordination with oil producers within the OPEC+ alliance to support petroleum market balance. The Cabinet welcomed the Kingdom's hosting of the 21st General Conference of the United Nations Industrial Development Organization (UNIDO), set to take place in Riyadh this November. The conference aims to develop joint solutions to challenges related to sustainable manufacturing, innovation, and technological transformation. In a related development, the Cabinet lauded the unanimous adoption by the UN Human Rights Council of a Saudi-led resolution to protect children in the digital space. The initiative stems from the global "Child Online Safety" campaign launched by the Crown Prince and reflects the Kingdom's commitment to a safer, more inclusive cyberspace for younger generations. The Cabinet also celebrated Saudi Arabia's continued top ranking in global cybersecurity, as reported in the 2025 edition of the World Competitiveness Yearbook. This achievement adds to the Kingdom's record of rapid progress in the technology sector, including localizing key technologies and enhancing international collaboration. Dr. Essam noted that the Kingdom's first-place ranking in the 2025 International Telecommunication Union's ICT Development Index confirms the strength of its smart digital infrastructure, growing investment climate, and a digital economy now valued at SR495 billion. Cabinet members praised recent advances in the fight against narcotics, including major operations targeting organized crime networks trafficking in illegal substances and continued efforts to safeguard public health and safety. Additional decisions from the session included approval of the updated National Transport and Logistics Strategy, approval of the organizational structure of the General Authority for Irrigation, approval of Saudi Arabia's adoption of World Drowning Prevention Day, to be marked annually on July 25. The Cabinet also approved a directive for the Social Development Bank to launch a guarantee program targeting the Kingdom's most financially vulnerable groups, enabling access to financing from the bank and other institutions.
Leaders
03-07-2025
- Business
- Leaders
Saudi Arabia, Indonesia Foster Ties with $27bn Investment Deals
Saudi Arabia and Indonesia have further deepened their ties by signing several deals and memoranda of understanding (MoUs) during the visit of the Indonesian President, Prabowo Subianto, to the Kingdom, according to the Saudi Press Agency (SPA). The visit witnessed the signing of numerous deals and MoUs between the private sector institutions in both countries, amounting to nearly $27 billion across multiple fields, including clean energy, petrochemical industries, and aviation fuel services. Saudi-Indonesian Ties On Wednesday, the Saudi Crown Prince and Prime Minister, Mohammed bin Salman, received Subianto at Al-Salam Palace in Jeddah, where they reviewed bilateral relations and explored ways to strengthen them across various fields. Moreover, Crown Prince Mohammed bin Salman and President Subianto co-chaired the first Saudi-Indonesian Supreme Coordination Council meeting, during which they endorsed the Council's governance and a number of recommendations to enhance joint cooperation in areas of common interest. Bilateral Trade In terms of economy, trade and investment, both sides underscored the strength of their economic ties. They agreed on fostering bilateral cooperation, particularly in priority sectors, supporting partnerships between the private sectors in both countries, and leveraging the opportunities provided by Saudi Vision 2030 and Golden Indonesia Vision 2045 to enhance cooperation across various fields. Furthermore, they hailed bilateral trade, which amounted to approximately $31.5 billion over the past five years, making Saudi Arabia the top trading partner for Indonesia in the region. They also welcomed the positive outcomes of the negotiations for a Free Trade Agreement between the Gulf Cooperation Council (GCC) countries and Indonesia, which took place in September 2024 and February 2025. Strategic Partnerships Both sides stressed the need for enhancing investment cooperation and intensifying efforts to enable strategic partnerships in priority sectors, most notably energy, financial services, mining, manufacturing, logistics, tourism, manufacturing, agriculture, and green technologies. In terms of energy, the Indonesian side praised Saudi Arabia's crucial efforts in enhancing the reliability and stability of global oil markets, as well as its positive role balancing global energy markets. The two sides agreed to boost cooperation in the supply of crude oil and its derivatives, improve supply chains and their sustainability in the energy field, and strengthen cooperation in the fields of electricity, renewables and mineral resources. Bolstering Cooperation The two sides also underscored the importance of bolstering cooperation in the fields of digital economy and innovation, judiciary and justice, labor and human resources, culture, tourism, sports, education and scientific research, industry and mining, agriculture, fisheries, and food security, in addition to enhancing air connectivity between the two countries. Moreover, Saudi Arabia and Indonesia agreed on strengthening and developing their defense cooperation, in a manner that serves their common interests and contributes to achieving regional and global security and stability. Short link : Post Views: 25
Saudi Gazette
02-07-2025
- Business
- Saudi Gazette
Saudi Arabia and Indonesia agree to bolster bilateral ties
Saudi Gazette report JEDDAH — Saudi Crown Prince and Prime Minister Mohammed bin Salman received Indonesian President Prabowo Subianto at the Royal Court of Al-Salam Palace in Jeddah on Wednesday. During the official meeting, the two leaders reviewed bilateral relations between the two countries as well as aspects of bilateral cooperation in various fields, and ways to further strengthen them. They also discussed regional and international developments, and the efforts made in this regard, in addition to a number of issues of common interest. The Crown Prince and President Subianto then chaired the first meeting of the Saudi-Indonesian Supreme Coordination Council. Several topics on the agenda were reviewed in the presence of the council members. At the conclusion of the meeting, the two leaders signed the minutes of the council's meeting. Earlier, upon arrival at the place, the Indonesian president was accorded an official reception. At the beginning of the official meeting, the Crown Prince welcomed President Subianto to the Kingdom while the Indonesian president expressed his happiness with this visit and his meeting with the Crown Prince. The talks and the Coordination Council session were attended by Minister of Energy Prince Abdulaziz bin Salman; Deputy Emir of Makkah Prince Saud bin Mishal; Minister of State and Member of the Cabinet Prince Turki bin Mohammed; Minister of Sports Prince Abdulaziz bin Turki Al-Faisal; Minister of Interior Prince Abdulaziz bin Saud bin Naif; Minister of the National Guard Prince Abdullah bin Bandar; Minister of Defense Prince Khalid bin Salman; Minister of Foreign Affairs Prince Faisal bin Farhan; Minister of State, Member of the Cabinet and National Security Advisor Dr. Musaed Al-Aiban; Minister of Hajj and Umrah Dr. Tawfiq Al-Rabiah; Minister of Commerce Dr. Majed Al-Qasabi; Minister of Finance Mohammed Al-Jadaan; Minister of Human Resources and Social Development Eng. Ahmed Al-Rajhi; and Saudi Ambassador to Indonesia Faisal Al-Amoudi. Several Indonesian ministers and senior officials also attended the talks and the council meeting.
Egypt Independent
21-05-2025
- Politics
- Egypt Independent
Relations between Egypt and Saudi Arabia are solid: Official
Egyptian Cabinet Spokesperson Mohamed al-Homsany said that the visit of the Speaker of the Saudi Shura Council to Egypt and his meeting with Prime Minister Mostafa Madbouly comes as part of reciprocal visits between both countries. During a phone interview with TV host Sherif Amer on the program 'Yahdoth Fi Masr' (Happening in Egypt), broadcast on MBC Masr, Homsany emphasized that relations between the two countries are strong and solid, with ongoing communication at various levels. Telations between Egypt and Saudi Arabia, both at the official and popular levels, are very close, a point Madbouly emphasized during the meeting on Tuesday. Homsany indicated that an agreement was reached on Tuesday to form the joint Egyptian-Saudi Supreme Coordination Council. He assured that the visit is, 'Not a response to any rumors, but rather comes to strengthen cooperation between the two countries and as part of a series of ongoing visits that reflect the depth of bilateral relations.'
