Indonesia's Strategic Pivot: Building Economic Bridges with the Gulf
Key Ideas
  • President Prabowo Subianto's state visit to Saudi Arabia resulted in US$27 billion of economic cooperation agreements, emphasizing a strategic shift towards the Gulf as a key partner.
  • Agreements with Saudi Arabia included investments in renewable energy, green hydrogen projects, and water desalination, aligning with Indonesia's energy transition goals.
  • The visit also showcased Indonesia's partnerships with Qatar and the UAE, forming a solid economic backbone for Prabowo's new south-south diplomacy approach.
  • Indonesia's resource sovereignty policies, industrial development plans, and focus on downstreaming have made it an attractive destination for Gulf investors looking for long-term strategic partnerships.
President Prabowo Subianto of Indonesia's recent state visit to Saudi Arabia signified a significant shift in Indonesia's global partnerships, focusing on the Gulf region's economic potential and strategic importance. The visit resulted in economic cooperation agreements worth US$27 billion, with a key emphasis on sectors like green hydrogen, renewable energy, water desalination, and more. This move not only highlighted Indonesia's commitment to its energy transition targets but also established a long-term strategic partnership with Saudi Arabia. Additionally, Indonesia launched a joint fund with Qatar and explored economic and defense cooperation with the UAE, forming a strong economic backbone for Indonesia's new diplomatic approach. The Gulf's interest in Indonesia stems from its resource sovereignty policies, industrial development plans, and focus on downstreaming, making it an ideal partner for creating industrial ecosystems. Prabowo's continuity with Joko Widodo's vision and the country's attractive policies for foreign investment have drawn Gulf investors looking for integrated, long-term partnerships. The Gulf countries view Indonesia's growing influence and neutrality as valuable diplomatic assets, further solidifying the economic ties between the regions, supported by cultural affinities.
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