Labuan: Indonesian Ambassador to Malaysia Datuk Hermono said the economic partnership between Indonesia and Malaysia has been consistently progressing, indicating a significant strengthening of bilateral relations.
He said bilateral trade between Indonesia and Malaysia reached US$28.5 billion (RM134.1 billion) in 2022.
However, Hermono said this figure could drop by a significant 20-30% due to a significant drop in commodity prices, particularly coal, Indonesia’s biggest export to Malaysia, followed by crude palm oil. He said he was concerned about this.
“We expect trade volume with Malaysia to decline by approximately US$7 billion this year.
“As of September 2023, the recorded trade value was USD 17.5 billion, which he estimates will reach around USD 22 billion by the end of the year,” he said after the general meeting of the Indonesian Consulate General at Tiara Hotel Labuan. He said this in an interview with Bernama. here on sunday.
He said that despite challenges in the trade sector, the tourism industry appears to be thriving.
“Malaysia leads the number of visitors to Indonesia, ahead of China, India and Singapore.
“Since the coronavirus outbreak, the number of Malaysian tourists in Indonesia has increased rapidly, reaching about 700,000, which is about the same as the number of Indonesian tourists visiting Malaysia.
“Before the pandemic, Malaysia was bringing about 2.5 million tourists to Indonesia annually,” he said.
Mr. Hermono highlighted the positive development of the economic situation, citing the relocation of Indonesia’s capital from Jakarta to Nusantara in East Kalimantan.
He said the relocation of the capital is expected to promote economic spillover to Sabah and Sarawak.
“Currently, ongoing development projects in Nusantara are providing new business opportunities for Malaysian investors in various construction projects such as hotels, hospitals and support facilities,” he said.
Indonesia’s economy is on an upward trajectory with a focus on digital transformation, but Indonesia’s elections scheduled for February 2024 are causing foreign investors to take a wait-and-see attitude regarding future investments. Hermono admitted.
“Strengthening bilateral economic relations remains a top priority for President Jokowi Widodo, reflecting his commitment to fostering a strong partnership between Indonesia and Malaysia,” he added.