Indonesia is proposing that South Africa should loosen its foreign trade regulations to intensify their trade ties. Daniel Simanjuntak, director of the Indonesian foreign affairs department, announced the government's plan during a media briefing in Jakarta this week.
South Africa failed to include Indonesia on the list of countries that are offered free visas. Indonesia claims that the tariffs implemented to Indonesian goods imported to South Africa acts as a barrier to a better trade tie between the two countries.
Nigeria is Indonesia's largest African trading partner and South Africa is the second. Simanjuntak compared the trade with Brazil and South Africa. He said that Brazil is further than South Africa. Yet, they have better trade with Brazil. He added that they are not happy yet with trade with South Africa.
He noted that South Africa is the only African State with which Indonesia had a strategic partnership in a sub-Saharan Africa. The director said that the good political relation of the two countries was not translated into a satisfactory trade partnership.
The Indonesia-African Infrastructure Dialogue will be hosted by Indonesia in August 2019. Indonesia plans to attract possible trading partners during the event. The country hopes that the event triggers a strengthened Indonesia-African partnership in the sector of infrastructure.
Simanjuntak said that Indonesia is looking forward to having infrastructure cooperation with South Africa and they are hoping to establish a preferential trade agreement (PTA). He noted the importance of establishing a PTA with the South African Customs Union. South Africa is a member of the union and he said that PTA will boost the trade between the two countries to full potential. The agreement is expected to lessen restrictions and barriers.
The director said the trade with South Africa is the least when compared to partnerships with Brics member states that includes Brazil, Russia, India, and China. According to reports the trade deficit of South Africa with Indonesia is estimated to be around $1.19 billion.
According to Eximbank Chairperson Sinthya Roesly, the country's export-import bank, although she is satisfied with the country's trade with the continent, trade with South Africa needs to be taken up a notch. She added that Eximbank, being one of the parastatals under the country's treasury department, was already capable of facilitating transactions.
The total import from Africa to Indonesia is $36.8 billion and South Africa's import is 10.2 percent of the African import.
