Boosting Indonesia’s national competitiveness

Last week, I signed a 35-year strategic partnership with Dr. Alim Markus, Chairman and CEO of Maspion Group, for a US$1.2 billion container port and industrial logistics park in East Java.

The joint venture is the first of its kind for Indonesia’s transportation sector, combining the strengths and expertise of DP World as an FDI partner with a private sector Indonesian company.

The expanded logistics capability will increase container capacity up to 3 million TEUs while creating a world-class industrial and logistics park for domestic and international businesses, generating direct and secondary quality jobs in the process.

I am particularly excited by the partnership as a catalyst for Indonesia’s already tremendous economic growth and impressive position in the world trade economy.

Relatively balanced import and export flows distinguish Indonesia from some of its neighbours, complemented by a strong manufacturing output across electricals, chemicals, textiles, and rubber derivatives on top of its already strong commodity wealth.

And as one of the world’s fastest growing e-commerce markets, with a population of 240 million fuelling one of the world’s top 20 GDPs, Indonesia is right to enhance the supply chains and infrastructures that will facilitate its rapid growth.

This applies to its trade flows with the world and closer to home. A new industrial logistics park in East Java will boost its strategic position as a gateway to Indonesia itself, a substantial economic opportunity in its own right, including its inland routes across Java and between its network of archipelagos.

At the same time, the park will increase Indonesia’s intra-regional trading capability as it and other markets across the South East continue to strengthen their economic positions and seek new opportunities to trade among each other.

Trade between emerging markets in the Global South is expected to rise from 25% of global trade today to 30% in 2030. And while the impact of a Biden administration on world trade flows is too soon to define, I have no doubt that Indonesia will benefit increasingly from the shift in supply chain configurations that we are seeing across South-East Asia, away from the US-China dominated corridor.

Indonesia is poised to strengthen its already solid footing, and I have been energised to see President Joko Widodo harness the country’s growth by making the most of the trends shaping its position in the post-COVID trade economy. From his Golden Generation 2045 Strategy to Indonesia’s Global Maritime Fulcrum, our investment is fully aligned with his ambitions for the country. An infrastructure-led approach to boosting national competitiveness, supporting maritime development, and creating new higher-wage jobs across Indonesia’s geographies.

The investment we have committed to is just one part of a close, long-term partnership between Indonesia and the UAE.

Last month, we welcomed Indonesia as the first South-East Asian nation to join the World Logistics Passport, a Dubai-led trade initiative designed to booth South-South trade. The WLP now counts the Indonesia National Shippers’ Council as a partner, which will unlock new efficiencies when navigating the local market.

The joint venture with Maspion Group strengthens our already fruitful partnership with Indonesia, and I look to breaking ground on the container terminal later this year.