Trade talks between Indonesia and Sri Lanka will continue soon

Negotiations on the Indonesia-Sri Lanka Preferential Trade Agreement (ISL-PTA) will start soon as the two countries see the huge potential to boost bilateral trade, the Ambassador of the Republic of Indonesia said, Dewi Gustina Tobing on the sidelines of a bilateral business forum organized by the Sri Lanka National Chamber of Commerce in Colombo last week.

Referring to a timeline, Tobing said talks on the PTA are expected to start this year as both countries have shown great enthusiasm for the trade deal.

“The PTA is vital for both countries to enhance cooperation, especially in economic sectors, including trade and industry,” the Ambassador said.

Trade between Sri Lanka and Indonesia has been in favor of Indonesia with the value of trade between the two countries being around USD 473 million in 2021. Exports from Sri Lanka were around USD 53 million while that imports from Indonesia were USD 420 million. Indonesia was Sri Lanka’s ninth largest export destination in the same year, with fabrics accounting for around 26.4% of total exports to the East Asian nation.

Indonesia will explore future cooperation not only on trade but also on partnerships and joint ventures by investing in Sri Lanka. Fertilizer is a major area where we could consider investing in Sri Lanka while strengthening collaborations in the industrial sector, the ambassador said, adding that Indonesia, as in the past, will continue to support Sri Lanka. , especially during the current difficult times to overcome the economic crisis. crisis.

In a meeting with former Prime Minister Mahinda Rajapaksa, Ambassador Tobing conveyed Indonesia’s interest in sharing its expertise to boost Sri Lanka’s agricultural sector, especially vegetable oil plantations .

Indonesia provided pharmaceutical aid worth $1.6 million to Sri Lanka in March this year.

“We care about the people of Sri Lanka and we will consider not just short term but long term help for the country,” Ambassador Tobing said. Indonesia’s economy is the largest in Southeast Asia and is one of the emerging market economies.

As a middle-income country and a member of the G20, Indonesia is classified as a newly industrialized country.

It is the 17th largest economy in the world by nominal GDP and the 7th by GDP (PPP). Estimated at US$40 billion in 2019, Indonesia’s internet economy is expected to cross the US$150 billion mark by 2025. Indonesia depends on the domestic market and government budget spending and ownership public enterprises (the central government owns 141 enterprises). The administration of prices for a range of basic commodities (including rice and electricity) also plays an important role in the Indonesian market economy.

In the aftermath of the 1997 Asian financial crisis, the government took custody of a significant portion of private sector assets through the acquisition of non-performing bank loans and corporate assets through the restructuring process of the debt and custodial companies were sold for privatization several years later. . Since 1999, the economy has recovered. Growth has accelerated to more than 4-6% in recent years.

In 2012, Indonesia replaced India as the second fastest growing G-20 economy, behind China. Since then, the annual growth rate has fluctuated around 5%.

However, Indonesia faced a recession in 2020 when economic growth slumped to -2.07% due to the Covid-19 pandemic. This is the worst growth since the 1997 crisis.

In 2021, gross domestic product grew by 3.69%, due to the removal of COVID-19 restrictions as well as record exports driven by rising commodity prices.

Indonesia is expected to be the fourth largest economy in the world by 2045.

Joko Widodo said his cabinet’s calculations showed that by 2045 Indonesia will have a population of 309 million. According to Widodo’s estimate, there would be 5-6% economic growth and a GDP of US$9.1 trillion. Indonesia’s per capita income is expected to reach US$29,000.

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