"Our multifaceted ties are dynamically developing"
Extraordinary and Plenipotentiary Ambassador of the Republic of Indonesia in the RF Mohamad Wahid Supriyadi about relashionships betweeen two countries
- Mr. Ambassador, could you lay out any promising avenues for the work of the Russian-Indonesian Joint Commission on Trade, Economic and Technical Cooperation? Both Russia and Indonesia are interested in increasing the exchange of high-tech products in bilateral trade, so the parties set the goal to reach the turnover rate of 5 billion US dollars. What should be done to achieve such an ambitious goal?
- If we look at the background of our trade relations first, Russia is the 12th biggest economics in the world and Indonesia is the 16th. We are both the members of G20. In 2016, the volume of trade between our countries was worth $ 2,6 bln, so we can say that there has been a 32% increase in bilateral trade since the previous year. By the year 2019, the expected turnover rate between our countries will be $ 5 bln, but I think that the actual trade should be worth about $ 10 bln. We appreciate the fact that Russia supports our efforts and determination to expedite our trade relations.
We are looking forward to signing the Free Trade Agreement (FTA) with the Eurasian Economic Union. The relevant proposal has been introduced by our Trade Minister and it is now under consideration. Russia is an important and promising partner of Indonesia; our multifaceted ties are dynamically developing relying on the solid foundation of traditional friendship and mutual trust, so we hope that after the signing of Memorandum of Understanding on Closer Economic Cooperation with Eurasian Economic Comission scheduled at the earlier of 2018, from there we will establish a Joint Study Group and start our negotiation process.
- Are you satisfied with the frequency and content of meetings between Russia and Indonesia both on the official level and in the private sector over the recent years?
- We have a regular annual event in Indonesia, which is called the Trade Expo Indonesia (TEI). It is the biggest event in Indonesia organized by our Trade Ministry. It is always held in October and we can see that the interest is growing and the number of Russian businessmen attending Trade Expo within the last three years was around fifty people. I also need to say that Russia is doing very well in terms of importing our products. Let me remind you about the Festival Indonesia which Indonesian Embassy in Moscow hosts every August within the last three years. This year it was of a great success and it was attended by more than 91,600 people and around 1000 participants from Indonesia (based on data from Russian Embassy in Jakarta). During the Festival, we also held Russia-Indonesia Business Forum which attended by 360 businesspeople both from Russia and Indonesia. The event only seems like cultural, but actually it is a great exposure of our products and business opportunities. For example, last year our import of wheat from Russia increased 300 times, but volume wise it is still insignificant. Previously, we were too much dependent on Australian products.
- Following the recent APEC summit, could you comment on the prospects for creating a free trade zone between the Eurasian Economic Union and ASEAN, Indonesia’s accession to the Eurasian Economic Union (EAEU) and Indonesia’s plans to enhance its cooperation with Russia?
- Indonesia and the EAEU have enter talks on introducing a free trade zone, but the issue requires a detailed, joint examination with EAEU member states. The relevant proposal has been introduced and submitted and it is now being considered. As I have already mentioned, Indonesia has offered to establish a group dedicated to examining the feasibility of a free trade deal. Russia supports Indonesia’s initiative to enter negotiations on the establishment of a free trade zone with the EAEU as well as the idea of extending EAEU contacts by engaging the union in events conducted by Asia-Pacific Economic Cooperation (APEC) member states.
- Russia and Indonesia have established close cooperation in the military-technical area. The countries have been negotiating the supply of a batch of Su-35 modern fighters. Do you think there is a hope for prompt completion of the negotiations? Is Indonesia considering buying any other products of the Russian military industrial sector?
- First, on the military cooperation, we are very close to finalizing the negotiations, our Defense Minister Ryamizard Ryacudu has regular meetings organized by the Russian Ministry of Defense aimed at discussing the ways of strengthening our military technical ties. We have agreed on technology transfers and we discuss opportunities for joint manufacturing. We have plans of procurement eleven Sukhoi-35 aircraft. All the requirements have been fulfilled by both sides, so we need to finalize it.
- Recently, during his visit to Jakarta, Russia’s Foreign Minister, Sergey Lavrov, took part in the presentation of the Russian civil aircraft MC-21. Do you expect that MC-21 and Sukhoi Superjet 100 will be in demand on Indonesia’s market? Is Indonesia planning to buy such Russian civil aircraft as Sukhoi Superjet 100 or MC-21?
- Regarding civilian aircraft, I have to say that it is still undecided on the purchase of Russia's new MC-21 passenger airplane, though the jets could be in great demand in Indonesia. Previously, there was not a very good promotion because there was an accident with Sukhoi Superjet 100 which negatively affected ongoing deliberations. Although, now we are aimed at MC-21, which is a different type of aircraft. It has a bigger capacity compartment than B-737 or A-330 and its technical performance and fuel consumption will compete positively. We are in great need of such medium-haul aircraft.
Actually, aviation serves as a critical means of connecting parts of our country, because of the geographical nature of our country which consists of about 17,000 islands. We have to fly which may be the only option to travel between the islands. Thus, with the population of 260 million people, the demand for medium-haul airplanes like MC-21 is very high and its prospects are very promising. For Indonesia, the demand is very high, but it is more b2b, business to business. We are very happy that Russian Foreign Minister Sergei Lavrov recently came to Jakarta and made a very good presentation. It was very impressive. I think MC-21 can accommodate us best for small distances like one or two-hour flights.
There is great potential, but your country has to promote the project and also to convince our air industry as they still remember the previous accident. Of course, it was due to human error, but it was discouraging at that time. Although, I can provide you with the numbers which inspire optimism here - throughout 2016, the number of domestic flight passengers stood at approximately 80.4 million and as many as about 14.8 million passengers were recorded on international flights. We have developed 286 airports around the country, so our airline industry is something that is quite promising. Of course, Russian producers have to convince our aviation business community, because this is outside of our reach, the government can not influence the business people’s decisions. I have to repeat that it is b2b business.
- In one of your previous interviews, you mentioned that Indonesia is open to investments in the energy sector as the country’s overall strategy for its energy sector emphasizes the maximum use of domestic energy resource. How has Russian-Indonesian cooperation been progressing in this area? Has Rosatom been working or is it planning to work in Indonesia?
- Russia is one of the world's most advanced producers of energy, so there is groundwork for expanding energy cooperation. We hope that Russia can help us realize our ambitious goal to generate an additional 35,000 megawatts (MW) of electricity by 2019 in Indonesia. Many Russian businesspeople are interested in developing coalfields and in the production of ferronickel, manganese dioxide, alumina and so on. With the help of Inter RAO, Russia, construction of a thermal power plant with a capacity of 1.8 GW is planned with the the project investment volume of about $2.8 bln. There has also been some interest from Gazprom. Rosatom is currently working on the construction of the experimental low-power reactor.
As you see, the work is very intensive in the energy sector, though a number of environmental issues need to be seriously considered. Whilst satisfying the demand to increase the role of the energy and mineral sectors to support the national economy, the government will remain committed to protecting the environment through the passing and implementation of appropriate laws and regulations. In May 2016, in Sochi, Russia, during the official negotiations, President Vladimir Putin convinced our President Joko Widodo that our governments should work together and that there is a good potential for expanding our energy cooperation. Russia is interested in investing in our energy sector, so there has been many contributions into developing our energy industry but we also need to do more.
- The Russian company Rosneft and Indonesian state-energy company Pertamina have signed an agreement on cooperation in energy sector. Can you comment on any plans to establish new joint projects in energy industry in order to develop partnership relations between our countries?
- Yes, about two months ago, the Russian company Rosneft and Indonesian state-energy company Pertamina signed a joint venture agreement to finance the construction of a new refining and petrochemical complex Tuban in east Java, worth up to $13bn. Therefore, we can see that the project is moving ahead and the dynamics is very promising.
- Over the past 3 years, the Russian government have introduced and developed lots of target program of social and economic development of the Russian Far East. For instance, they have established the number of new Advanced Special Economic Zones (ASEZ) and have introduced a free taxation regime for the Free Port of Vladivostok. Are there any current business activities or any prospects and opportunities offered by the Russian market that could attract Indonesian business interests?
- Of course, there is some interest. We are trying to bring Indonesian business people closer to their partners in Russia, and especially to the Far East of Russia. In 2015, in cooperation with another half part – House of Russia in Jakarta (HOR Jakarta), House of Indonesia in Russian Far East (HOI) was established in Vladivostok. Mission of HOI is with the real work done to contribute to the development of Russian-Indonesian business-initiatives, turning them into functioning enterprises. On the more global scale, inviting Russian businesspeople to TradeExpo in Indonesia or arranging Indonesian Festivals in Russia have become a good tradition.
For instance, after organizing two Indonesian festivals in Russia, there is now an interest in developing food industry, especially in the area of restaurant business. Especially, this year Indonesian Festival in Russia saw a great success in promoting traditional cuisine. More than 70 small and medium enterprises, restaurants and chain stores participated in the event themed "Visit Wonderful Indonesia: Enjoy Its Diversity" at Moscow Hermitage Garden and I know they are keen on investing in developing restaurant business in Russia. Although, we are still trying to encourage our companies as, to be honest, Russia has an unpleasant image and one of our main aims is to take the opportunity and invite as many business contacts, as possible. For example, during the festival this year, more than one thousand Indonesian artists and businesspeople visited Russia. Most of them, maybe 98%, have never been to Russia. Once they visit Russia, they get completely different image of your country – in the positive way, so we definitely need to encourage our people more!
I am glad that people-to-people contacts have been increasing, especially in the area of tourism. We are proud, for example, that the number of Russian citizens visiting Indonesia has increased by 52 percent last year, the highest number in the world. And also more than 20 thousand Indonesian tourists visited Russia last year, but they went mostly to Saint Petersburg and Moscow. Recently I went to Arbat Street in Moscow with my wife to buy some souvenirs. I was surprised when the stall owners said “apa kabar” (a common greeting in Indonesia meaning “how are things?”). They knew I was Indonesian. Many Indonesians visit Arbat and also some souvenir shops in St. Petersburg.
Our people are very curious and open, but the problem is that they still think of Russia as a communist country with KGB and so on. They still think of Russia as the Soviet Union. Indonesians don’t know that Russia has the largest number of Muslims in Europe. When I tell people that there are more than a million Muslims in Moscow, they get surprised. So, we need to promote such cities as Ufa, Kazan, Astrakhan, etc. with the largest Muslim population in Russia. The potential is in Tatarstan, Bashkortostan, Dagestan, Chechnya, etc. We have to deal with the wrong perception problem and this will help with developing people-to-people relations.
- Do you see any possible ways to solve the problem? For example, citizens of Russia do not require a visa to enter Indonesia for visits of up to 30 days. Although, citizens of Indonesia have to have a visa. In 2016, Indonesia was visited by over 80,000 Russians in comparison with only about 20, 000 visits to Russia from Indonesia. Would the number of tourists from Indonesia to Russia increase if they are allowed visa-free entry to the Russian Federation? Do you think that resuming direct flights between Russia and Indonesia is one of the fastest growing source of new tourists? How would the number of tourists increase in that case?
- We have been discussing quite intensively on the possibility of concluding an agreement on mutual simplification of visa procedures. The number of Russian tourists to Indonesia has increased dramatically and this is mainly because of the visa-free policy that we offer to Russian tourists. We also want to have a reciprocal visa agreement with Russia so that it can be easier for Indonesian tourists to visit Russia. Our countries have initially agreed at the highest level, but of course, we need to sign the core strategic partnership document. We hope it will be signed as soon as possible and it is in the interest of Russia to sign this document and let more Indonesians to come to Russia.
The potential for developing Russian tourist industry is very high as 10 percent of the Indonesian population (which is about 25 million people) is upper middle class. It is not a small number at all. The middle class prefers to travel to Western Europe, Singapore, Malaysia and other popular destinations, but now our people are looking at other countries and Russia is a new destination where they can find something unique and very different from the rest of Europe.
Regarding the resumption of direct flights between Moscow and Jakarta, we expected this already this year, but for some technical reasons it has been postponed. We hope that direct flights between our countries will resume next year. Thus, we will be able to increase the number of passenger to arrive in both countries and, of course, we will significantly reduce the flight duration. Different airlines now offer flights with connections, for example, in Amsterdam that will take at least 9 hours. ШI reckon you will agree with me that it does not inspire much tourist enthusiasm! In addition to all of the above mentioned, the resumption of direct flights between our countries will allow us to export tropical fruits.
- Currently about 400 Indonesian students are learning in Russia in bachelor’s and master’s programs. What priority educational areas or specialties are Indonesian students most interested in? Which specialties are particularly popular? Is there any statistics with respect to the number of Indonesian students going abroad to pursue higher studies? How many of them study the United States, Britain, France, etc? What is the educational setting of first choice for them? Do they prefer Western countries?
- I need to say that high priority is given to the development of educational ties between our two countries. As of now, there are about 450 Indonesian students in Russia. One hundred and sixty scholarships have been provided for Indonesian citizens for this academic year from the Russian budget. Our strategic objectives include the training of highly qualified specialists for the hi-tech sector of the economy: radio electronics, nuclear energy, chemical industries, and the aircraft industry. The level of knowledge that Indonesian students get after graduation from Russian universities is very high. Besides, studying in Russia is much cheaper than in Western countries. It may be one tenth cheaper.
Another area of our international educational activity is cooperation with leading Russian universities to promote Russian studies in Indonesia. We have attracted seven Russian universities, which have agreed to cooperate further on developing different educational activities. In addition to all of the above mentioned, we encourage our regions and cities to have sister province or sister city cooperation in Russia, for example, in Tatarstan and Aceh Province, Bashkortostan and West Java Province. We are working on developing our activities in both Russia and Indonesia and are optimistic about increased cooperation between Russian and Indonesian universities. For example, within the last 20 months, I have visited 16 universities around Russia. Currently there are around 60,000 Indonesians studying overseas, mostly in Australia, US and Western Europe.
- Is there any cooperation with the Far Eastern Federal University (FEFU) in the sphere of education? Are any students from Indonesia studying in FEFU in bachelor’s and master’s programs?
- We are making some steps to connect FEFU and Airlangga University (UNAIR; Indonesian: Universitas Airlangga) which is one of the oldest public university in Indonesia located in Surabaya, East Java. Both universities have agreed to make some efforts addressed at creating student and faculty exchanges, designing internship programs and educational modules in both countries. I would like to say that at present we have 23 students from Indonesia who are in the process of studying. Four year ago, there was none!
- As you have previously mentioned in this interview, the Indonesian Embassy in Moscow hosted the Festival Indonesia in August and it was of a great success. It was attended by 360 representatives of your country. Besides, the day of Indonesian Culture in Kazan 2017 had a great success. Can we hope on the further promotion of the cultural cooperation between our countries in the regions of the Russian Far East?
- Culture plays an important role in bilateral relations. Trade expo exhibitions and Indonesian festivals, where Russian citizens can be introduced to the rich culture and traditions of our country, have become a tradition. We are very happy with the enthusiastic response that we are getting for the Indonesian festival here in Russia. We are also getting a good response for our initiatives from small and medium enterprise and businesspeople who want to open restaurants and mini markets in Russia. We are trying to bring Indonesian business people closer to their partners in Russia, and especially to the Far East of Russia. For example, House of Indonesia in Russian Far East (HOI) contributes to the development of Russian-Indonesian business-initiatives, turning them into functioning enterprises. Last year, we also held the Indonesian cultural day in Vladivostok in cooperation with the Indonesian Students Association.