Newsmakers / November 2017

Strengthening Relations Between Qatar and Indonesia

By GlobeAsia

Qatar’s Emir Sheikh Tamim bin Hamad al-Thani visited Indonesia in October to strengthen the relationship between Qatar and Indonesia, which dates back 41 years to when the two countries first established diplomatic relations.

It was a reciprocal visit by the Emir after President Joko Widodo visited Qatar in September 2015. The Emir brought with him an entourage of 43 which included businessmen from various sectors including energy, trade and investment. A business forum was held for the Qatar delegation and 150 Indonesian businessmen took part to discuss business agreements.

During their one-on-one meeting at the Bogor Palace, the Emir and Jokowi discussed various issues including humanitarian assistance and investment. Jokowi also invited Qatari businessmen to increase their investment in Indonesia, looking at new avenues for business in addition to expanding their existing projects.

“Indonesia will continue to invite Qatar to invest and increase cooperation in ongoing projects, including Nebras Power investment in Paiton Energy,” Jokowi said. Qatar’s state-owned company Nebras Power through its subsidiary Netherland BV in February acquired a 35% stake valued at $1.3 billion in Paiton Energy Indonesia.

Indonesia’s top executives expect Nebras Power to expand its cooperation with energy company Pembangkit Jawa Bali (PJB) in a $1 billion worth 2x250 MW power plant development project in North Sumatra.

“We also talked about the need to find a solution to the Rohingya crisis,” the 34-year-old Emir said, adding that Indonesia is a very important country in the Islamic world. “Qatar will provide humanitarian aid and will ask the government of Myanmar to solve this issue properly,” he told a joint press conference after the two leaders’ meeting at the Bogor Palace.

Trade declining

“Indonesia and Qatar have to expand and diversify bilateral trade, which includes products and non-traditional services as well as investments,” Enggartiasto Lukita, Indonesia’s trade minister, said at the business forum.

Qatar’s Economy and Commerce Minister Sheikh Ahmed bin Jassim bin Mohammad Al Thani said in his opening remarks at the forum that Qatar has become “stronger and more independent” since Saudi Arabia and three other Arab states imposed a blockade on the country in June. Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and trade links with Qatar on June 5, accusing the Gulf state of financing terrorist networks.

The accusations were promptly denied by Qatar, which described the measures as “unjustified” and “illegal.”

The severance of diplomatic ties resulted in travel restrictions, suspensions of flights to and from Qatar as well as the closure of transportation links.


“Indonesia and Qatar have to expand and diversify bilateral trade, which includes products and non-traditional services as well as investments.”

-- Enggartiasto Lukita, Trade minister


Minister Al Thani said the blockade has not negatively impacted business in Qatar.

According to the Indonesian Chamber of Commerce and Industry (Kadin), the blockade instead has opened new opportunities for companies from Indonesia to forge closer ties with their Qatari counterparts.

As Qatar gears up its infrastructure projects in preparation for the 2022 World Cup, Indonesia could potentially increase exports of various commodities, including construction materials such as cement and steel.

Al Thani said Qatar has opened new and alternative routes to deal with the unprecedented situation caused by the blockade against his country and that the private sector plays an active role in this.

Bilateral trade between both countries, however, shows a declining trend. According to the Trade Ministry, exports to Qatar in 2012-2016 declined by 9% and imports fell by 17.7%. Exports to Qatar totaled $57.6 million last year, a 40% drop compared to $96.5 million in 2015, while imports from the Gulf country increased by 17% to $857.6 million last year.

Enggar said Indonesia can benefit from expanding bilateral trade to Qatar — which is a non-traditional market for the archipelago — on the back of new infrastructure in both countries. As Indonesia pushes forward with its sea-toll program, Qatar has launched a new port in Doha, the country’s capital.

Pelindo II, a state-owned port operator, signed a memorandum of understanding with Qatar Ports Management Company at the forum. Both parties agreed to strengthen communication and cooperation in investment and promotion.

Kadin also signed the first memorandum of understanding with its Qatari counterpart, promising to maintain a relationship between the business chambers.

“This is the right time for investment but we have to find the right opportunity,” Hamad Al-Mulla, Katara Hospitality chief executive, said at a panel. Erwin Aksa, the vice chairman of Kadin, said the crisis in the Gulf can be an opportunity for Indonesian businesses to start cooperation with their counterparts in Qatar.