Diplomatic relations between Belarus and Indonesia will have been formally established 20 years ago, within the next three months. However, the most active contacts began just 4-5 years ago. Since 2009, delegations have been exchanged more regularly and, in 2011, the Belarusian Embassy to Jakarta opened. We share similar views on a number of important issues on the international agenda and co-operate in the United Nations and Non-Aligned Movement. We both support multipolar world order, and speak for each other’s initiatives within the international arena, as well as supporting each other’s candidates on elected bodies of the UN. We enjoy a favourable political background for effective economic co-operation, ever moving forward, although our pace of liaison is yet to meet its full potential.Our mutual turnover was steadily rising until the past year. Sadly, just over $132m was registered last year, compared to $219.2m in 2011. However, the figure stood at just over $60m five years ago, rising to $144.4m in 2008 and to $176.4m in 2010. Fluctuations reflect the large volume of Belarus’ exports of potash fertilisers to Indonesia, as the world market is quite changeable. Clearly, it makes sense to diversify our trade.
The Belarusian Ambassador to Indonesia, Vladimir Lopato-Zagorsky, tells us, “In the traditional format, we’ve been doing well developing bilateral trade. However, we now need to find new forms of co-operation, moving towards joint ventures. We organised a very productive meeting between Belshina’s General Director and the leadership of the largest Indonesian company, to discuss joint production of tyres for passenger cars (based in Belarus) and commercial vehicles (based in Indonesia). In the near future, technicians will exchange visits and we’ll try to move forward as quickly as possible, to take advantage of the huge demand for tyres, with our reliable partners.”
According to the ambassador, a number of joint ventures are in the pipeline and there are opportunities to increase the supply of machinery to Indonesia. He tells us, “The first deliveries of BelAZ products have already been made, but the success of our machinery depends on the market. Initial customer feedback is positive and we’ve seen interest from new partners. I think that we’ll see significant supply volumes.”
There are also good prospects for investment co-operation, as Mr. Lopato-Zagorsky emphasises. He notes that state officials and business circles from Indonesia have been discussing opportunities in this direction, especially regarding the agricultural sector of Belarus. He explains, “We’ve established close contacts with Indonesia’s largest food manufacturing enterprise, which is eager to learn more about milk processing in Belarus and the import of such products onto its market. The Indonesian company is also considering production of pasta products in Belarus.”
The Ambassador Extraordinary and Plenipotentiary of Indonesia to Russia and Belarus, Jauhari Oratmangun, is keen to see trade and investment promoted, asserting, “There are many areas where our two countries could co-operate successfully. Belshina, BelAZ and potash fertiliser producers are already reliable partners of Indonesia.”
Indonesian President Susilo Bambang Yudhoyono met his Belarusian colleague, Alexander Lukashenko, at the Merdeka Palace (the Palace of Independence). Their meeting made clear their political will to develop relations in all mutually beneficial areas. In the morning, the Belarusian delegation and their Indonesian colleagues applied the finishing touches to co-operative agreements. Of course, this was the first official state visit for our two countries since Belarus’ independence. Foreign Affairs Minister Vladimir Makei notes that preparations have been on going for the past two years or more, in readiness for the meeting. Over the past few months, delegations have been exchanged at various levels, in preparation for the presidential level meeting, ensuring that specific business agreements were ‘on the table’; a Belarusian-Indonesian business forum, held before official events at the Merdeka Palace, also helped find various solutions.
Deputy Prime Minister Vladimir Semashko announced various proposals, including BelAZ dump trunks for Indonesia’s steadily growing coal and mineral extraction. The Zhodino plant is ready to supply machinery with 25 to 400 tonne capacity. Of course, our competitors already have a strong presence on the market but our trucks have the significant advantage of consuming 18-20 percent less fuel, notes BelAZ Director General Piotr Parkhomchik. Naturally, this gives them an advantage.
Meanwhile, MAZ cars and buses, city electric transport, tractors and road machinery are attractive to the Indonesian market. Besides simple sales, assembly plants could also be established in Indonesia. Mr. Semashko notes that priority areas of co-operation include manufacturing and processing of food and enterprises making building materials. Belarus welcomes Indonesian investors and is ready to support joint projects with personnel training programmes. Our educational system is known for being at the highest level. Of course, other areas of mutual interest exist.
Mr. Semashko notes that 250,000 tonnes of potash fertilisers are to be supplied to Indonesia this year, with a framework contract concluded for three years. The price is still under discussion, but the volume of sales is estimated to be worth $107m.
In addition, 50 MAZ dump trucks, 20 BelAZ and 20 MTZ tractors are being supplied this year, with contracts signed. Another 500 MAZ dump trucks and 600 MTZ tractors in Belarus are being discussed.The Minister for Agriculture and Food, Leonid Zayats, reveals that substantial volumes of dried milk and whey are also to be supplied to Indonesia, worth up to $150m. Indonesia is interested in Belarusian butter, cheese and other dairy products, so further contracts are likely. Furthermore, a joint meat processing plant in Belarus is under discussion, with a delegation from Indonesia soon to visit Minsk. A number of promising joint projects are possible.
Already, work in South-East Asia has proven efficient, with the recent trip resulting in contracts worth at least $400m. Talking to reporters after his meeting with Susilo Bambang Yudhoyono, President Lukashenko said that he considered it ‘a great step forward’. As turnover stood at just $132.2m last year, the increase is significant. Meanwhile, further trade is likely; the agreements signed so far are just the first steps. Mr. Makei mentions hundreds of millions of Dollars’ worth of contracts as a result of the business forum: twelve contracts, agreements, memoranda, reports and documents were signed during the visit as a whole. Meanwhile, our presidents stress their interest in mutually beneficial co-operation becoming more dynamic.
After a warm greeting from Susilo Bambang Yudhoyono and discussion of future prospects for Belarusian-Indonesian co-operation, Alexander Lukashenko suggested, “I’m sure that if, today, we properly define the terms of growth and lay the basis for a long-term relationship, then the next year or two will see us triple our volume of bilateral trade — as a minimum.” The President is sure that these agreements and contracts are the first step towards achieving this goal, as, “We have tremendous untapped potential for interaction.”
Obviously, this potential needs to be evaluated not only in the context of bilateral relations, but more widely, since Indonesia is one of the most influential countries in the Association of South East Asian Nations (ASEAN). Belarus is a consistent leader in integration processes within the post-Soviet space, so our two countries could help each other gain access to the markets of the ASEAN and the Single Economic Space (in the nearest future the Eurasian Economic Union). The presidents of Belarus and Indonesia have agreed that this vector of interaction is very promising. Moreover, as Mr. Lukashenko noted, our countries are natural partners, having complementary rather than competitive economies.
The heads of state are delighted by the latest contracts and assert that our two countries’ shared position on key international issues is naturally complemented by intensive trade and economic interaction. The Belarusian President concluded, “I’m convinced that, together, we can significantly drive forward our bilateral relations, establishing ties between our two states.”
Indonesia supports this view of future co-operation between our two countries. Susilo Bambang Yudhoyono called Mr. Lukashenko’s visit to his country an historic event, as it opens up new horizons for mutually beneficial co-operation. Mr. Lukashenko has invited his Indonesian colleague to visit Belarus in the near future: an invitation accepted with pleasure by Indonesia’s head of state.
Singapore is a special city-state, seeming designed for such meetings. It’s a real world business hub, where the paths of influential business and political figures cross. It’s a good place for clarifying partnership intentions, as Mr. Lukashenko found on meeting Riyada Group Holding Company President Shaikha Dheya bint Ebrahim Al Khalifa.
Shaikha Dheya bint Ebrahim Al Khalifa has considerable weight in the business world. Forbes magazine last year ranked this charming lady in 77th place among the most influential women in the Arab world. San Capital Investment Company and the Saudi Investment Bank are just two of over three dozen business structures in whose management Shaikha Dheya bint Ebrahim Al Khalifa is involved (their assets stand at $8bn and over $13bn respectively).
Her corporations’ interests are scattered around the world; she does business in the Middle East, North Africa and Western Europe. Speaking to Mr. Lukashenko, she looked at prospects in Belarus, referring to last year’s visit by the Riyada Group to Belarus, when international leasing contracts came under scrutiny. Riyada Group is ready to help Belarus sell its goods abroad under finance terms, providing the appropriate funds. This ‘Islamic Finance’, via Riyada Group, would help MAZ, BelAZ, Amkodor and Belkommunmash sell goods to Persian Gulf countries.
Additionally, the establishment of assembly plants for our passenger vehicles in Oman was discussed, as were joint ventures to produce food products. Belorusneft is also keen to participate in oil and gas projects in the Middle East.
Singapore hosted an official welcome ceremony for the President of Belarus arriving on his state visit, followed by talks with President Tony Tan Keng Yam and Prime Minister Lee Hsien Loong. Mr. Lukashenko’s meeting with the Singapore President indicated that our states share a political desire to develop relations in all areas. Mr. Lukashenko described the meeting as ‘very fruitful’, noting, “We recognise our mutual interest in establishing full-scale relations between our countries and understand that this first high level visit in our history of bilateral relations necessitates the laying of solid foundations for long-term liaisons.”
We value contacts in all spheres, including the exchange of experience; naturally, it’s useful to learn from Singapore. During his meeting with the Prime Minister, Lee Hsien Loong, the President stated, “Over our short time here, we’ve seen your undoubted success in building a modern and prosperous state. I won’t hide the fact that we’re interested in your chosen model of development, as it has allowed you to enjoy impressive and dynamic economic growth and rising living standards within a short period of time.”
Prospects for co-operation are multifaceted and Mr. Lukashenko is convinced that bilateral turnover could be increased tenfold from today’s $26.5m. Our mutual potential far surpasses this figure, asserts the President. He believes that Singapore would be an ideal platform for promoting Belarusian products across South-East Asia, which boasts a huge market. The President assured Lee Hsien Loong, “Many of our largest companies are ready for fruitful and mutually beneficial co-operation with your investors. We’re spending great amounts on their modernisation, transforming our Soviet legacy into high-performance, advanced enterprises. We’re ready to consider all proposals to buy shares in our largest companies, with the only conditions being transparency, economic viability and mutual benefit.”Mr. Lukashenko is convinced that Belarusian investment proposals presented at the Belarusian-Singaporean Business Forum in Singapore will attract interest, especially now that Belarus is forming the Common Economic Space with Russia and Kazakhstan. He emphasises, “This is a huge market: a population of 170 million people and enormous potential for development.”
The President drew attention to the investment attractiveness of the Belarusian-Chinese Industrial Park. Of course, this form of co-operation is no novelty for local businesses; the Park’s prototype is the China-Singapore Suzhou Industrial Park.
Mr. Lukashenko noted, “I’ve tasked the Government with studying the best experience and advanced technologies, to bring back to Belarus. We’re interested in Singapore’s experience in the field of ‘e-government’, in order to improve the efficiency of our state apparatus.”
Interestingly, there is virtually no direct contact between the public and state officials in Singapore, since almost every issue can be resolved online, with documents available for download. This is certainly convenient for businesses and means that bribery is pretty much unheard of. Businessmen may have worked in Singapore for several years without having personally met a single official.
Mr. Lukashenko highlighted the fact that, as a major world financial centre, Singapore could become an attractive location for Belarusian securities: a sphere being worked upon at present. He also emphasised that many more areas of co-operation are possible and that, once in contact, our business circles will undoubtedly find new spheres of co-operation.
President Lukashenko invited Lee Hsien Loong to pay Belarus an official visit, saying, “We’ll be happy to welcome you to Minsk at any time convenient. Belarus is keen to see open, long-term and subjective dialogue on all bilateral issues.”
Mr. Lukashenko also invited President Tony Tan Keng Yam to visit Belarus and stressed his admiration for Singapore’s achievements in all spheres of social and economic development since its independence. He noted, “We like Singapore’s independent course in the international arena. The first Prime Minister of Singapore, Lee Kuan Yew, brought the country out of its ‘third world’ status to become a global leader in a short period of time.”
The President drew attention to the fact that Belarus, like Singapore, has chosen its own path of development, taking into account the interests of the Belarusian people. He added, “We solve difficult economic and social problems with a strong and consistent hand, conducting a peaceful foreign policy.”
Mr. Lukashenko gave his estimation of prospects for co-operation, explaining, “For 20 years, since our establishment of diplomatic relations, certain progress has been seen in co-operation between Belarus and Singapore. However, I’m convinced that we can do far more. This is the first top-level visit in the history of relations between our two countries, allowing us to start dialogue on a wide range of issues of mutual interest. We have laid the foundations for mutually beneficial co-operation in various fields.”
Tony Tan Keng Yam agreed that the visit had been historic and noted his optimism regarding future co-operation, saying, “Looking ahead, I’m sure that there are many means and opportunities for our two countries to build upon the good relations that already exist. We’ll work together for the benefit of our people. This state visit will help greatly in raising awareness of potential for co-operation with Belarus in various fields.”
At the Belarusian-Singaporean Business Forum, representatives of business circles signed several agreements, fulfilling the hopes of the leaders of our two countries. A preliminary agreement was concluded to supply South-East Asian markets through the Singaporean office of the Belarusian Potash Company with 2.5 million tonnes of fertilisers. BPC Director General Valery Ivanov commented, “This is a step forward which, I hope, will drive forward BPC work in this region, allowing us to expand our influence in future.”
No doubt, it’s a significant step forward. Last year, about 2.15 million tonnes were supplied to the region, showing substantial growth and the healthy continuation of constructive political dialogue at the highest level for trade and business.
