THE EU AND INDONESIA

A partnership based on common interests

Indonesia – the seventh largest economy in the world and an established G20 member – is a vital partner for the EU. The close relationship is based on shared values, including democracy, human rights and pluralism, and common interests, such as environmental protection, knowledge exchange and global health. With relations that span over 30 years, the EU and Indonesia have made great progress in reducing inequalities, addressing climate change, and supporting private sector development.

EU – INDONESIA

Partnership
& Cooperation

The EU-Indonesia Partnership and Cooperation Agreement (PCA) that came into force in May 2014, has strengthened and expanded cooperation in a wide range of policy areas, including: trade, investment and connectivity; climate change mitigation and the environment; and governance, human rights and security. A Joint Committee oversees the implementation of the PCA, which meets annually to monitor and evaluate progress of existing partnership programmes and explore future initiatives in different sectors.

Economic
Cooperation

With Indonesia on track to become the world’s fifth largest economy by 2030 and a high-income country by 2050, economic cooperation continues to be a cornerstone of the EU-Indonesia partnership. Negotiations for a Comprehensive Economic Partnership Agreement (CEPA) – which started in 2016 – reflect this. Once concluded, the CEPA will enhance the benefits of increased investment and increased trade in goods and services in a combined market of over 750 million people.

EUROPEAN BUSINESSES

An estimated 1100 European companies present in Indonesia directly employ approximately 1.1 million Indonesians. The European-Indonesia Business Network (EIBN) and European Chamber of Commerce (EuroCham) are EU initiatives that partner with the Indonesian government to improve market access for EU companies in Indonesia and promote favourable foreign investment policies in the country.

EU Indonesia 4.0 | EuroCham

On 6 August 2019, EuroCham launched a study titled Transforming Indonesia’s Economy – Making Indonesia Industry 4.0. The work supports efforts by Indonesia’s government to achieve Industry 4.0, a term used to describe rapid advancement of industry with the help of information technology, and highlights EU Member States’ experiences. The study, which is designed to be a reference for further discussions by policy makers to achieve the goal of Indonesia Industry 4.0, provides tools and recommendations specifically relevant to Indonesia’s four priority sectors – manufacturing, automotive, pharmaceutical, and renewable energy. Data was obtained through surveys, involving not only EuroCham members, but also other stakeholders such as government representatives. Another study highlights how EuroCham contributes to the achievement of the SDGs in Indonesia.

The Government of Indonesia welcomes the positive inputs from Europe to develop regulations related to Industry 4.0. The Ministry of Industry has the same views and therefore these inputs are expected to help the development of policy frameworks.

H.E. Airlangga Hartarto
Minister of Industry,
in his keynote speech
at the study’s launch

EU-INDONESIA BUSINESS NETWORK (EIBN) ACHIEVEMENTS

Poverty Alleviation

In addition to increasing bilateral trade, investment and business opportunities, the EU is working together with government counterparts and civil society to alleviate poverty through sustainable economic development.

Environment and Climate Change

Mitigating the effects of climate change is an urgent priority. This work includes EU-Indonesia cooperation on the implementation of Nationally Determined Contribution (NDC) under the Paris Agreement, and sustainable forest management.

Skills Development and Knowledge Exchange

The EU supports Indonesia in building human capacity. In addition to skills development and knowledge exchange in government and civil society, EU cooperation supports higher education and the mobility of students and researchers through Erasmus+, the EU programme for education, training and youth, and the EU Research Framework Programmes, including Horizon 2020.

Sustainable Development

In pursuit of the SDGs, the EU is supporting Indonesia through thematic and regional development cooperation programmes that continue to advance green growth, climate change mitigation and human rights development, as well as capacity building and knowledge exchange in a wide range of areas.

Multilateralism, Peace and Security

The EU and Indonesia have a shared commitment to multilateralism and cooperation in international fora, including the G20, ASEAN, and the United Nations. The EU and Indonesia also cooperate on security matters through the ASEAN Regional Forum (ARF), addressing issues such as maritime security, counter-terrorism and transnational crime. As the host of the ASEAN Secretariat, Indonesia also serves as a hub for the region’s emerging political, security and economic architecture, supporting regional integration and region-to-region relations.

Disaster Preparedness and Response

Through its European Civil Protection and Humanitarian Aid Operations (ECHO), the European Union helps over 120 million victims of conflicts and disasters every year. For instance, the EU has assisted Indonesia in the aftermath of the natural disasters which struck in Lombock, Sulawesi and the Sunda Strait in 2018, and recently provided humanitarian aid to assist communities affected by the coronavirus pandemic, flooding in Kalimantan, as well as to Rohingya migrants.