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Pakistan-Indonesia political and economic relations

Pakistan and Indonesia are two friendly, brotherly countries enjoying historical deep rooted, time tested and all weathered friendship. Both countries are knotted with Islamic brotherhood striving for global peace, promoting tolerance, fighting to eliminate terrorism, extremism, intolerance and endeavoring to resolve problems and differences by peaceful means and holding dialogues. Both countries are active members of UNO, and OIC. Both countries relations are built before independence when Quaid-e-Azam Muhammad Ali Jinnah as uncontroversial leader of the Muslims of subcontinent supported the legitimate independent struggle of Indonesians and many Muslims of subcontinent joined the war of Indonesian Independence and laid down their lives for this noble cause. Some of them received the highest military award of Indonesia.

Indonesia is situated between India and Pacific oceans, it is the world’s largest Island country, with more than 70,000 Islands. It is the largest Muslims country in the world in terms of population with 261 million people. It is also world’s 4th most populous country. It has 34 provinces. Its capital is Jakarta, which is most populous country in South East Asia. The country has abundant natural resources like oil and natural gas, tin, copper and gold. Indonesia is a founding member of ASEAN and the East Asia Summit. It has been an active member of UNO since 1950 and was the founder of Organization of Islamic Conference. It is signatory of ASEAN Free Trade Area Agreement, WTO and an occasional member of OPEC.

Indonesia is the largest economy in Southeast Asia and is member of G20 major countries. It is the sixteenth largest economy of the world. Bali island received the best Island award from Travel and Leisure in 2010. According to BBC travel in 2011, Bali is one of the world’s best Island.

ECONOMY
GDP (PPP): $3.032 billion
DDP(official Exchange rate): $ 932.4 billion
GDP Per Capita (PPP): $ 11,700
GDP COMPOSITION BY SECTOR
Agriculture: 13.7 %
Industry: 40.3%
Service: 46%
INDUSTRIES
Petroleum and Natural Gas, Textiles. Automobiles, electronic appliances
Exports: $144,4 billion
Export Commodities: mineral fuel, animal or vegetable fats, palm oil etc
EXPORT PARTNER
Japan 12%, USA 10.8 %, China 10%, Singapore 8.4% and India 7.8%
IMPORT COMMODITIES Mineral fuels, boilers, machinery, iron & steel etc

Pakistan Indonesia Trade volume is expected to reach $2.5 billion. A number of Pakistani parliamentarians, trade delegates and military personnel visited Indonesia recently to further enhance the bilateral relationship. The volume of bilateral trade grew from US$700 million in 2010 to $2.3 billion in 2016, an increase of 299%.

Pakistan’s major exports to Indonesia include textiles and clothing, vegetable and fruits mainly oranges while its major imports items from Indonesia is palm oil. With over $2 billion worth of imports, the balance of trade is in favor of Indonesia while the two countries are trying to strike a balance so that it can become a win-win situation for trading partners.

 

Indonesia imports over $550 million worth of vegetables annually. The recent economic rise of Indonesia was also example for Pakistan to follow, especially because the two countries signed the Preferential Trade Agreement (PTA) on February 3, 2012 which came into effect on September 2013. Under the PTA Indonesia offers market access for 223 tariff lines, of which 103 are zero-rated. Items in the preferential Trade Agreement list include fresh fruits, cotton yarn, cotton fabric, readymade garments, fans, leather goods and other industrial products. Zero-rated market access is offered to Kinnow and oranges from Pakistan providing a level playing field to this product in the Indonesian market.

Pakistan offers to Indonesia under PTA covers 313 tariff lines that include items such as edible oil, sugar confectionery items, coca products, chemicals, kitchenware, rubber, wood, glassware and electronic products.

There is great potential for Pakistani mangoes to be exported to Indonesia besides Pakistan Indonesia Joint Chamber of Commerce and Industry would be helpful to boost trade ties.

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