A New Era in Türkiye-Indonesia Cooperation. The collaboration between Türkiye and Indonesia is entering a new phase with economic growth and the strengthening of commercial ties. As one of Southeast Asia’s largest economies, Indonesia stands out with its manufacturing sector and investment opportunities, while Türkiye plays a key role in this partnership with its industrial development and trade expertise. Emerging as a rising star in the halal industry and Islamic economy, Indonesia showcases this potential on a global scale through events like the World Halal Summit. As the trade balance between the two countries strengthens through strategic partnerships, this cooperation promises sustainable economic growth for both sides.
The commercial relations between Türkiye and Indonesia have been progressing positively for decades. Regarding how these relations can be further developed, Indonesia’s Minister of Industry, Agus Gumiwang Kartasasmita, provided exclusive insights to İSTANBUL YEREL:
Indonesia’s Economic Potential
Indonesia, with its 17,508 islands and a land area of 1,904,569 km², is the largest country in Southeast Asia. As of 2024, Indonesia’s population stands at 281,562,465, with the majority adhering to Islam (approximately 84.35%). This made Indonesia, in 2023, the world’s fourth most populous country with around 236 million Muslims and the second-largest Muslim-majority nation.
Indonesia’s economy grew by 4.95% annually in the third quarter of 2024 compared to the same period in 2023 (BPS). In 2023, the economy expanded by 5.05%, ranking eighth globally in terms of real GDP Purchasing Power Parity, a metric comparing productivity and living standards across countries (CIA, World Factbook).
According to World Bank data, Indonesia’s manufacturing sector generated a value added of 255 billion USD throughout 2023, employing approximately 21% of the country’s total workforce and making Indonesia the world’s 12th largest manufacturing nation.
Strong Trade Balance and Strategic Position
Between January and September 2024, Indonesia recorded a trade surplus of 21.95 billion USD, with total exports reaching 192.82 billion USD and imports amounting to 170.86 billion USD.
Over the years, Indonesia has demonstrated significant and stable growth, maintaining a GDP growth rate of around 4-5%. This growth has been driven by various sectors, including manufacturing, agriculture, trade, and services. According to World Bank data, Indonesia’s manufacturing sector contributed 255 billion USD in value added throughout 2023. These developments have positioned Indonesia as the world’s 12th largest manufacturing country. Its strategic location, young population, and expanding middle class also make it a focal point for regional and global economic activities.
Rise in the Islamic Economy
Indonesia is taking significant steps to develop its sharia economy sector. In the 2023/2024 State of the Global Islamic Economy (SGIE) report, Indonesia ranks third on the Global Islamic Economy Indicator Score. This is a notable achievement, as Indonesia moved up one rank from the previous year. As the largest Muslim-majority country, Indonesia believes in the potential of economic cooperation with Islamic nations to boost trade.
New Opportunities with the World Halal Summit
The 2nd World Halal Summit, scheduled to take place in Istanbul from November 27-30, 2025, presents a major opportunity to enhance cooperation among Islamic countries. “First and foremost, I would like to extend our support and congratulations to the organizers of the Islamic Cooperation Organization (OIC) Halal Expo and the 10th World Halal Summit.
We are proud to have participated in this event in 2024, which provides valuable insights and opportunities for cross-sector collaboration. The event held in Istanbul this year serves as a platform not only for countries and companies to showcase their products but also to exchange knowledge, foster partnerships, and further develop standards and innovations in the halal industry.”
The Islamic Cooperation Organization (OIC) Halal Fair and the 10th World Halal Summit, to be held in Istanbul, will have a positive impact on the development of the halal industry. This event will serve as a key platform for showcasing halal products and services. Additionally, with participation from countries and companies worldwide, it will highlight the growing importance and demand for halal-certified products, facilitate new business partnerships, and ultimately drive economic growth, paving the way for valuable connections and collaborations within the halal industry.
Türkiye’s Trade Expertise and Cooperation with Indonesia
Indonesia appreciates Türkiye’s commitment to a greener economy and industrial transformation toward digitalization. Türkiye’s efforts to become a production hub focused on high-value-added, technology-intensive, and export-oriented output, fully utilizing its natural and human resources, are commendable. The Indonesian Ministry of Industry warmly welcomes Türkiye’s proposal for cooperation to support the industrial development of both nations.
Investment Opportunities Offered by Indonesia to Foreign Investors
Between January and September 2024, Indonesia’s investment realization reached 1,261.43 trillion IDR, with Foreign Direct Investment (FDI) accounting for 654.40 trillion IDR, or 51.88% of the total. One contributor to Indonesia’s 5.05% economic growth in 2023 was the non-oil and gas processing industry, which grew by 0.87% during the same period.
Investments amounting to 272.91 trillion IDR between January and September 2024 included sub-sectors such as mineral processing (smelters), forestry (pulp and paper), agriculture (CPO/oleochemicals), oil and gas (petrochemicals), and electric vehicle battery ecosystems.
The Indonesian Ministry of Industry has an Industrial Human Resources Development Agency (BPSDMI) focused on enhancing workforce quality and developing industrial competency infrastructure to meet specific industrial demands.
As of January-September 2024, employment generated from investments reached 1,875,214 people (Indonesian Investment Coordinating Board).
Indonesia offers foreign investors both fiscal and non-fiscal incentives, including Tax Holidays, Tax Allowances, Investment Allowances, Super Deduction Tax for Vocational Training, and Super Deduction Tax for R&D. Additionally, non-fiscal incentives include guarantees of fair treatment for foreign investors and the assurance of no discrimination between foreign and domestic companies.
Indonesia: A Key Market and Cooperation Potential
The chemical and pharmaceutical industries ranked fourth among the top five sub-sectors with the highest foreign direct investment between January and September 2024, contributing 3.22 billion USD. The food sector also ranked fourth among the top five sub-sectors for domestic investment during the same period, contributing 50.46 million IDR (BKPM).
It can be concluded that these industrial sub-sectors, including the food industry and the chemical and pharmaceutical industries, which could extend to cosmetics, are vital to Indonesia’s economic growth. Cooperation with Türkiye in these sub-sectors could enhance technological and innovative exchanges across industries.
Indonesia currently has four Halal Industrial Zones: Modern Halal Cikande in Banten, Safe and Lock in Sidoarjo, East Java, Bintan Inti Halal Hub in the Riau Islands, and Jababeka Industrial Zone in Bekasi, West Java. Plans are underway for eight additional Halal Industrial Zones in regions such as Java, Borneo, Riau Island, Sumatra, and Jakarta, offering Turkish investors opportunities to develop themed zones tailored to specific industrial needs.
Indonesia provides investment opportunities for the development of industrial zones, including Halal Industrial Zones, as themed areas addressing the specific needs and growth of certain industries. Turkish investors may consider investing in these designated zones.
New Horizons in Türkiye-Indonesia Trade
Indonesia’s exports to Türkiye reached 1.45 billion USD between January and September 2024, a 23.55% increase from 1.17 billion USD in the same period of 2023. In contrast, Indonesia’s imports from Türkiye dropped by 34.19% to 310.3 million USD in the same period of 2024, compared to 471.5 million USD in 2023. As a result, Indonesia’s trade surplus with Türkiye grew by 62.20%, reaching 1.14 billion USD between January and September 2024, up from 704.4 million USD in the same period of 2023.
Indonesia’s exports to Türkiye between January and September 2024 (BKPM) were dominated by the processing industry, valued at 1.44 billion USD. Key export products include base metals, coal-based products, refined petroleum products, and food industry products (Pusdatin).
With the growing trade balance between the two countries, there is significant potential for further development. As predominantly Muslim-majority nations, Indonesia and Türkiye can explore partnerships in sectors such as food processing, cosmetics, pharmaceuticals, conservative fashion, and more. This collaboration provides mutual benefits by enabling access to new markets: Indonesia gains entry to halal markets in Europe and the Middle East, while Türkiye accesses Indonesian markets, boosting export and import values in high-potential sectors for both countries. Through strategic partnerships, Indonesia and Türkiye can establish a more integrated and competitive global supply chain, supporting economic growth and meeting the rising demands of international markets.
Conclusion
Türkiye-Indonesia cooperation looks to the future with optimism, driven by steadfast steps in economic growth and commercial relations. This partnership, deepening in areas of shared value such as the halal industry and Islamic economy, opens new horizons in manufacturing and industrial development. Platforms like the World Halal Summit enhance the two countries’ influence in the global halal market, while investment opportunities bring Turkish and Indonesian businesses together. Positive developments in the trade balance indicate that this strategic alliance will support economic growth not only regionally but also globally. Türkiye and Indonesia are poised to secure a stronger position on the international stage through this collaboration.
American News Agency (ANA)