Under the Radar: Indonesia’s Relations with Algeria

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Under the Radar: Indonesia’s Relations with Algeria

Indonesia-Algeria ties have a long history, and today center on economics and counter-extremism.

Under the Radar: Indonesia’s Relations with Algeria
Credit: Wikimedia Commons/ Midori

Indonesia’s relations with North African countries typically receive little attention. The topic only made a appearance in the news early this year, when Zulfikli Hasan, chairman of Indonesia’s People’s Consultative Assembly (MPR), met with the current Algerian ambassador to Indonesia, Abdelkader Aziria, and called on the two countries to strengthen their partnership.

In point of fact, ties between Indonesia and Algeria have been developing, though under the radar, for many years. In the early years, the relationship was influenced by the two countries’ shared status as Muslim-majority countries and their staunch support for anti-colonial struggles around the world. In recent years, however, their ties seem to be driven by economic and security benefits.

As a country that inspired Algeria to gain independence in 1962, Indonesia occupies a special place in Algeria’s foreign policy. Before Algeria attaining formal independence from France, Indonesia was among a handful of nations to have recognized Algeria, inviting an Algerian delegation to attend the Bandung Conference in 1956. During the 50th anniversary of Algerian independence in 2013, the then-Algerian ambassador to Indonesia, Abdelkrim Belarbi, thanked Indonesia for its vocal support for Algerian independence.

Present-day political ties between Indonesia and Algeria are facilitated by the presence of long-standing diplomatic missions in the two countries, and strengthened by frequent high-level bilateral exchanges and meetings between senior officials and MPs, as well as the two states’ shared participation in several multilateral mechanisms such as the Non-Aligned Movement, Group of 77, and Organization of Islamic Cooperation. Even though separated by thousands of kilometers, Jakarta and Algiers share similar stances on some regional issues, such as Libya, Palestine, and the Western Sahara. In addition, Indonesia also supported Algeria’s entry into the World Trade Organization.

Undeniably, energy is a major component defining Indonesia’s relations with Algeria. In 2012, for example, PT Pertamina, Indonesia’s state oil company, inked an MoU with Algerian national oil company Sonatrach to strengthen cooperation and exchange of expertise and knowledge in various segments of the hydrocarbon chain.

Meanwhile, in 2016, PT Pertamina began the development of the Phase 4 Project in its block in Algeria, which the Indonesian company purchased from ConocoPhillips in 2013. The Algerian oil and gas authority Alnaft has allowed PT Pertamina to increase its production to 54,300 barrels of oil equivalent per day (boepd), higher than the 39,000 boepd permitted a year earlier. To take advance of the increase, in January 2016, PT Pertamina Drilling Services Indonesia (PDSI), a subsidiary of PT Pertamina, initiated a tender to ship a rig to Algeria to be used by PT Pertamina to explore its fields.

Other deals were inked in July 2016 between Algeria and Indonesia’s Indorama Corporation to construct a phosphate mine and develop two factories to process the crop nutrient in Algeria at a total expected cost of $4.5 billion. Part of the deal was a joint venture between Indorama and Algeria’s Manal to develop a new phosphate mine in Algeria’s eastern province of Tebessa. Indorama and Manal would also join another Algerian company, Asmidal, to construct a phosphate processing plant in Souk Ahras, close to the Tunisian border, to produce phosphoric acid and diammonium phosphate.

In the same year, an MoU was signed by Indonesia and Algeria on the industrial sector. It is reported that the agreement covers the development of bilateral relations in a number of strategic industrial sectors, including mining, textiles, machinery, foods, petrochemicals, and fertilizers. A bilateral working group was also planned to be set up for the implementation.

Economic ties between Jakarta and Algiers have also increased in the past years, not only due to the natural complementarities between the two countries influenced by the growth of the Indonesian economy, but also due to changes in the global and regional environment. Ongoing instability in the Middle East and the continuous U.S. intervention in the region has encouraged an “eastward” transformation in the foreign policy of many North African countries, including Algeria.

At present, Algeria is Indonesia’s fourth largest trading partner in the African continent, following Egypt, Nigeria, and South Africa. By 2015, it was reported that trade between the two reached $555.95 million, or around 6 percent of Indonesia’s total trade with Africa. While Algeria mainly exports crude oil, Indonesia’s primary exports are food stuffs such as wood, sugar, dried fish, textile fiber, coffee, and palm oil.

Seeing Indonesia’s economy growing exponentially, the Algerian government also plans to establish a Joint Commission to strengthen ties with Jakarta. The two governments have also signed a number of MoUs, including on Double Taxation Avoidance and fisheries cooperation.

Besides economics, religious and cultural dimensions contribute to Indonesia’s significance in Algeria’s eyes. Determined to confront the extremism that has long been entrenched within its borders, Algeria sees Indonesia as having a crucial role to play in promoting the moderate teaching of Islam. This was clearly showcased by the  agreement signed between the two countries to foster ties in religious cooperation to help tackle radicalism and promote moderate Islamic teaching. As a follow-up, the two countries have also drafted a number of related programs to be implemented, even though the details have not been revealed to the public. The cooperation includes cleric exchanges and the dissemination of what they define as moderate Islamic values.

Due to this religious deal, education ties between the two countries can also be expected to take place soon. Algeria has plans to provide scholarships for Indonesian students to study at the Imam Institute, which is run by Algeria’s Religious Affairs and Wakfs Ministry. In July 2016, Jakarta and Algiers signed an MoU for cooperation in high education and scientific research. The agreement includes the extension of scholarships, exchange of lecturers, joint research, and publications.

Under the agreement, tourism cooperation is also planned, particularly religious tourism. In recent years, the government in Algiers has devoted a large amount of resources to improve the management and maintenance of Islamic historical sites. Therefore, Algeria hopes that it can attract more tourists from Indonesia.

These economic, political, and cultural developments have come to shape the course of the Indonesia-Algeria relationship, and have fed into optimistic readings about its future trajectory. Given its status as Southeast Asia’s largest economy, Indonesia could position itself as a potential target for Algerian exports and investments. While its surrounding countries in the region continue to encounter turmoil and instability, Algeria will continue to upheld its “eastward” foreign policy and moving toward ASEAN would be a logical move. In this respect, Indonesia could serve as an important hub for the North African country to expand economically into wider Southeast Asia.

Meanwhile, Indonesia is currently looking ways to diversify its export market. Therefore, Algeria, as Africa’s third largest economy and with a population of around 34 million, is viewed as a lucrative market for its goods and exports. At the same time, it could provide Jakarta a bridge for economic expansion in the wider Middle East/North Africa region.

What could strengthen Algeria-Indonesia relations even further are their shared perceptions and visions in the face of growing threats from extremism. The two nations are likely to continue exerting united efforts to minimize the potential threats of extremism and to spread the moderate teaching of Islam.

There are, however, a number of challenges and obstacles that stand in the way, including the absence of direct air routes, fluctuating exchange rates, unfamiliarity about the other country among the two business communities, as well as some cultural limitations mainly caused by the lack of a common language.

Still, it is reasonable to predict that Indonesia-Algeria relations will continue to grow as the two countries see complementary benefits from their economic ties, and face the challenge of safeguarding their nations from Islamic extremisim.

Muhammad Zulfikar Rakhmat is a Ph.D. researcher at the University of Manchester. His main area of research is China/ASEAN-Middle East relations.