The United Arab Emirates (UAE) is to invest USD10 billion in Indonesia to support the development of strategic sectors, the UAE’s state-owned WAM news agency reported on 23 March. The planned investment comes as the two countries expand defence-industrial ties.
According to the WAM report, UAE will make the new funding available to Indonesia’s sovereign wealth fund – the Indonesia Investment Authority (INA), which was set up in February – in domains that have “potential for growth”.
The report said such areas include infrastructure, ports, and agriculture and other sectors that can “contribute to growth as well as economic and social progress”.
Janes understands that in addition to this funding, the two countries are discussing a potential UAE loan for defence, which would support the Southeast Asian country’s plans to procure materiel.
The Indonesian government is understood to have approached the UAE for the defence procurement funding but is has not yet been approved.
The WAM report made no reference to this potential loan, but it did point to a recently concluded agreement between the governments of UAE and Indonesia to enhance defence-industrial co-operation.
This alliance was announced in early March and is framed around co-operation between Indonesian land systems firm PT Pindad and the UAE firearms specialist Caracal.
Under the agreement, the two companies will co-operate on marketing and producing for Indonesian and UAE armed forces products including Caracal’s 5.56 mm CAR816 assault rifle and PT Pindad’s 5.56 mm SM3 machine gun.
Defence co-operation between the two countries was also the subject of talks in Abu Dhabi in February between UAE defence minister Mohammed Ahmed Al Bowardi and his Indonesian counterpart Prabowo Subianto.
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