Economy, Business And Markets

Indonesia Eyes Iran Post-Sanctions Market Share

Indonesia Eyes Iran Post-Sanctions Market ShareIndonesia Eyes Iran Post-Sanctions Market Share

In Southeast Asia, Indonesia and Singapore’s ministries of foreign affairs have each published a statement that expressed their positive sentiments toward JCPOA.

Singapore’s statement urged everyone to “fulfill their respective obligations and implement the agreement as soon as possible in good faith and in an expeditious manner”.

Indonesia’s statement praised the deal as a proof of “the effectiveness of solving problems through peaceful means, which is in accordance with Indonesia’s position, which has always prioritized diplomacy and dialogue in solving Iran’s nuclear issue” and requested all relevant parties to “continue constructive approaches in implementing the deal terms”, wrote Global Indonesian Voices.

  What’s in it for Indonesia?

Indonesia will definitely aim for enhanced trade ties with Iran. In May, an Indonesian trade delegation visited Tehran to take part in Iran-Indonesia Economic Commission. During the event, Iranian Minister of Communications Mahmoud Vaezi and Indonesian Coordinating Minister for the Economy Sofyan Djalil signed an MoU which aims to increase trading volume from the current $500 million to $2 billion.

The memorandum covers various fields, such as industry, investment, customs, health, trading, oil, gas, banking, power, petrochemistry, mining, university cooperation, mineral industry, environment, sports, transportation, and naval fields. The lifting of sanctions would provide a huge boost to this plan, leading to increased economic growth in both Iran and Indonesia.

On July 14, Iran finally sealed a deal with the P5+1 group of nations, which comprises the United States, France, Britain, China, Russia and Germany. Iran, after 20 months of patience-testing negotiations, agreed to limit its nuclear energy program in exchange for the world powers lifting economic sanctions against it.

The deal, formally titled the Joint Comprehensive Plan of Action, is a historic milestone.

Less than a week after the agreement, the UN Security Council unanimously gave their backing and passed a resolution that allows the lifting of sanctions. However, the deal would still have to be ratified by the US Congress, in which the Republicans hold a majority.

President Obama has promised that he would veto a Congress refusal, but his veto could then be overridden if Congress can obtain a two-thirds majority vote against ratifying the JCPOA. Fortunately, the required 67% vote are very unlikely, considering the Republicans’ share of 56% in Congress.

US President Barack Obama, together with other world leaders, has hailed both the deal and the UN endorsement. He believes that the resolution shows a “broad international consensus around this issue.” Accolades have also been voiced by Federica Mogherini, high representative of the European Union for foreign affairs and security policy. She said the deal “shows that diplomacy, coordination, cooperation can overcome decades of tensions and confrontations”, and called it “a sign of hope for the entire world”.

Meanwhile, countries have been quick to seek profit from the deal’s effects. Once sanctions are officially lifted, Iran’s 81 million population would become a big, untapped market with lots of potential. German Economy Minister Sigmar Gabriel led an economic delegation to Tehran immediately after the signing. Other nations are expected to follow suit, including Asian countries.

JCPOA has opened a new chapter in relations between Iran and the rest of the world. Dangers are plenty and critics are everywhere. However, there is a reason for optimism that everything would go well. If it does, opportunities would abound for many parties, including Indonesia.