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Indonesia and the UAE Draw Closer Together. Is There a Strategy to This?

In recent times, Indonesia and the United Arab Emirates have intensified their cooperation, which is natural: the UAE is an investor and developer country, while Indonesia offers immense investment opportunities. But there is a subtle geopolitical strategy behind this growing rapport.

By Harishmawan Heryadi

Some time ago, the public was surprised by the change in the name of the Jakarta-Cikampek II Toll Road to Sheikh Mohamed bin Zayed (MBZ) Flyover. To many Indonesians this was unusual: the name of a foreign figure being immortalized as a street name in the country.

The government has good reason for taking this action. The naming of an Indonesian city street after the crown prince of the United Arab Emirates was a significant gesture of friendship. This was, of course, in reciprocation for the UAE’s naming a street in Abu Dhabi after President Joko Widodo, which was also a major gesture of friendship.

These are just some of the signs that the relationship between Indonesia and the UAE has grown closer in recent times. In Indonesia, there are now many important projects involving this Middle Eastern country. 

That certainly makes sense. Building diplomatic and economic relations can be mutually advantageous. The UAE could be an important source of investment in Indonesia. 

Apart from that, is there anything else behind the growth of the relationship between Indonesia and the UAE in recent times? 

UAE-Indonesia Cooperation

Not long after the name of the UAE crown prince was adopted as a street name in Jakarta, news broke that the UAE would build a COVID-19 vaccine factory in Indonesia.

Before that, there was already a lot of cooperation between Indonesia and the UAE. In March, the UAE committed itself to investing in Indonesia’s Sovereign Wealth Fund (SWF). The commitment value is US$ 10 billion, the largest among all investing countries. SWF UAE itself was appointed as advisor to SWF Indonesia.

There is also a project to build the Grand Sheikh Zayed Mosque in Solo. This mosque would be built with a grant from the UAE worth US$ 20 million or the equivalent of IDR 300 billion. The mosque will have a capacity for 10,000 people and will be billed as a monument of friendship between Solo, Indonesia and the UAE.

Earlier, the UAE signed 16 cooperation agreements with an aggregate worth of Rp314 trillion with the Indonesian government. This cooperation covers sectors such as religion, education, agriculture, health, research, and oil and gas.

Particularly remarkable is the UAE’s involvement in the project to establish a new capital city for Indonesia. The oil-rich country has announced its commitment to invest in the new capital city.

Not only that, in this project, the Sheikh Mohamed bin Zayed (MBZ) was made chairman of the steering committee for the development of the State Capital City (IKN). The prince has been credited with the development of the city ​​of Abu Dhabi in his home country.

All these are evidence of how the UAE and Indonesia have drawn closer to each other. Although in fact, they have been building that relationship since 1976, the relationship has never been as intense as it is now. 

The Rise of the UAE

The UAE, a petrodollar country, can indeed be considered a country that has great potential as an investor. Moreover, in recent years, the UAE is arguably one of the most strategic countries in the Middle East. After the Arab Spring in 2011, the country has been regarded as beginning to have dominance in the Middle East. 

Under the control of the crown prince MBZ, the UAE embarked on projects in a variety of sector including education, science, technology, and finance.

Domestically, the UAE gradually transformed into a destination country for urbanization both regionally and globally. This makes their position more strategic, as the UAE can become a hub or gateway to neighboring countries. 

In terms of infrastructure, the UAE is also doing very well. According to Gallup, the public in the country considers infrastructure such as roads and public transportation satisfactory. The same thing seems to be true for urban planning, where the people there are also satisfied living in urban areas. 

On the financial side, in the eyes of many observers the UAE is also one of the world’s financial centers. In a survey conducted by Duff & Phelps, the UAE has joined the ranks of the world’s financial centers along with New York, London, Singapore, Luxembourg, and Hong Kong.

Of course, this is in addition to the oil wealth that the UAE naturally has, which can make the country’s financial and investment potentials quite promising. 

Based on these realities, it is quite natural for Indonesia to build a close relationship with the UAE. Its ability to transform, build infrastructure, and invest can be a valuable help to Indonesia’s domestic development. 

MBZ and the US

It can be said that the emergence of the UAE as a power in the Middle East was the handiwork of MBZ. The New York Times even mentions that the crown prince is the strongest man in the Arab region.

How could he have become the strongest person in the region?

Of course, this could be related to various internal strengths of their own. Apart from that, it is also important to see how the UAE under MBZ, who is often regarded as the de facto leader, builds relationships with various external powers. 

In recent times, the UAE has been quite diligent in building and strengthening relations with both neighboring countries and the r major powers, notably the United States. 

In an article published by the New York Times, MBZ has long been regarded as a key ally of the US. Several diplomats quoted in the article said that the US considers the prince a good friend in the region, who can be relied on to reduce Iranian influence. 

Apart from the matter of expertise in building infrastructure and investment capabilities, there may be other things that draw Indonesia under Jokowi even closer to the UAE under MBZ.

In the recent past, Indonesia has tended to be seen as building close ties with China. This is especially true on matters of infrastructure development. 

With the new intimacy with the UAE, Indonesia could temper the impression that it is too oriented towards Beijing. There could be an impression that the UAE is emerging as another country that has intense relations with Indonesia as well.

Apart from that, concerning the relationship between the UAE-MBZ and the US, the intimate relationship between Indonesia and the UAE can also imply that Indonesia is also still trying to strengthen relations with the US. This is especially so in the context of the US-China rivalry. 

By intensifying Indonesia’s relations with the UAE, Jokowi could be building some kind of balance of power.

Kenneth Waltz has a theory that supports this strategy. He said that the state could balance its external relations by building relationships to maintain its security. 

With this balance, Indonesia could save itself from threats when two world powers come into conflict. Because it does not lean to one side, it is possible that Indonesia does not have to suffer losses due to the policies of one of the conflicting parties. Not only that, Indonesia can also enjoy economic benefits from both of them with steps like this. 

Don’t be surprised if in the future Indonesia and the UAE will draw even closer to each other than they are today.

Editor’s note: The views expressed in this article are the author’s and do not necessarily reflect the views of PinterPolitik.

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