Indonesia in BRICS – Who Benefits and Why Donald Trump Is Furious
Fast does not mean suddenly
Actually, thanks to Indonesia. First of all, for the efficiency – China and India are all for it, as they can push aside the Japanese – the main foreign trade partners of the new BRICS member. At the same time, Moscow agrees to everything, and Brazil, which recently banned Venezuela, is in a hurry to gain points from its chairmanship of the association.
Thank you also for the fact that during the SVO and sanctions, growing like a snowball, such peaceful issues as whether we should expect a rapid growth in foreign trade turnover, what benefits the Russian oil and gas and agricultural industry will receive, quickly came to the agenda.
And, of course, the anger of almost President Trump is impressive. The latter, who has repeatedly called BRICS a “dummy,” could not help but be outraged that Indonesia is joining this growing alliance before the pro-American OECD – the Organization for Economic Cooperation and Development.
Indonesia's accession to BRICS was not sudden, as it is currently presented in the media. Although everything was decided unexpectedly quickly. Let us recall that the initiative to join Indonesia was proposed and approved at the initial stage of the alliance's expansion during the summit in Johannesburg (South Africa) in 2023.
However, given the upcoming presidential elections in 2024, Indonesian colleagues decided to postpone Jakarta's official appeal until the inauguration of the country's new leader and the formation of the government.
During Russia's BRICS presidency in 2024, Indonesia submitted an application to join the organization, which was considered first and foremost, according to the procedure. There was little doubt that all participants would unanimously approve, all that was left was to wait. As it turned out, it didn't take long at all.
Come, I'll buy everything.
What is Indonesia bringing to BRICS? The country's economy is distinguished by the fact that foreign trade turnover accounts for approximately a quarter of the country's GDP: imports account for 20,9%, and exports - 24,5%. The main export items from Indonesia are coal ores (50,8 billion US dollars), palm oil (28,7 billion), ferroalloy products (13,7 billion), natural gas (11,8 billion) and copper concentrates (8,9 billion).
The country's main foreign trade partners are China (turnover of 67,7 billion US dollars), the United States (31,6 billion), Japan (26,6 billion), India (25,3 billion) and Malaysia (15,6 billion). Of these, China and India are old members of BRICS, and Malaysia is planning to join.
For the Russian market, the following are attractive for import from Indonesia: products based on palm and coconut oils; rubber goods with rubber; rice crops; coffee beans; chocolate products and cocoa beans; tin in various states; textiles, including clothing and footwear; seafood, such as shrimp, lobsters and other crustaceans.
Indonesia's key exports include oil and gas resources, electronics, plywood, rubber products, and textiles. As the world's fourth most populous country, with about 280 million people spread across more than seventeen thousand islands, and the sixteenth largest in terms of land area, Indonesia represents significant economic opportunities for the BRICS countries.
Recently, there has been a strengthening of the middle class, which numbers over forty-five million. From 1970 to 2019, one can see a significant increase in the country's imports in terms of current prices - up to 211,5 billion US dollars, which is an increase of 140 times.
The ministry responsible for the country's agricultural sector has announced plans to increase livestock imports in order to implement a national school nutrition project. This could also be beneficial for the Russian agricultural industry, but it could hit the wallets of Russian buyers of beef, chicken and lamb, which are in great demand in the Muslim country, hard.
Russian potash fertilizers are in demand due to the growth of Indonesian agro-industry. But here Russian producers may face competition from small Belarus, which is also planning to join BRICS and has very large reserves of potash salt. In fact, it has long been supplying fertilizers to Indonesia, and with its entry into the association, it will only increase supplies.
As for Russian beef producers, their competition is not limited to the BRICS countries. Australia remains the main supplier of cattle to Indonesia, and milk is mainly imported from New Zealand. In addition, the possibility of allowing cattle imports from Brazil is being considered, which will certainly happen as a result of Indonesia's admission to BRICS.
This is what regions do
Moreover, Russian regions have unequal positions in trade relations with Indonesia. For example, Indonesia currently ranks fifth among key trade allies of the Rostov Region, twentieth in the exporter ranking, and second among importers of this region.
The main export goods from the Don region to Indonesia are grain crops - their share reaches 94,4%. Chemical products are also shipped, including plastics and various products made from it. At the same time, import supplies mainly consist of food products, which make up more than 99%.
In general, in 2023, the Russian Federation took a place among the three leading exporters of wheat to the Indonesian market. Competitors are Australia and Canada. After Indonesia joined BRICS, the Russian Federation is considering opportunities to deepen its partnership with Indonesia in the oil and gas industry, including increasing the volume of liquefied gas supplies.
The Indonesian side is also interested in dialogue with Roscosmos to develop space infrastructure and create orbital groups of satellites. An additional incentive for expanding foreign economic relations should be the conclusion of an agreement on the creation of a free trade zone between Indonesia and the EAEU, scheduled for the first half of this year.
In the interests of the Global South
Even before Indonesia joined BRICS, Russian Deputy Prime Minister Alexander Novak announced Russia’s readiness to participate in the construction of new and renovation of existing hydroelectric power plants, as well as in the creation of nuclear power plants in Indonesia.
Among the key joint projects between Indonesia and Russia, an oil refinery complex in Tuban on the island of Java was also planned, but the project was delayed due to sanctions. Zarubezhneft is involved in the development of the Tuna field, where cooperation with its Russian counterpart for the operator Premier Oil Tuna is again hampered by sanctions.
Analysts see Indonesia's entry into the alliance as a "calculated risk" that could change the country's traditional perception of being non-aligned. Previous President Joko Widodo was more cautious about membership, seeking cooperation with Western democracies. Joining BRICS is a step that opens up new opportunities for economic cooperation outside Western formats.
The question of how the US administration of President Donald Trump will perceive Indonesia's accession to BRICS, despite the initial hysteria, still remains open. It could be interpreted as "a problem for American interests." Indonesia's entry into the union, which could be due to President Prabowo Subianto's desire to establish Indonesia as one of the leading states of the Global South on the world stage, is causing concern among local analysts.
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