Illustration: Handicraftsmen as one of the Micro, Small and Medium Enterprises in Indonesia (Source: JUAN HERBERT GIRSANG, Shutterstock)

The Indonesia Africa Forum (IAF) has served as a strategic platform for Indonesia and African countries to strengthen bilateral relations and cooperation across various fields, particularly in the economy. This forum acts as a bridge to enhance mutual understanding, expand business networks, and stimulate investment.

Africa possesses immense potential in terms of natural resources, rapidly growing markets, and a sizable population. Indonesia, with its extensive experience in development and industry, can serve as a strategic partner for African nations in their development endeavors.

At the IAF 2024, economic transformation stands as a primary focus, alongside other priority sectors such as energy and mining, food security, health, and development cooperation.

In the context of economic transformation cooperation, the objectives are to enhance trade value, stimulate two-way investment, strengthen cooperation in strategic sectors, and expand partnerships in development.

Strengthening Economic Cooperation 

Since the inaugural Indonesia-Africa Forum (IAF) in 2018, significant economic transformations have taken place in Indonesia-Africa relations. Notably, bilateral trade has continued to grow, with key commodities such as palm oil, rubber, and processed food products serving as the mainstays. Beyond trade, investment has also become a crucial pillar in the economic cooperation between the two regions. 

Numerous Indonesian companies have invested in various sectors across Africa, including mining, infrastructure, and agriculture. Similarly, several African companies have shown increasing interest in investing in Indonesia. 

Development partnerships have also been established. Indonesia is actively involved in development programs in various African countries. Technical assistance and technology transfer from Indonesia have contributed to enhancing human capacity in partner countries

Boosting Economies through MSMEs

The High-Level Forum on Multi-Stakeholder Partnerships (HLF MSP) 2024 and Indonesia Africa Forum aim to foster partnerships for economic development and address the polycrisis by strengthening cross-sectoral collaboration to bridge the development financing gap, particularly for Micro, Small, and Medium Enterprises (MSMEs). 

This was highlighted by Bogat Widyatmoko, Deputy for Politics, Law, Defense, and Security at the Ministry of National Development Planning/National Development Planning Agency (Bappenas). "This forum seeks to facilitate all stakeholders in creating innovative solutions and concrete actions, enabling Global South countries to achieve sustainable progress," Bogat stated.

This forum underscores the critical importance of innovation in addressing the financing gap faced by MSMEs in developing countries. One initiative to be discussed is the Global Blended Finance Alliance (GBFA), a collective mechanism designed to provide sustainable and inclusive financing for MSMEs. 

This alternative financing mechanism is crucial for advancing the achievement of the Sustainable Development Goals (SDGs) 2030, boosting inbound and outbound investment, and strengthening microfinance. "This mechanism not only helps MSMEs access finance but also strengthens their involvement in global supply chains, enabling them to contribute more significantly to the national economy," Deputy Bogat added.

A Reliable Development Partner

Indonesia has emerged as a dependable development partner on the international stage, particularly among developing countries, including those in Africa. Over the past decade, Indonesia has implemented approximately 60 programs in the “South-South and Triangular Cooperations (SSTC)” framework involving around 500 participants from various African countries.

These programs cover a wide range of priority sectors, such as agriculture, fisheries and marine resources, health, energy, good governance, MSMEs, infrastructure development, disaster risk management, women empowerment, and trade and investment.

“Indonesia is now increasingly recognized internationally as a reliable development partner for developing countries, a reliable southern provider,” said Siti Nugraha Mauludiah, Director General for Information and Public Diplomacy at the Ministry of Foreign Affairs.

Indonesia's commitment to international development cooperation has become increasingly evident with the establishment of the Indonesian Agency for International Development (LDKPI) or Indonesia AID in 2019. This agency serves as a one-stop shop for the disbursement of development assistance to partner countries.