INTERVIEW - Egypt-Indonesia ties offer gateway to Africa, ASEAN and beyond: Arsjad Rasjid - Economy

Al-Ahram Weekly

18-05-2025

Arsjad Rasjid, head of Indonesia's Business Council and Chamber of Commerce supervisory board, told Ahram Online that the new strategic partnership between Presidents Prabowo Subianto and Abdel-Fattah El-Sisi opens a fresh chapter in Indonesia-Egypt economic ties.
Ahram Online: During President Prabowo's April visit, relations were elevated to a strategic partnership. What does that mean for the business community?
Arsjad Rasjid: Egypt is indispensable for Africa and the Middle East. It is an important bridge for Indonesia to access markets in these regions and Europe.
For Egypt, Indonesia serves as a bridge to the ASEAN market.
The strategic partnership between Egypt and Indonesia has significant mutual benefits. Regarding human capital, with 15,000 Indonesian students and 3,000 professionals in Egypt, businesses can leverage established networks to better understand local opportunities.
On trade and investment, we see clear priorities emerging in areas such as halal industry development, food security, vocational training, Islamic finance, logistics infrastructure, and interfaith cooperation.
AO: What are the main objectives of your visit and its concrete outcomes?
AR: First, I hope to strengthen dialogue on Islamic economic empowerment, particularly through meaningful engagement with the Minister of Awqaf, Osama Al-Azhari.
Indonesia's experience shows how waqf and community-based mechanisms can help uplift livelihoods and support small-scale enterprises.
During the meeting, we focused on three central pillars: tolerance, peace, and the economic empowerment of the ummah.
First, we affirmed the importance of tolerance and mutual respect. I shared Indonesia's principle of Bhinneka Tunggal Ika — Unity in Diversity — which has guided our nation in harmonizing faith, ethnicity, and identity.
The 5P framework stands for People, Planet, Prosperity, Peace, and Partnership. This initiative is grounded in Indonesia's core values of 'Unity in Diversity' and 'Inclusive Collaboration.'
One of 5P's core missions is advancing tolerance and interfaith harmony.
A key example is the Silaturahmi Tunnel in Jakarta, which connects the Istiqlal Mosque and the Jakarta Cathedral.
5P also protects children's rights, as presented at the World Leaders Summit on Children's Rights.
Second, we discussed the urgency of peace and humanitarian relief and spoke at length about the suffering in Gaza.
Under the 5P framework, faith-based diplomacy is vital to protecting life, restoring dignity, and championing peace where needed most.
Third, we explored concrete ways to advance economic inclusion across the ummah.
I shared Indonesia's experience through my role as Chair of Economic Empowerment and Acoustic Management at the Indonesian Mosque Council (DMI).
Our Rumah Wirausaha Masjid initiative, Mosques as Homes of Entrepreneurs, has empowered over 500 Muslim entrepreneurs, increasing their average revenue by 32 percent.
This shows that fundamental transformation happens when we combine values with practical support.
We believe this model can be replicated in Egypt and beyond.
President Prabowo emphasized that Indonesia aims for eight percent economic growth and 0 percent poverty.
This vision is not just about numbers—it's about dignity.
It's about ensuring that development includes everyone, especially the most vulnerable. Faith-based institutions like the Ministry of Awqaf can be pivotal in achieving that.
AO: How would you describe current trade and investment flows?
AR: Bilateral merchandise trade has risen steadily from $1.51 billion in 2023 to an estimated $1.7 billion in 2024, with Indonesia recording a surplus of about $1 billion.
Our principal exports to Egypt are palm oil (52 percent of the total), coffee, coconut oil, and textiles, while Egypt exports phosphate fertilizer, dates, and chemicals to our market.
Previously, Indonesia had been negotiating an equity stake in a purpose-built warehousing hub inside the Suez Canal Economic Zone (SCZone), an initiative publicly endorsed by Presidents Prabowo and El-Sisi.
AO: From your perspective, which sectors hold the greatest promise for deeper cooperation?
AR: Two important sectors.
First, halal certification alignment.
Egypt has its halal certification authority (IS EG Halal), and Indonesia has BPJPH.
Both systems are credible, but they operate independently, meaning Egyptian halal-certified products still need to undergo additional processes to meet Indonesia's regulations and vice versa.
Egypt and Indonesia can pursue mutual recognition or alignment of their halal certification systems by working together. This would allow Indonesian halal products to enter Egypt more swiftly and vice versa.
Second, fertilizer and food security.
Fertilizers require key minerals like phosphate, which Egypt has in abundance, and organic materials such as palm kernel or coconut derivatives, which are widely available in Indonesia.
By working together to build NPK fertilizer plants (Nitrogen, Phosphorus, Potassium), the two countries can produce affordable, high-quality fertilizers for smallholder farmers.
AO: What obstacles hinder faster growth, and how might they be overcome?
AR: Divergent product standards and double testing for halal and sanitary-phytosanitary rules delay market entry.
We hope to streamline mutual recognition of halal certification to allow Egyptian halal products to enter Indonesia more quickly and vice versa.
High logistics costs are another challenge: most containers still transship via Port Klang or Jeddah, adding eight to ten days.
President Prabowo stated during his visit to Cairo in December 2024 that Indonesia is interested in enhancing trade cooperation with Egypt, particularly in the SCZone.
Discussions have included potential investments in logistics hubs and processing facilities to streamline the distribution of Indonesian products to global markets via Egypt.
AO: Indonesia's industrial sector is moving up the value chain. What should Egyptian partners know?
AR: Indonesia is becoming increasingly open to foreign businesses. It aims to achieve ambitious eight percent economic growth and needs to attract foreign direct investment beyond its traditional partners, extending to new regions such as the Middle East.
Indonesia is developing integrated industrial estates beyond Java — including Central Sulawesi, North Maluku, and Kalimantan — offering competitive land and energy prices, proximity to mineral resources, and labour costs 30–40 percent lower than in capital regions.
This is an opportunity for Egyptian companies to invest in or co-develop value-added production facilities in fertilizers and agriculture, benefiting from Indonesia's scale and strategic export potential.
Indonesia's industrial growth also opens new doors for joint manufacturing and technology transfer. Egyptian industrial exporters, engineers, and investors can participate actively in this expanding ecosystem.
AO: Egypt and Indonesia long-standing members of the Organization of Islamic Cooperation (OIC) and, more recently, BRICS. How does that help business?
AR: Dual membership opens avenues for financing and standard-setting.
Through the BRICS New Development Bank, Indonesian and Egyptian companies can access infrastructure loans in local or third currencies, reducing exchange-rate risk.
BRICS is also piloting a digital cross-border payment system that could settle trade in rupiah and Egyptian pounds. This would ease the balance of payments and limit foreign currency exposure.
Meanwhile, the OIC's halal-product standards forum offers a ready-made platform to harmonize certification, essential for achieving our halal and food-security goals.
AO: Indonesia is a leading player in the Association of Southeast Asian Nations (ASEAN). How can that benefit Egyptian firms?
AR: Indonesia offers Egyptian businesses a unique entry point into ASEAN—one of the world's fastest-growing economic blocs.
ASEAN represents a strategic growth region with a population of over 685 million and a combined GDP of nearly $4 trillion.
Indonesia, accounting for roughly 35 percent of the bloc's GDP, acts as an economic engine and a trusted gateway.
Indonesia's domestic market of 280 million people, including over 230 million Muslims, is at the heart of a $300+ billion halal economy that covers food, cosmetics, Islamic finance, and tourism.
Egyptian firms in halal-certified sectors such as agrifood, pharmaceuticals, and financial products can benefit from cultural alignment and mutual religious trust to access Indonesia and the broader ASEAN halal consumer base.
Moreover, Egyptian firms can go beyond trade by aligning Egypt's strengths in halal manufacturing and infrastructure with Indonesia's scale and regional integration.
They can become co-creators of South-South economic models—building joint ventures and supply chains rooted in shared values across the Muslim world, from West Africa to Southeast Asia.
AO: What are your impressions of Egypt's recent economic reforms and infrastructure drive?
AR: I was genuinely impressed by Egypt's major infrastructure and development efforts, notably the New Administrative Capital.
I was pleased to learn that many government ministries have begun operating from the new capital, demonstrating substantial progress.
Another milestone is the $35 billion Ras El-Hekma agreement, a significant partnership between Egypt and the UAE.
This project aims to transform Egypt's northern coastline into a world-class logistics, tourism, and investment hub with direct access to the Mediterranean Sea.
In parallel, Egypt is upgrading key ports, such as Alexandria and Ain Sokhna, to increase cargo capacity by 50 percent over the next five years.
These improvements will make Egypt more competitive as a trade and shipping gateway.
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