02/08/2024
Indonesia’s economy grew by 5.11 percent in the Q1'24 | Opportunities for NZ to partner with Indonesia
Bilateral Trade update
In the year ending March 2024, two-way trade with Indonesia totalled $2.99 billion. Indonesia is New Zealand’s 9th largest export market and is our 11th largest trading partner by total trade value. Total exports to Indonesia were worth $1.62 billion, a decrease of 22.1% when compared to exports of $2.08 billion in the same period in 2023.
In the education sector, there were a total of 795 international student enrolments from Indonesia in the year ending June 2023. Of the 795 students, 570 (71.7 percent) were enrolled in universities, 101 (12.7 percent) were enrolled in private training establishments, and 85 (10.7 percent) were enrolled in the New Zealand Institute of Skills and Technology.
Potential economic impact of President-elect Prabowo’s free nutritious meal programme
The government has budgeted IDR 71 trillion (NZ$ 7.1 billion) for the implementation of President-elect Prabowo’s free nutritious meal programme in the 2025 Draft State Budget. In the programme, at least 83 million school children will be supported. This will require more than 6 million tonnes of rice, 1 million tonnes of chicken meat, and 4 million kiloliters of fresh cow's milk every year. The budget was set at IDR 15,000 (NZ$ 1.50) per portion, although the final cost has yet to be confirmed. On multiple occasions, Vice President-elect Gibran Rakabuming, has given out free milk to the public, showcasing the incoming government’s commitment in the programme.
Some economists commented that the programme will increase the domestic consumption rate and has the potential to stimulate economic growth and raise Indonesia’s GDP, whilst others noted that the programme could undermine Indonesia’s track record of fiscal discipline.
Positive example of foreign direct investment flowing into Indonesia aimed at increasing milk consumption in Indonesia was the opening of PT Frisian Flag Indonesia’s (PT FFI) third factory in Cikarang, West Jawa in July 2024. The factory, which covers an area of 25.4 hectares with an investment value of IDR 3.8 trillion (NZ$ 380 million), is said to be the largest production investment in the world for Dutch dairy cooperative and parent company of PT FFI, Friesland Campina. The new plant will process 400,000 kgs of milk per day or 700 million kgs of dairy products per year, with the potential to grow to 1 billion kgs. The products produced in the factory are milk and condensed milk.
PT FFI will also take part in a free nutritious food pilot project (Kick Off Collaboration Programme) in August 2024. PT FFI is collaborating with the Indonesia Food Security Review Foundation (IFSR) to reach ten schools in Cikarang, benefitting more than 2000 students every day until December 2024. PT FFI will contribute to the distribution of fresh milk, which is one of the supporting components in the President-elect Prabowo’s free nutritious meal programme.....
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New Zealand Ministry of Foreign Affairs and Trade