Is Indonesia Russia's Competitor in Energy in Southeast Asia?

4 october 2017

Indonesia's economy, and especially the country's ability to export energy resources, became the central topic of the new bulletin on the current trends in the global economy, prepared by Analytical Center experts.

Indonesia is the most densely populated country in Southeast Asia (262 million inhabitants); and its socioeconomic indicators are close to those of the BRICS countries. This is a rapidly growing country; and by 2030, it may overhaul Russia, Brazil and Germany in GDP (PPP), if these countries fail to accelerate their growth. This is PWC's forecast.

Indonesia exports large volume of coal and gas as well as crude oil to China, Japan, the Republic of Korea and other countries, which is an important trade factor in East and Southeast Asia. Over the last years, fluctuations of world energy carrier prices became a serious shock for Indonesia and had a noticeable impact on the macroeconomic and social aspects of development. But the country has demonstrated noticeable resilience to external shocks. In 2010-2016, real GDP in Indonesia was growing by an average of 5.1 % per annum. GDP (PPP) per capita in 2016 was $11,7 thousand, which is significantly higher than that of the most developing countries.

In Russia, Asian markets are most often considered in terms of possible export of Russian energy carriers to the key importing countries of the region: China, Japan, India, and the Republic of Korea. But account should be taken of the trend towards trade regionalization in Asia, where Indonesia is a significant competitor of Russia, especially in coal. Export supplies of coal from Indonesia to India, China, Japan and the Republic of Korea compete with Australia and, in many ways, with Russia. The country exports 300-350 million tonnes of coal each year, which is twice as high as that of our country. In 2016, Indonesia exported 51 million tonnes of coal to China, 35 million tonnes to Korea and 33 million tonnes to Japan (in the same year Russia exported 16 million tonnes, 25 million tonnes and 19 million tonnes respectively).

See more in the bulletin Indonesia is an Important Exporter of Energy Resources.

Other bulletins on current trends in the world economy can be found in Publications.