Indonesia, UAE sign reinsurance agreement to boost bilateral trade

UAE federal export credit company, Etihad Credit Insurance (ECI), and its Indonesian counterpart, Indonesia Re, have signed a reinsurance agreement to enhance bilateral trade and support collaborative initiatives across the world.

This pact follows the MoU signed between ECI and Indonesia Re in November last year. Under the agreement, the entities will jointly strengthen trade and economic cooperation by helping domestic companies of the respective countries grow overseas. The two state-owned institutions will make it easier for these companies to access liquidity and funds to pursue their international expansion.

They will also support domestic enterprises in several growth sectors with innovative trade finance products, including ECI’s unique Shariah-compliant finance solutions, ECI Islamic.

Massimo Falcioni, CEO of ECI, said: “The reinsurance agreement between ECI and Indonesia Re is a natural progression of decade-long business relation between the two countries and the implementation of the recently signed MOU.”

“This agreement is a perfect warm-up for the UAE’s presence at the imminent G20 summit, which reflects the importance of collective action and inclusive collaboration among major developed countries and emerging economies around the world, which is the core purpose of the G20 under Indonesia’s presidency. The reinsurance agreement focuses, among others, on trade and project financing for micro, small, and medium-sized enterprises, including but not limited to the health sector, sustainable energy and digital transformation,” he added.

The summit will be held in November in Bali, Indonesia, under the theme “Recover Together, Recover Stronger”.

The new agreement will help protect local businesses and exporters in line with the two countries’ aim to accelerate economic diversification and sustainable development goals.

Benny Waworuntu, CEO of Indonesia Re, said: “We are delighted to reinforce our partnership with ECI through this reciprocal reinsurance agreement. We’re confident that this will become a catalyst in empowering Indonesia’s commercial ties with the UAE and make a marked difference for our respective businesses by furnishing companies in both countries with ideal and innovative export credit insurance solutions.”

Close trade and investment ties

During the last five years, the net worth of non-oil trade between the UAE and Indonesia has surpassed Dhs40.4bn. In 2020 alone, despite the challenges of the pandemic, the total value of the UAE’s non-oil trade with Indonesia stood at Dhs7.1bn.

The UAE has also invested in Indonesia in different sectors. Last year in march, the UAE announced it will invest $10bn into Indonesia’s sovereign wealth fund, the Indonesia Investment Authority. The investments will focus on strategic sectors in Indonesia, including infrastructure, roads, ports, tourism, agriculture, and other promising sectors that have potential for growth and can contribute to growth as well as economic and social progress.

Read: UAE to invest $10bn in Indonesia’s sovereign wealth fund