In the context of ongoing trade disputes, U.S. President Donald Trump this week announced an agreement with Indonesia. Washington will impose a 19% tariff on Indonesian exports, while U.S. goods will gain duty-free access to the Indonesian market. At the same time, Jakarta pledged to purchase U.S. energy commodities worth USD 15 billion, agricultural products worth USD 4.5 billion, and fifty Boeing aircraft. Meanwhile, the EU is also negotiating with Indonesia, in this case on the nature of a free trade agreement.
Indonesia in the Spotlight of Southeast Asia
Indonesia is the largest economy in ASEAN and, by nominal GDP, the sixteenth largest economy in the world. With over 280 million inhabitants, it is the fourth most populous country on the planet. The government aims to rank among the world’s top ten economies by the end of this decade, and according to some estimates, Indonesia could become the fourth-largest economy in the world (in PPP terms), after China, India, and the U.S., by 2050. In the coming years, steady GDP growth of around 5% is expected.
The Indonesian government has prepared a strategic document, Vision Indonesia 2045, outlining its ambition to join the ranks of developed economies on the centenary of its independence in 2045. In May 2025, Jakarta entered the technical phase of the OECD accession process, which adds further credibility to this ambition.
Indonesia is a member of the G20, pursuing a pragmatic foreign policy while maneuvering primarily between the U.S., China, and the EU. It strives to act as a bridge between the West and the Global South, demonstrated by its growing involvement in BRICS as well as active negotiations with the EU and the U.S.
EU–Indonesia relations have deepened in recent years, with free trade agreement negotiations ongoing since 2016, amounting to 19 rounds so far. In July, the parties reached a political agreement on the comprehensive economic partnership agreement (CEPA), set to be concluded by September 2025, which will support trade, investment, and cooperation in raw materials.
The EU is Indonesia’s fifth-largest trading partner, with bilateral trade in 2024 amounting to €27.3 billion in goods and €8.8 billion in services.
A Country on the Margins of Slovak Interest?
In 2024, Slovak exports to Indonesia amounted to USD 17 million (0.015% of total Slovak exports), while imports reached USD 174 million. By comparison, Czech exports stood at USD 170 million and imports at USD 475 million. These figures clearly indicate significant untapped potential for Slovak exports to Indonesia.
The last ministerial visits from Slovakia were carried out by Economy Ministers Juraj Miškov in 2011 and Tomáš Malatinský in 2012. In 2018, Slovak Finance Minister Peter Kažimír visited Jakarta. Relations were revived following the visit of Slovak Defense Minister Robert Kaliňák, who held talks on strategic cooperation in the defense industry. His meeting with the defense minister and newly elected president Prabowo Subianto paved the way for cooperation in defense, science, and technology, including arms industry supplies and academic exchange.
The Czech Republic is also actively developing cooperation with Indonesia in defense, cybersecurity, research, and innovation. In June, the Czech Republic participated in record numbers at Indo Defence, the largest defense and security fair in Southeast Asia, where 26 Czech companies showcased their products. Slovakia was also represented at the fair, including the company GRAND POWER.
Jakarta is confirming its strategy of diversifying suppliers, with the defense minister announcing an increase in the defense budget from 0.8% to 1.5% of GDP.
In addition to defense, Indonesia offers Slovak companies opportunities in infrastructure, energy, healthcare, and ICT. Nearly half of the population is under 30 years old, driving demand for consumer goods and digital services, making Indonesia one of the fastest-growing consumer markets in the world.
The New Capital and Strategic Projects
The cabinet of former president Joko Widodo approved 14 strategic projects to develop industrial zones, transport, energy, and tourism, aiming to reduce logistics costs and attract private capital. President Prabowo Subianto has also launched an ambitious food program: by 2029, he aims to provide free nutritious meals to more than 82 million children and pregnant women. Already in January 2025, about 570,000 portions were being distributed daily.
Particular attention is being given to the construction of the new capital Nusantara on the island of Kalimantan. The vision foresees Nusantara becoming a green city by 2045, making use of cutting-edge technologies and renewable energy sources.
Author: Filip Šandor, Faculty of Natural Sciences, Comenius University Bratislava, EXPORT ANALYTICA
