A.Short History of Bilateral Relations
Diplomatic relations between the two countries was established in 1973. However, both countries are yet to have diplomatic missions in their respective accredited countries. Indonesian Embassy for Luxembourg is accommodated by Indonesian Embassy in Brussels, Belgium. Luxembourg's Embassy for Indonesia is accommodated by Luxembourg Embassy in Bangkok, Thailand.
B.Cooperation and Political Relations
Bilateral relations enhancement in political sector is simbolized by the increasing number of Ministerial official visits between the two countries. Recent visit of the Minister of Foreign Affairs of the Republic of Indonesia to Luxembourg on 5-6 February 2009, was a reciprocal response to Luxembourg’s Foreign Minister’ official visit to Indonesia in May 2008.
C.Economic Cooperation, Trade and Investments
As an impact of the current global financial crisis, the total value of trade between the two countries significantly decreased 62,9 % from the total trade value of US$ 36,7 million in 2007 to US$ 13,6 million in 2008. The decrease of trade volume is also caused by the termination of rubber imports from Indonesia and most of the trade (imports) from Indonesia is carried out through a third party country, so imports are not distributed directly from Indonesia. With the overwhelming improvements of the global financial condition, it is hoped that the trade volume between the two countries would increase. Most of Indonesia’s export to Luxembourg consists of rubber and plastic products. Indonesia’s imports from Luxembourg consist of products ranging from machinery tools, metal equipment materials, paper materials, plastic, etc.
The meeting between the Minister for Economy and Foreign Trade of Luxembourg, H.E. Jeannot Krecké, and the Minister of Trade of the Republic of Indonesia, Mari Elka Pangestu, during the visit to Indonesia on 10 November 2008, has indicated the efforts and strong commitment between the two countries to further enhance bilateral relations, especially in the fields of trade, investment and other cooperation. Both countries have agreed to intensify business relations, which includes product promotion, trade missions and business meetings among Chambers of Commerce from the respective countries. At another meeting with Indonesia’s Minister of Industry, Minister of Energy and Mineral Resources, Director General for Disease Control and Environment Sanitation of the Department of Health, Governor of the Central Bank and the Head of Standing Committee of International Economy of the Chamber of Commerce, Minister Krecké acknowledged that Luxembourg is very potential to becoming a financial hub and a hub for Indonesian products in order to penetrate into the European market.
In terms of investment, the total of Luxembourg’s investments in Indonesia increased from US$ 0,8 million (1 project) in 2007 to US$ 22,1 million (1 project) in 2008. The project investment in 2008 was heavily concentrated on warehouses, transportations and telecommunications.