Jakarta, August 3rd, 2022
A day after holding a business forum with the business sector and the Japanese government, the Indonesian B20 delegation and the Indonesian Chamber of Commerce and Industry continued their visit to South Korea. This visit is a continuation of Indonesia's B20-G20 Presidency promotion mission as well as establishing economic partnerships and business cooperation with investors from South Korea.
During the visit which took place on Thursday (28/7/2022), the B20 delegation and the Indonesian Chamber of Commerce and Industry held an important meeting facilitated by the Indonesian Embassy in South Korea. This business meeting discussed opportunities for economic, investment, and trade partnerships between Indonesia and South Korea.
From the South Korean side, the meeting was attended by Ahn Duk Geun as Minister of Trade, Industry and Energy, representatives of several business sectors, representatives of the Korean Chamber of Commerce and Industry (KCCI), representatives of the Federation of Korean Industries (FKI), Korea Institute for Industrial Economics and Trade ( KIET), to the Korea International Trade Association (KITA).
While the B20 Indonesia delegation was attended by Chair of B20 Indonesia Shinta Kamdani and Chairman of the Indonesian Chamber of Commerce and Industry Arsjad Rasjid, the meeting was also attended by Minister of SOE Erick Thohir, WKU for International Relations at the Indonesian Chamber of Commerce and Industry Bernardino Vega, Head of Bilateral Relations for South Korea, Indonesian Chamber of Commerce and Industry Purbaja Pantja, and Digitalization Task Force Policy Manager Hans Lukiman.
South Korea has a strategic role as an investment partner as well as a trading partner for Indonesia. The realization of South Korean investment in Indonesia continues to increase, from 1.2 billion US dollars in 2019 to 1.84 billion US dollars in the following year. South Korea is also Indonesia's 8th largest trading partner.
South Korea demonstrated its commitment to investing in new and renewable energy by becoming Indonesia's third largest investor in a joint venture battery project in 2021. This means that South Korea, which is a member of the G20, has the ability to accelerate the global economic recovery through bilateral collaboration with Indonesia, as well as the energy transition and climate change, which are two of Indonesia's top priorities during its B20 presidency.
In addition to providing policy recommendations developed by the Task Force and Action Council of B20 Indonesia, the B20 delegation also socialized the upcoming B20 Summit in Bali, which will take place in November. Additionally, B20 Indonesia produces two legacy programs, notably The Carbon Center of Excellence as a navigational issue for carbon trading via a knowledge center and best practice sharing center. B20 Wiki is a platform that intends to strengthen the capacity of micro, small, and medium-sized enterprises (MSMEs) to integrate global supply chains.
"I am optimistic that The Carbon Center of Excellence platform can be a mutually beneficial solution for investment opportunities in Indonesia and South Korea. For example, SK Group recently expressed interest in investing $100 million to promote decarbonization in the Asian region. Therefore, we would like to invite South Korean business people to support and join in the efforts and implementation of the platform in order to achieve the common goal, namely the transition to net zero emissions," added Shinta.
Three Priority Sectors to Promote Economic Recovery
There are three priority issues or sectors that are opportunities for cooperation between Indonesia and South Korea which are in line with the agenda of the G20-B20 Presidency. First, is the transition to sustainable energy, considering that South Korea is one of the countries in Asia that has taken a step forward in the development of clean, new, and renewable energy infrastructure through the use of green technology in energy consumption efficiency to reduce greenhouse emissions.
The South Korean government is also developing new alternatives to encourage economic growth through green technology and renewable energy. Meanwhile, Indonesia, which already commits Net Zero Emission, supported by the potential of renewable resources of 400 GW, has only utilized 10 GW. Thus, potential cooperation opportunities between the two countries will accelerate the acceleration of the green economy in both countries.
Second, is the potential for cooperation in electric vehicles through efforts to accelerate the proliferation of electric vehicles. South Korea has invested in the development of electric vehicles through the Hyundai company in Indonesia ecosystem end-to-end, from production, nickel grade batteries to the construction of charging infrastructure.
Third, the digital sector encourages the acceleration of the use of technology and digitization by MSMEs, which are the backbone of the Indonesian economy. Through cooperation in technology transfer and investment in connectivity infrastructure with South Korea, the opportunities for Indonesian MSMEs to enter the South Korean market will also be bigger.
KADIN Encourages Increased Economic Cooperation between Two Countries
As the organizer of the B20 Presidency, KADIN encourages potential cooperation with South Korean business actors. Not only explaining the economic potential and investment opportunities that are in line with the legacy produced by the B20 Presidency of Indonesia but also explaining the factors that support the ease of investment in Indonesia.
“Partnership and economic cooperation between Indonesia and South Korea have been well established for a long time. This is supported by the bilateral economic agreement Indonesia - Korea Comprehensive Economic Partnership Agreement (IK-CEPA) and the Regional Comprehensive Economic Partnership (RCEP) which are expected to be completed in August 2022. Indonesia also continues to strive to improve the investment climate and ease of doing business in Indonesia through the ratification of the Job Creation Act," said Arsjad.
The signing of the IK-CEPA, strengthened by the Omnibus Law, has resulted in a significant increase of nearly 40% for trade between the two countries to reach US$18.4 billion in 2021 compared to the previous year and is targeted to reach US$20 billion by 2022.
Arsjad said Indonesia's B20-G20 Presidency is committed to promoting the implementation of multilateral trade principles that are open, fair, and beneficial to all parties. More importantly, it provides new hope and optimism for an inclusive economic recovery post-pandemic in the Asian region.
This meeting was held with the support of PT Astra International Tbk, PT Bayan Resources Tbk, PT Indika Energy Tbk and Sinar Mas.