May 23, 2024
JAKARTA – South Korea ranked seventh in terms of foreign direct investment (FDI) in Indonesia, with investment recorded at US$2.5 billion in 2023, an increase of more than $200 million (8.7 percent), compared with 2022.
Entering the fifth decade of bilateral ties between South Korea and Indonesia, trade between the two nations reached $20.8 billion in 2023.
“I am confident that our collaboration will further increase and develop in the future. I hope that Minister Ahn can help strengthen and deepen collaboration in the area of industry, trade and energy transition between Indonesia and Korea,” Coordinating Minister for Economic Affairs Airlangga Hartarto said in a meeting with South Korea’s Trade, Industry and Energy (MOTIE) Minister Ahn Duk Geun in Seoul on May 22.
Earlier reports said that several agreements were reached at the second Joint Committee on Economic Cooperation (JCEC) meeting held in Seoul in July 2023. They included collaboration on the development of nickel derivatives for electric vehicle (EV) battery production, providing Indonesia’s fruit with market access to South Korea, the expansion of Lotte’s petrochemical plant, the construction of Krakatau Steel’s steel cluster – Posco, the expansion of market access for Indonesian micro, small and medium enterprises (MSMEs) through South Korea’s e-platform and also collaboration on the energy transition and mitigation of global climate change covering collaboration on carbon capture and storage (CCS) technology, hydrogen/ammonia energy production and the development of a hydropower plant.
“I am also proud and would like to congratulate [Airlangga] on being awarded a Doctor Honoris Causa degree by Gyeongsang National University [GNU]. It is hoped that as an alumnus, Minister Airlangga will play more of a role in promoting collaboration with Korea,” said Minister Ahn.
According to Airlangga, the existing collaborative work included the expansion of the Lotte petrochemical plant and the construction of the steel cluster at Kakatau Steel. And yet, more efforts should be directed to drive the implementation of agreed collaboration.
The two ministers also discussed collaboration on the development of an EV ecosystem through investment made by Hyundai and LG Energy Solution in Indonesia.
“I hope that the EV ecosystem can be more in-depth, and, certainly, later we will ask Korea to help us talk with the United States regarding the possibility that the IRA will allow products produced collaboratively between LG and Hyundai to have access to the US market,” Airlangga said, referring to a recently passed US law.
On the occasion, South Korea also disclosed a collaboration opportunity regarding the development of a nuclear power plant through the Korea Atomic Energy Research Institute (KAERI) that has developed small modular reactor (SMR) technology, which is designed safely and produces a lower carbon footprint than conventional reactors.
SMR technology can be an alternative solution to supplying electric energy, especially in remote or isolated areas.
“This year will be Indonesia’s turn to host the third JCEC and so, I would like to use the opportunity to invite Minister Ahn to come and join the JCEC in July in Jakarta,” said Airlangga.