The Jakarta Post
President Joko “Jokowi” Widodo clearly had high expectations of his meeting with South Korean President Moon Jae-in amid the rupiah’s volatility and Indonesia’s declining exports. The two countries have a long history of strong mutually beneficial economic relations, including during the Asian financial crisis in the 1990s.
According to our report, during Jokowi’s visit, business players of both countries signed deals worth a combined of US$6.2 billion. It is still too early to assess the realization of these commitments, however the reputation and track record of South Korean investments here provide strong reasons for Jokowi to be hopeful.
The impacts of the financial crisis that swept across Asia in 1997 were extremely damaging for many countries, especially Indonesia. Massive protests forced then-president Soeharto to step down after 32 years of authoritarian rule. Many foreign companies fled Indonesia and moved to China. But South Korean companies, such as LG, Samsung and many others, stayed put.
Jokowi’s third visit to South Korea on Monday demonstrated his trust in President Moon’s New Southern Policy through which Moon has vowed to prioritize Seoul’s political and economic relations with ASEAN.
Jokowi visited Seoul this week to commemorate the 45th anniversary of diplomatic relations between the two countries. The President visited South Korea for the first time just two months after his inauguration as president in October 2014 to attend the Korea-ASEAN commemorative summit and visited again in May 2016. Monday’s bilateral summit with Moon was to reciprocate Moon’s trip to Indonesia last November.
Moon is not the first South Korea president to pledge a commitment to the country’s southern neighbors, but Moon has strong geopolitical interests in becoming closer with them in order to reduce the region’s dependence on fellow neighbors China, Japan and Russia. His country depends heavily on the three countries to counter the nuclear threat posed by North Korea and he realizes he needs more friends in the region.
President Moon is evidently eager to respond positively to Jokowi’s economic mission as part of his geopolitical strategy. Moon reached a tremendous diplomatic achievement by persuading North Korean Supreme Leader Kim Jong-un to come to the negotiation table. He will reportedly have a second summit with Kim, and United States President Donald Trump has also signaled his interest to meet again with the North Korean leader.
Indeed, there is still a long way to go to denuclearize the Korean Peninsula. But at least Moon has achieved a major diplomatic breakthrough and begun personal communication with the unpredictable Kim.
Proving his commitment to Indonesia will be very effective for Moon as he seeks to convince other ASEAN countries of the strategic importance of South Korea for their region. The real benefits for Indonesia, however, will only be realized if business between the two countries proves highly profitable not just for Indonesia but also for South Korean investors. Goodwill alone is far from enough.
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