As we are entering the third year of Reiwa under the sovereignty of His Majesty the Emperor Naruhito, ties between Japan and Indonesia have grown stronger. To reiterate President Joko “Jokowi” Widodo’s conviction, Indonesia hopes for a continuous strategic partnership with Japan, thus, a partnership for building harmonious relations throughout the region and the world.
The abrupt emergence of the COVID-19 pandemic has hit us hard and caused revolutionary changes to our world. Our daily lives and ways of conducting business have been impacted.
Prime Minister Yoshihide Suga’s first overseas visit to Indonesia in October 2020 amid the pandemic signaled the renewed and unwavering commitment of the two leaders to fortify the Japan-Indonesia strategic partnership.
Regardless of the global crisis, Japan remains one of Indonesia’s strongest and most credible partners. Even during the pandemic, our trade and investment relations, infrastructure projects, cooperation in the areas of labor, maritime affairs, politics and security as well as sociocultural exchange remain in good shape.
The evacuation of Indonesian crewmembers on the Diamond Princess cruise ship at Yokohama Port in February 2020, as well as the Costa Atlantica Cruise Ship in Nagasaki in May 2020, are not only testaments of the strength of our countries’ relationship, but also the very reflection and concerted actions on the ground in mitigating the pandemic early on.
Indonesia has been working hand-in-hand with Japan to secure the supply of medicine and medical equipment to mitigate further spread of the pandemic. Beyond that, our leaders’ commitment to strengthen a strategic cooperation partnership have provided the momentum to promote a more collaborative and collective effort to tackle the pandemic.
In efforts to boost relations, the Indonesian Embassy in Tokyo is currently working hard to promote collaboration to realize the Memorandum of Collaboration in the field of health signed in October 2020 by way of a “triple helix” approach. Any government initiative would be rendered futile without involving the private sector and experts or academics.
Our economic and trade relations since the opening of diplomatic ties in 1958 have been exceptional, to say the least. More than 2,000 Japanese companies have set up and invested in Indonesia and contributed to our economic development and competitiveness. Millions of Indonesians as well as Japanese have enjoyed the fruits of our relations.
Currently, the two countries are finalizing the negotiation on the General Review of the Japan Economic Partnership (IJEPA) that was signed in 2008 to ensure future strategic economic cooperation can be further strengthened.
The pandemic has indeed significantly affected bilateral trade and investment cooperation. Our two-way bilateral trade in 2020 reached only US$24.33 billion, down almost 23.15 percent from the 2019 figure. Japan’s investment in Indonesia also decreased from $4.3 billion in 2019 to $2.58 billion in 2020.
Nevertheless, an interesting fact about bilateral trade during the pandemic is that Indonesian goods, including footwear and clothing, automotive spare parts, biomass, fish products and cocoa, are winning more confidence in the Japanese market. This contributes to the significant increase in Indonesia’s trade surplus vis-à-vis Japan, which reached $2.9 billion in 2020.
Regarding investment cooperation, Indonesia and Japan remain committed to pushing forward the development of priority infrastructure projects amid this challenging time. With a particular focus on the MRT, Patimban Port and the North Jawa Railway project, we have been in close coordination with Japanese counterparts and relevant agencies in Indonesia to ensure that the projects continue moving forward despite some minor setbacks due to the pandemic.
The embassy has remained proactive and supportive of Japanese investments in Indonesia. We have established a regular tax consultation and investment forum with Japanese companies that wish to know more about tax laws, establish or expand their businesses in Indonesia. We are working closely with JETRO, JAPINDA, Jakarta Japan Club, as well as the Indonesian Finance Ministry, Foreign Ministry and Investment Coordinating Board.
The aim is to support more Japanese companies capitalize on Indonesia’s improved ease of doing business and brightening investment climate brought about by recent new laws and regulations. These efforts are expected to contribute to the strengthening of regional supply chains and production.
Besides the traditional trade and investment cooperation, Indonesia and Japan are also committed to enhancing cooperation in human resource development. Indonesia is hoping for more of its workforce to be employed in Japan following the signing of a memorandum of collaboration on specific skilled workers. Although unrivalled in terms of population among ASEAN countries, Indonesia is not the biggest supplier of foreign workers in Japan from Southeast Asia.
Seizing the momentum of the International Year of the Creative Economy, we will explore new areas of cooperation with Japan, such as the digital and creative economy. Nurturing a deeper understanding between the peoples of the two countries could advance a common interest: technopreneurship.
As strategic partners, our two great countries have had countless partnerships and collaborations in many areas of cooperation. But we need to highlight that the vast and seamless relations could not happen without the very bedrock of our relationship, which is deep-rooted people-to-people connections between Indonesia and Japan.
Indonesia indeed has been inspired by and learned a lot from Japan to grow as a country with advanced technology and to become a hub of innovation. Even when facing the challenges of an aging society and declining population, Japan has now taken off toward an ultra-smart society through Society 5.0 technology connected through the Internet of Things.
His Majesty the Emperor Naruhito’s 61st anniversary will fall today, Feb. 23 and, on behalf of the government and people of Indonesia, we wish to extend our sincere message for His Majesty’s health and happiness.
I furthermore hope the unprecedented pandemic would not stop the Japan-Indonesia relationship from moving forward. We should explore all avenues and formats to push our collaboration agenda ahead, because more tangible cooperation can be achieved between Indonesia and Japan in the near future.
The writer is Indonesian ambassador to Japan.