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Japan's recession may become an opportunity for Indonesia, Airlangga says
Japan is a prominent trading partner for Indonesia.
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Coordinating Economic Minister Airlangga Hartarto (left) and a sign language interpreter (right) stand before the press in his office in Jakarta on Feb. 5, 2023. (The Jakarta Post/Deni Ghifari)
Coordinating Economic Minister Airlangga Hartato said Japan's recession could increase investment in Indonesia.
"Usually, during a recession, [Japanese investors] seek economic growth and will look for regions with potential growth, such as within ASEAN," said Airlangga on Monday, as quoted by Antara News. "So, with the recession in Japan, I hope there will be more investment [into Indonesia]."
According to official data, Japan’s economy contracted by 0.4 percent in the fourth quarter of last year due to weakening people’s purchasing power. Japan's economy also declined in the third quarter. A recession is marked by economic contractions in two consecutive quarters.
Due to its economic ties with Japan, Indonesia may be impacted. Japan ranks fourth on the list of Indonesia's largest export destinations. Last year, Indonesia's exports to Japan reached US$18.8 billion.
Additionally, Japan is the fourth-largest investor in Indonesia, with total investments amounting to $4.63 billion last year.
The secretary of the Office of the Coordinating Economic Minister, Susiwijono Moegiarso, explained that the Indonesian government had been trying to conclude multiple trade discussions in anticipation of Japan's recession.
Susiwijono said the Export Enhancement Task Force was focusing on expanding Indonesia's market access by finalizing trade discussions, particularly the Indonesia-European Union Comprehensive Economic Partnership Agreement.
The task force will also seek to increase exports of commodities such as fish and fish products, swiftlet nests, coconut and coconut products, coffee and processed spices, vegetable ingredients and margarine, cocoa, processed foods, meal cakes and animal feed.
These export commodities will target 12 new countries, including Brazil, Chile, China, India, Kenya, Mexico, the Netherlands, the Philippines, Saudi Arabia, South Korea, the United Arab Emirates (UAE) and Vietnam.
