“This year, I am optimistic that the trade value between Indonesia and Vietnam can reach around $9.6 billion to $9.8 billion. Therefore, [I believe] the target of $10 billion can be achieved by 2020,” Ibnu said during a video teleconference in Jakarta last week.

The $10 billion target was set last year when President Joko “Jokowi” Widodo met Vietnamese President Tran Dai Quang in Hanoi.

According to Ibnu, trade between the two countries reached $8.45 billion last year, up around 30 percent from the previous year.

Amid trade deficits with many other countries, Indonesia enjoyed a surplus in bilateral trade with Vietnam, he said. Indonesia-Vietnam trade in the first half of the year, for instance, had reached $4.26 billion, with a surplus of $1.04 billion for Indonesia.

Vietnam, however, remains Indonesia’s serious competitor in terms of foreign direct investment (FDI) in Southeast Asia, with impressive growth in recent years, Ibnu said.

He cited Indonesian Embassy data that shows Vietnam’s FDI reached $18.47 billion in the first half of 2019, helping propel its gross domestic product (GDP) growth to 6.76 percent.

Indonesia’s total FDI in the same period was $15.17 billion, according to the Investment Coordinating Board (BKPM), while the country’s GDP grew 5.07 percent.

“Vietnam’s economy is growing very rapidly because the country is aggressive. They can take advantage of opportunities,” Ibnu said, describing the ongoing trade war between China and the United States as one such opportunity that could be exploited.

Ibnu said three factors made Vietnam more attractive to foreign investors, particularly those from China looking for an alternative production base and market following tariffs imposed on its goods by the US: lower production costs thanks mostly to low labor cost, simplified investment licensing and good infrastructure.

“As a result of rising tariffs, the production and labor costs in China have also risen. Therefore, they are expanding investment in Vietnam, especially in labor [-intensive industries] to cut costs,” he said.

Seeing Vietnam’s economy grow aggressively, Ibnu said, Jakarta must no longer underestimate Hanoi.

He urged Indonesia to study and implement economic policy practices that had been implemented and proved successful in Vietnam.

“If there is a Vietnam policy that has proven to be better [than Indonesia’s], we need to see, study and implement it by adapting it to our domestic conditions and situation,” he said.

“If there are countries that are more advanced in certain fields, the government must learn from their experiences.” (ipa)

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