Vietnam-Indonesia ties: five cooperation initiatives for the future

Wed, 15 Mar 2023 22:42:00  |  Print  |  Email   Share:

In 2023, Vietnam and Indonesia will mark the 10th anniversary of their strategic partnership, which coincides with Indonesia's rotating chair role in ASEAN. Over the past decade, the two countries have collaborated closely to emerge as important growth poles in both ASEAN and the region.

Mr. Arsjad Rasjid, Chairman of the Indonesian Chamber of Commerce and Industry (KADIN) and Co-Chair of the ASEAN Business Advisory Council (ASEAN-BAC) 2023 (L) and VCCI President Pham Tan Cong

In light of this significant event, Mr. Arsjad Rasjid, Chairman of the Indonesian Chamber of Commerce and Industry (KADIN) and Co-Chair of the ASEAN Business Advisory Council (ASEAN-BAC) 2023, shared with the Business Forum Magazine the crucial role that Vietnam and Indonesia play in the economic growth of their respective countries and the region.

In your opinion, how has the relationship between the two sides changed after 10 years of signing the strategic partnership? What outstanding achievements have we made, sir?

Vietnam and Indonesia's long-standing economic partnership is built on mutual respect and cooperation and has resulted in strong trade and economic ties. Vietnam ranks 11th among Indonesia's top trading partners, with a trade volume of $14 billion in 2022. The two countries have established partnerships in various sectors, including rural development, coal and gas utilization, and legal cooperation.

Indonesian companies have made significant investments in Vietnam, with 106 valid investment projects worth $638.9 million, while Vietnamese companies have invested $59 million in 17 projects in Indonesia. In addition, the consulate general of Indonesia reported that more than 40 Indonesian companies are operating in Vietnam, producing goods and services for both the Vietnamese market and for export.

In addition, the two countries have set a trade target of $15 billion to be achieved by 2028 and have signed agreements to strengthen their cooperation in the maritime and fisheries sectors. Furthermore, in December 2022, Indonesia and Vietnam announced and decided their Exclusive Economic Zone boundary delimit ation based on the 1982 UN Convention on the Law of the Sea to respect each other’s economic rights.

Ultimately, the partnership between Vietnam and Indonesia exemplifies the power of diplomacy and cooperation in promoting regional peace, stability, and prosperity. Our strong economic and trade ties, coupled with partnerships in various sectors, offer potential for further growth and expansion.

What is your assessment of the role of the Vietnam Chamber of Commerce and Industry (VCCI) in economic cooperation between the two countries?

VCCI has been actively involved in both the ASEAN-BAC chair role as well as being an important international partner of the International Chamber of Commerce (ICC), where KADIN also holds the position of ICC regional coordinator in Asia Pacific.

Through our partnership with VCCI, we hope to be able to promote greener and more sustainable business projects between Indonesia and Vietnam on the basis of the Memorandum of Understanding signed by the presidents of Indonesia and Vietnam in January 2023. The two sides have great potential for cooperation in the fields of hotels, technology, infrastructure, real estate, consumer products, and agriculture.

Recently, leaders of the VCCI proposed organizing an Indonesia-Vietnam business and trade promotion forum before September. This will be the basis for further identification of key areas of cooperation between Indonesia and Vietnam. Male.

Through this forum, we hope to be able to attract more interest in green projects and other key areas. Both federations are very interested in enhancing the partnership in specific ways.

Vietnam's economic growth in recent years has been outstanding, thanks to the great contribution of the VCCI. In particular, Vietnam's resilience in many areas can contribute more to the synergy of Southeast Asia. Indonesia, as the bloc's 2023 Chair, will invite VCCI to share its strategy on those achievements.

Indonesia is one of the largest economies in the region, while Vietnam's recent growth has been firm. In what areas do you think Indonesian enterprises will focus their investments in Vietnam in the coming time?

The Vietnamese and Indonesian business sectors have explored various opportunities for import and export, including Halal products that have the potential to increase tourism, trade, and investment ties. Indonesia's investments in Vietnam in sectors such as fisheries, infrastructure construction, renewable energy, high technology, and digital transformation align with Vietnam's priorities.

As Indonesia currently chairs ASEAN, the chairmanship aims to lead towards green-based development at its core. Last January, the two countries agreed to strengthen their cooperation in the development of the energy and mineral resources sectors, including solar power plants, hydropower plants, and smart grids. This cooperation also presents an opportunity to collaborate on EV development. The EV market in Vietnam is expected to grow rapidly, and Indonesia's electric EV production capabilities could be leveraged to meet this demand. Both countries have been vital in promoting sustainable economic growth and environmental sustainability.

Furthermore, the ASEAN Climate and Energy Project and 2050 net-zero target, as well as the Working Group on Climate Change, have embraced strategic cooperation with environmental champion countries across the globe, including Vietnam and Indonesia. The continuous growth of Vietnam-Indonesia green partnerships will be essential in achieving this goal.

On the digital transformation, according to a report by Google, Temasek, and Bain & Company, Indonesia and Vietnam are among the fastest-growing digital economies in the region, with Indonesia's digital economy expected to triple in value to $133 billion by 2025 and Vietnam's digital economy expected to reach $52 billion by the same year. Hence, building corporate and investment partnerships between the two countries in the digital transformation sector is crucial for the further growth and development of the region's digital economy and start-up ecosystem.

ASEAN has witnessed tremendous growth over the years and has become the world's fifth-largest economy. As the chair of ASEAN BAC in 2023, how do you assess Vietnam's role in promoting the bloc's economic development?

ASEAN's vision of "One Vision, One Identity, One Community" goes beyond being a mere narrative; it is a call to promote economic integration and cooperation to advance ASEAN centrality, positioning the region as the epicenter of growth.

With the combined economic weight, vitality, and diversity of its ten economies, ASEAN has the potential to become "the new China," with Vietnam and Indonesia playing crucial roles in achieving this objective.

Vietnam's participation and driving force in promoting peace, intra-bloc cooperation, and economic development since joining ASEAN have been essential. It has emerged as one of the fastest-growing economies globally, with an average annual GDP growth rate of over 6% since 1986. Vietnam's growing middle class is driving consumption and attracting foreign investment, and its participation in regional economic integration efforts such as the ASEAN Economic Community and the Regional Comprehensive Economic Partnership has been crucial.

Meanwhile, Indonesia, as the largest economy in ASEAN, possesses rich natural resources, a large and growing domestic market, and a young and expanding workforce. Both Vietnam and Indonesia's economic growth and significance are critical to the continued development of the ASEAN region, and their cooperation can promote sustainable and inclusive economic growth while enhancing regional integration.

As such, Indonesia is eager to partner with Vietnam to drive the development of priority sectors such as infrastructure, renewable energy, high technology, and digital transformation, with the goal of showcasing ASEAN as the epicenter of growth and advancing ASEAN centrality.

VCCI President presented a gift to Mr. Arsjad Rasjid, co-chair of the ASEAN Business Advisory Council (ASEAN-BAC) 2023 and chairman of the Indonesian Chamber of Commerce and Industry (KADIN). 

2023 is expected to be a challenging year for the global economy. What initiatives will Indonesia take to promote investment and business activities within the bloc?

As Indonesia leads the chairmanship of ASEAN, with KADIN Indonesia chairing the ASEAN-Business Advisory Council, the ASEAN-BAC plays a vital role in promoting a pro-private sector approach to strengthen economic, investment, social, and environmental progress in the region.

To achieve this, we have identified five key priorities that will be delivered to ASEAN leaders through policy advocacy, including: 1) digital transformation; 2) sustainable development; 3) health resilience; 4) food security; and 5) trade facilitation.

Additionally, Indonesia’s ASEAN-BAC Chairmanship will launch seven legacy projects to take concrete actions towards these priorities and cultivate trade and investment within and across the region. We would like to welcome Vietnam's business leaders and government to cooperate in these initiatives:

First, one of the legacy projects is the ASEAN QR Code System, which improves cross-border payments and regional payment connectivity in the region.

Vietnam plays an active role in supporting the large-scale digitization that is imperative for ASEAN’s vision. I understand Vietnam is fast becoming one of the largest regional markets for digital currency to improve digital payment connectivity, minimize dependency on the dollar, and improve trade and tourism across the region.

Second, another legacy project is the ASEAN Digital Lending Platform, which aims to enable MSMEs and improve financial inclusivity through financial technology.

Vietnam ranks second among the top 10 unbanked nations, presenting an opportunity for Indonesia and Vietnam to widen MSME digital lending access through marketplace lending platforms.

Third, the One-Shot Campaign is a legacy program promoting a permanent disease prevention program that expands regular vaccination to the adult population.

This initiative can be an opportunity for Indonesia and Vietnam to address preventable diseases like dengue, which is currently increasing in Vietnam and other countries in the region.

Fourth, ASEAN Wiki Entrepreneurs is a platform for large corporations to market and for MSMEs to access resources to grow.

Indonesia and Vietnam can take advantage of this platform, enabling MSMEs to connect across ASEAN and tap into regional and global markets.

Finally, industrial decarbonization is a key focus for the ASEAN region, and the ASEAN Net Zero Hub and Carbon Center of Excellence promote collaboration and knowledge sharing towards this goal. Indonesia and Vietnam have the opportunity to work together towards industrial decarbonization, enabling sustainable and inclusive economic growth in the region.

Sincere thanks!

By: Business Forum Magazine



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