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Building a Sustainable Economic Partnership: Challenges and Opportunities for Korea and Indonesia

Author

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  • Lee, Jin-Myon

    (Korea Institute for Industrial Economics and Trade)

  • Kang, Ji Hyun

    (Korea Institute for Industrial Economics and Trade)

Abstract

Indonesia is becoming a more and more important player in the global economy due to its large and growing population, abundant natural resources, strategic location, emerging market potential, investment in infrastructure, and membership in key regional economic blocs. Bilateral trade between this new regional player and South Korea has been steadily growing, encompassing a wide range of goods and services, and Indonesia offers attractive investment opportunities for Korean businesses across various sectors. Korean President Yoon Suk-Yeol, attending the Korea-Indonesia Business Roundtable held in Indonesia in 2023, presented a development strategy for a new 50-year partnership between the two countries. Yoon stressed the potential for fruitful cooperation between Indonesian and Korean companies in advanced industries, including the electric vehicle (EV) and battery sectors, given Indonesia’s status as the largest ASEAN economy and its vast reserves of critical minerals. However, despite the two country’s longstanding economic relationship, key challenges remain, such as stagnation and instability. In this paper, we analyze major trends and core features of the economic cooperation between Korea and Indonesia, focusing on trade and investment. We then address some of the strengths and weaknesses of the cooperative relationship. Based on this, conclude the paper by describing the implications for a more sustainable economic partnership.

Suggested Citation

  • Lee, Jin-Myon & Kang, Ji Hyun, 2024. "Building a Sustainable Economic Partnership: Challenges and Opportunities for Korea and Indonesia," Industrial Economic Review 24-8, Korea Institute for Industrial Economics and Trade.
    • Handle: RePEc:ris:kieter:2024_008
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    More about this item

    Keywords

    Korea-Indonesia relationship; natural resources; critical mineral resources; economic cooperation; Korea-Indonesia trade; Foreign Direct Investment; FDI; industrial development; industrial cooperation; strategic collaboration; supply chain stability; Korea; KIET;
    All these keywords.

    JEL classification:

    • F00 - International Economics - - General - - - General
    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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