S. Korea, Indonesia pledge to deepen economic, security cooperation

South Korean President Yoon Suk-yeol with his Indonesian counterpart Joko Widodo in Seoul on July 28, 2022. PHOTO: EPA-EFE

SINGAPORE - The leaders of South Korea and Indonesia have agreed to strengthen economic and security cooperation in areas such as the development of electric vehicles and batteries, smart city systems and even a fighter plane project, as well as in the supply of key minerals.

The two countries also agreed to communicate closely and deepen cooperation with Asean, according to South Korean President Yoon Suk-yeol.

“Asean is our core partner in achieving peace and prosperity in the Indo-Pacific region,” Mr Yoon said on Thursday (July 28) at a press conference in Seoul, held jointly with visiting Indonesian President Joko Widodo.

“Based on our firm support for Asean centrality, we will strike a balance between our Indo-Pacific strategy and Asean perspectives.”

Indonesia is the only Asean nation to have a “special strategic partnership” with South Korea.

A bilateral agreement was signed in late 2017 covering four areas of cooperation: defence and foreign affairs; bilateral trade and infrastructure development; people-to-people exchanges; and regional and global cooperation.

Mr Widodo on Thursday voiced certainty that “our partnership will be even stronger in the future” under the leadership of President Yoon, who took office in May this year.

“We welcome the increasing trend of trade and we agree to continue to open market access, overcome trade barriers and promote superior products from both countries,” he said.

South Korea is the seventh largest importer of Indonesian goods and ranks sixth as an exporter of goods to Indonesia. Trade between both nations reached US$18.4 billion (S$25.4 billion) last year, up from US$15.65 billion in 2019.

Mr Widodo said he “specifically encouraged” South Korean investment in Indonesia’s developing electric car ecosystem, in areas such as batteries.

Mr Yoon noted that Indonesia is a major exporter of nickel - an important component in batteries and other technology products that South Korea produces.

He expressed his gratitude towards Indonesia for helping his country overcome a severe urea shortage last year, noting that “this is an example of how important bilateral cooperation is”.

Indonesia agreed to provide an annual 120,000 tonnes of urea, used to cut emissions in factories and diesel trucks, after China cut exports of the chemical to South Korea.

Mr Yoon and Mr Widodo also agreed to work more closely in the United States-led Indo-Pacific Economic Framework for Prosperity.

The two sides also agreed to expand an agreement signed in 2019 to collaborate on a US$32 billion project to move Indonesia’s capital from the over-congested Jakarta to the new city of Nusantara on Borneo island.

Mr Widodo said construction and water supply are already under way under the initial partnership.

Remote video URL

Mr Yoon said the new agreement “laid the groundwork for our companies to actively contribute to building the new Indonesian capital’s infrastructure, electronic government and smart city systems”.

On the defence front, the two leaders celebrated the first successful test flight of a jointly-developed fighter jet named KF-21.

They also reaffirmed their commitment to close cooperation until the end of the project, although Indonesia has yet to pay its share of the cost of the project, citing economic difficulties.

President Widodo burning incense during a wreath-laying ceremony at the National Cemetery in Seoul. PHOTO: AFP

South Korea’s presidential office said the two sides have agreed to accelerate working level talks on payment issues.

Mr Widodo arrived in Seoul on Wednesday for the last leg of his East Asian tour, which also took him to China and Japan.

Besides the summit with Mr Yoon, he also met Hyundai Motor Group’s executive chairman Chung Eui-sun to discuss cooperation in electric cars.

In a separate meeting with the heads of major South Korean conglomerates such as LG Corp, CJ Group and Lotte Chemical, Mr Widodo urged closer collaboration to develop Indonesia’s economy and voiced hope that South Korea can become one of Indonesia’s top three investors - up from No. 6.

Join ST's Telegram channel and get the latest breaking news delivered to you.