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

Jin-Myon Lee () and Ji Hyun Kang ()
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Jin-Myon Lee: Korea Institute for Industrial Economics and Trade, Postal: Sejong National Research Complex, Korea Institute for Industrial Economics and Trade, 370 Sicheong Dae-ro C-dong 8-12F 30147, Republic of Korea, http://www.kiet.re.kr/en
Ji Hyun Kang: Korea Institute for Industrial Economics and Trade, Postal: Sejong National Research Complex, Korea Institute for Industrial Economics and Trade, 370 Sicheong Dae-ro C-dong 8-12F 30147, Republic of Korea, http://www.kiet.re.kr/en

No 24-8, Industrial Economic Review from 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.

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 (search for similar items in EconPapers)
JEL-codes: F00 F10 F13 F15 F20 F21 F23 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2024-04-30
New Economics Papers: this item is included in nep-env, nep-int, nep-inv and nep-sea
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