Vietnam, Indonesia Cooperation to Become Regional Economic Generators

Vietnam and Indonesia can cooperate to become regional economic locomotives
December 20, 2022 | 10:38
Vietnam, Indonesia Can Cooperate to Become Regional Economic Generators
President of the Indonesia-Vietnam Friendship Association (IVFA) Budiarsa Sastrawinata. Photo: VNA

The upcoming state visit to Indonesia by Vietnamese President Nguyen Xuan Phuc is very crucial for the two countries to continue their discussion on how the two countries can substantially create synergy and cooperate with one another to become economic generators in the region, according to President of the Indonesia-Vietnam Friendship Association (IVFA) Budiarsa Sastrawinata.

Sastrawinata, who is also Director of Ciputra Group, told the Vietnam News Agency (VNA) ahead of President Phuc’s visit from December 21-23, that many of Indonesian firms have come to Vietnam to explore investment opportunities, noting that Indonesia has remained one of the largest ASEAN countries investing in Vietnam.

He recalled that at a recent meeting between Indonesian President Joko Widodo and PM Chinh, Widodo emphasised that Indonesia is committed to continue the establishment of mutually beneficial bilateral partnerships to benefit the people of both countries such as strengthening cooperation in the health sector which is crucial since the pandemic has yet to end.

Sastrawinata stressed that since Vietnam and Indonesia established diplomatic relations on December 30, 1955, the bilateral traditional friendship have been built on the firm foundation laid by President Ho Chi Minh and President Sukarno and nurtured and developed by generations of leaders and peoples of the two countries.

The two countries share many similarities, he said, explaining that both are members of the ASEAN, APEC and many other regional and international organisations and forums.

Indonesia is Vietnam's important partner with great potential, and it highly values Vietnam's role and position as one of the countries with great influence in ASEAN. Vietnam and Indonesia have signed many cooperation agreements and treaties in various fields. Many bilateral cooperation mechanisms have also been established. Since Vietnam and Indonesia agreed to strengthen cooperation on economy, trade, and investment, they have intensified their bilateral cooperation in recent times, he said.

“This reflects in the high intensity of bilateral relations based on the Strategic Partnership of Indonesia and Vietnam in the Southeast Asia region, increasing bilateral trade, strengthening cooperation in a number of other fields such as negotiations on the exclusive economic zones of each country, eradicating illegal fishing, and cooperation to advance ASEAN, and enhance cooperation in both countries maritime sectors.” he noted.

On the other side, Indonesian entrepreneurs should optimise new Vietnamese markets, he suggested, adding that in the next 10 to 20 years, the increasing bilateral economic trade and investment relations between the two countries will benefit both parties in the future.

Sastrawinata said the two nations share several conditions that can support the enhancement of the relationship, including a huge population, increasing economic achievements, rising purchasing power parity, and geographical closeness to other member states in ASEAN.

He suggested that more high-level government visits from both countries are necessary to create better understanding between Vietnam and Indonesia and to solve any issues arise as soon as possible.

“Indonesia will continue to encourage its businesses to capitalise on Vietnam's economic development,” he said. “Indonesia has also invited a number of Vietnamese business groups to invest in Indonesia in various fields such as fisheries, agriculture, and other export commodities.”

Nevertheless, the countries have not been able to maximise their traditional relations and closeness towards concrete cooperation, especially in the economy and commerce, he pointed out.

More promotional activities are needed, he emphasised, adding that Vietnam's investment and tourism flows to Indonesia also need to be promoted. Meanwhile, Indonesian entrepreneurs have not yet fully taken advantage of the economic potential, market, and investment opportunities offered by Vietnam and its government.

“The cooperation between the two countries should not be limited to only big corporations but it also needs to involve SME's and start-up companies which can take advantage of the current advancement of digital technology where cross-border cooperation has been made easier these days,” he proposed.

Culturally, both sides need to intensify the exchange of their national heritage by having more joint events that can help the tourism sector between the two countries to blossom.

People-to-people contact between Vietnam and Indonesia is very crucial, he said, pledging that his association will assist in promoting the people to people and government to government relationship.

Even during the Covid-19 pandemic, the bilateral strategic partnership relationship was maintained and it is ensured that it will develop faster and stronger for the sake of the national interests of the two countries, as well as maintaining regional peace, stability, and prosperity in the Southeast Asia region, Sastrawinata believed.

He held that as one of the fastest-growing economies in the region, driven by export-oriented manufacturing, foreign direct investment, and increasingly strong domestic demand, Vietnam is attracting the attention of investors worldwide.

Despite the disruptions over the past couple of years, many Indonesian companies are still eager to expand their footprint in Vietnam, primarily through mergers and acquisitions, he said.

Vietnam, Indonesia Can Cooperate to Become Regional Economic Generators
Vietnamese Ambassador to Indonesia Ta Van Thong grants an interview to the Vietnam News Agency. Photo: VNA

Meanwhile, Vietnamese Ambassador to the country Ta Van Thong said the state visit of President is an important event marking a stride in the two countries’ relations and helping develop their strategic partnership in an increasingly substantive and effective manner.

Talking to VNA, Thong said bilateral relations have grown on the basis of friendship and mutual trust into a strategic partnership that covers all fields of cooperation and is a future-oriented relationship.

To further advance bilateral cooperation as their strategic partnership will turn 10 next year, he held that the two sides should prioritise stepping up cooperation in some areas.

In terms of politics and security, Vietnam and Indonesia should promote unanimity and coordination at multilateral organisations and forums to help strengthen ASEAN’s solidarity and centrality, and maintain peace, stability, cooperation, and development in the region and the world; press on with opinion exchanges and meetings at all levels; bring into play existing cooperation mechanisms; coordinate their policies in line with Indonesia’s priorities towards the region, especially when the archipelago nation will serve as the ASEAN Chair in 2023; and launch a programme for implementing the strategic partnership for the next phase.

The two countries should also foster economic, trade, and investment links; work out measures for raising bilateral trade to USD 15 billion by 2028; reinforce economic connections, including developing balanced trade and tapping into cooperation potential in new aspects, especially energy transition; and conduct negotiations to remove non-trade barriers, tackle difficulties, and create more favourable conditions for businesses to access each other’s markets, Thong went on.

They need to increase people-to-people connectivity via the exchanges of arts troupes, mass organisations, and localities. It is also important to work together to turn Indonesia into one of the favourite destinations of Vietnamese students in Southeast Asia, and increase scholarships for each other’s students, according to him.

The diplomat held that the two sides also hold huge tourism potential which should be optimised more strongly through products linking the countries and communications to deepen mutual understanding of each other’s histories, traditions, and cultures.

He suggested increasing the flight frequency of current air routes and opening new ones connecting their tourist destinations, adding that tourism cooperation projects should take into account Indonesia’s relocation of its capital and development of new regions.

The Vietnamese Embassy will continue acting as a bridge and working hard to help promote bilateral relations, Thong added.

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