Naruhito’s Visit A Chance to Attract Japanese Investment
Jakarta. Japan’s Emperor Naruhito’s Indonesia trip has become a golden opportunity to attract Japanese investment into the country, according to the Indonesian Employers Association (Apindo).
Apindo chairwoman Shinta Kamdani recently said that Indonesia should use this chance to show Japanese investors its investment climate.
“The emperor is a trustworthy figure whom the Japanese people truly respect. We need to create a favorable impression on Indonesia’s potential, as well as our business and investment climate,” Shinta told Investor Daily on Monday.
The emperor, however, holds ceremonial functions. This means that his visit is unlikely to create concrete partnerships. Shinta added: “It is not within [the emperor’s] scope of work.” Hence, the government needs to also show Japanese Prime Minister Fumio Kishida the areas that the two nations can work on.
“But at least Indonesia can present the potential cooperation [to the emperor] and see his initial reactions [towards the idea]. In other words, test the water,” Shinta said.
Japan is currently Indonesia’s fourth-largest investor. Foreign direct investment from Japan in Indonesia totaled $1 billion in the first three months of 2023.
According to Shinta, Indonesia is mostly trading unprocessed commodities with Japan despite the two countries complementing one another from an economic standpoint.
There is still a huge room for a partnership in industrial and added-value product supply chains.
The government also needs to use the Indonesia-Japan Economic Partnership Agreement (IJEPA) to develop industries other than automotive, including machinery and chemicals.
Indonesia’s exports to Japan and Japanese investment per capita in the country still fall behind Thailand, Vietnam, and Malaysia which have an economic partnership agreement with Tokyo. Although Indonesia’s aggregate exports to Japan and the Japanese investment inflows might beat those of the said three countries.
Segara Research Institute executive director Piter Abdullah attributed Indonesia’s automotive industry growth to its partnership with Japan. Going forward, Indonesia should further bolster its ties with Japan while making sure the partnership is mutually beneficial.
This marks Naruhito’s first goodwill visit since taking the throne as Japan’s 126th emperor in 2019.
Read More: Naruhito’s Visit to Pave Way for Stronger Economic Ties: Jokowi
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