Indonesia committed to jet fighter project: Ambassador
Indonesian Ambassador to Korea Gandi Sulistiyanto Soeherman promised more cooperation between Indonesia and Korea in not only economics but also in cultural exchanges this year, which marks the 50th anniversary of diplomatic ties between the two countries.
“For the first time Indonesia reported a surplus in trade with Korea,” Soeherman said during a ceremony held at the Indonesian embassy on Friday. “Trade between the two countries last year rose 37 percent.”
He said trade between the two countries is expected to expand as the Comprehensive Economic Partnership Agreement, which lifts tariffs on nearly 96 percent of Korean goods and 95 percent of Indonesian goods, went into effect from January.
Indonesia is the fourth Asean member to sign a bilateral free trade agreement with Korea after Singapore in 2006, Vietnam in 2015 and Cambodia in 2022.
The two countries are also members of the multilateral Regional Comprehensive Economic Partnership (RCEP), which includes China as well as other Southeast Asian countries, which went into effect last year.
Korean companies in particular have been increasing their investment in Southeast Asia’s largest country, which is rich in raw resources such as nickel that are essential in manufacturing batteries for electric cars.
Indonesia has the largest nickel reserves in the world.
Hyundai Motor opened last March an automotive production plant in Indonesia, its first in the Southeast Asian region.
Korean manufacturer LG Energy Solution is also working to build a battery manufacturing plant in Indonesia.
The ambassador stressed Indonesia’s commitment to the joint development of a next-generation fighter jet.
“My government decided at a cabinet meeting that this project will continue despite the financial disturbance due to the pandemic,” Soeherman said.
The Korean and the Indonesian governments agreed in 2015 on a joint project to develop a next generation fighter jet, the Korea Fighter Xperiment (KFX) or Indonesia Fighter Xperiment IFX.
The KF-21, the first 4.5 generation fighter jet from the project, started trials from last July.
Indonesia has agreed to pay 20 percent or roughly 1.7 trillion won ($1.3 billion) of the 8.8 trillion won development cost of the project.
Some 48 units were scheduled to be produced by 2026.
However, Indonesia has delayed payments since 2017 citing financial difficulties while trying to renegotiate a reduction in its contribution.
Indonesia made a 9.4 billion won payment in November, its first in nearly four years.
Still, Jakarta is 800 billion won in arrears.
“The program will continue,” Soeherman said, pointing to two Indonesian pilots being trained in Korea for the last couple of months as testament to Indonesia’s commitment.
“The financial contribution from Indonesia will continue,” he said.
“The project did have some bumps, but any project at this scale is bound to have some issues,” said Chung Eui-hae, director general of the Asean and Southeast Asian Affairs Bureau at the Korean Foreign Ministry. “What we have consistently seen, however, from the Indonesian government is their continued commitment to go ahead with the project as agreed from the start.”
She said the Korean government is “very optimistic,” and “happy” that the financial contribution from the Indonesian side has resumed since last year and expressed confidence that it will continue this year.
She stressed that there is no going back on the initiative.
The ambassador, however, did not say whether there will be further expansion of defense cooperation.
However, during his presentation, the ambassador laid out his ambition to create Indonesia’s own cultural onslaught, benchmarking Korea’s hallyu, or Korean Wave.
As his first step, the ambassador said his embassy is his nation’s first to create a dedicated division for culture, the Creative and Digital Economy, as well as Startup Acceleration and Public Diplomacy division.
“We are at a critical juncture to reflect on the 50 years of friendship and define approaches to advance cooperation for the coming decades,” Soeherman said.
The ambassador said the theme of the 50-year relationship between the two countries is “closer friendship, stronger partnership.”
BY LEE HO-JEONG [firstname.lastname@example.org]