Indonesia and Japan pledge to strengthen security, economic ties as Yoshihide Suga continues Southeast Asia visit
Japan's Prime Minister Yoshihide Suga on Tuesday pledged low-interest loans of 50 billion yen (US$474 million) to Indonesia to help cushion the impact of the Covid-19 pandemic on the Southeast Asian nation's economy, while also agreeing with President Joko Widodo to strengthen security cooperation and begin discussions on resuming travel between their countries.
"Japan will also boost cooperation with Indonesian health assessment agencies, including by providing them with medical equipment," Suga said during a joint press conference with Widodo at the Bogor Palace, an hour's drive from the capital, Jakarta.
The low-interest loans come in addition to the nearly 32 billion yen in loans Jakarta received from Tokyo in February. The Southeast Asian nation has seen the worst outbreak in the region, with more than 360,000 confirmed infections and more than 12,000 related deaths.
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Suga is on a four-day visit to Southeast Asia that began in Hanoi on Sunday, during which he has sought to prove his diplomatic chops and promote the concept of a "free and open Indo-Pacific" (FOIP) in the face of China's maritime assertiveness.
Japan's new prime minister said he had agreed with Widodo to step up negotiations on a security pact, having reached an agreement in principle on a similar deal with Vietnam on Monday.
"Considering the situation in the region, we also agree to hold a two-plus-two meeting shortly and to speed up the discussion to export defence equipment and technology [to Indonesia] as well as to develop human resources, including law enforcement, in the sea," Suga said.
Widodo, who is popularly known as Jokowi, said in his discussion with Suga he had underlined Indonesia's hope of "a peaceful and stable South China Sea".
Both countries had agreed to strengthen their multilateral cooperation amid the "sharpening rivalry between the world's great powers", Widodo said, referring to the increased competition for influence between China and the United States.
Suga also expressed his support for the Asean Outlook on Indo-Pacific, which was initiated by Indonesia's foreign minister Retno Marsudi and adopted by the regional bloc during last year's Association of Southeast Asian Nations summit.
Japan's Prime Minister Yoshihide Suga talks with Indonesian President Joko Widodo. Photo: Reuters alt=Japan's Prime Minister Yoshihide Suga talks with Indonesian President Joko Widodo. Photo: Reuters
He said the Indonesian-pioneered initiative had "many fundamental similarities" with Japan's FOIP, and Tokyo would work with Jakarta prior to the Asean summit in November.
The leaders also said they had agreed to resume travel between their countries for nurses and care worker trainees, with wider business travel also on the agenda.
"Prime Minister Suga and I have agreed on the importance of [this] travel corridor arrangement for essential businesses. We also agree to task the Japanese and Indonesian foreign ministers with negotiating the details and completing them within one month," Widodo said.
Suga also assured his Indonesian counterpart that Japan's investments in the country would continue despite the pandemic.
"Japan will boost its cooperation in infrastructure, for example [the development of Jakarta's] MRT, the semi-high-speed railway between Jakarta and Surabaya, the construction and management of Patimban Port, and the development of Indonesia's outer islands," he said.
For his part, Widodo welcomed the relocation and expansion of Japanese investments in Indonesia, including firms such as Denso, Sagami, Panasonic, Mitsubishi Chemical, and Toyota.
While Japan has long been ranked among the top five foreign investors in Indonesia, China has chipped away at that position in recent years by beefing up its investments in Southeast Asia's largest economy.
According to data from Indonesia's investment coordinating board, China realised US$2.4 billion of its investment commitments from January to June this year, more than Japan's US$1.2 billion but below top-placed Singapore.
China was the second-largest foreign investor in Indonesia last year with a total of US$4.7 billion, above Japan's US$4.3 billion.
While much needed, Chinese investment is a sensitive issue in Indonesia, where there is a long history of anti-Chinese sentiment.
Critics also point to Indonesia-based Chinese firms' hiring of workers from the mainland rather than locals, adding little value to the country's labour market. These concerns have seen the Widodo administration look to bring in investments from other sources, such as the Gulf countries.
Analysts also see Suga's high-profile visit as helping the Widodo administration, which is currently troubled by nationwide protests against its passing of a controversial job-creation law, win the confidence of other foreign investors looking to set up shop in Indonesia.
"This is an extraordinary recognition for Jokowi as this is a visit from the head of foreign government during the Covid-19 pandemic, when there are no other heads of state visiting Indonesia," said Teuku Rezasyah, an international relations expert from Padjadjaran University in West Java.
"Indonesia will use this momentum to prove that it is prepared to offer locations, regulations, and infrastructure that will support Japanese investments in Indonesia."
"This is an opportunity for Jokowi to show that Indonesia is completely non-aligned," he said. "Suga will get an understanding about Indonesia's position directly from Jokowi, and Jokowi can tell him that Indonesia is non-aligned but can really defend itself and secure its strategic seas."
Additional reporting by Associated Press
This article originally appeared on the South China Morning Post (SCMP).
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