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Saturday, June 15, 2024

Beyond expectations

The Saigon Times

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Vietnam and Indonesia have enjoyed a strong bilateral relationship with time-tested values. The two countries have successfully exceeded their target by 2023, with US$14 billion in bilateral trade. In an interview with The Saigon Times, Denny Abdi, Ambassador of Indonesia to Vietnam, shared his insights into the new heights of strategic partnership between the two countries.

The Saigon Times: What are your expectations for the potential of Indonesian investments in Vietnam, such as Japfa Comfeed, an Indonesian company in Vietnam?
Denny Abdi: When our President visited Hanoi in 2018, the two countries set a target of US$10 billion by 2023, but by 2022, we had already accomplished US$14 billion, which was 40% higher than the target set by the two leaders, thanks to the investors and bilateral trade from both countries.

Japfa Comfeed is one of the largest Indonesian investors in Vietnam, starting operations in 1996. They now have eight feed mills, several stores and farms in Vietnam, as well as 5,000 employees nationwide. They have an annual revenue of US$800 million and a total investment of US$500 million.

I predict it will continue to expand because Vietnam and Indonesia are the two most populous ASEAN countries. Indonesia has about 280 million people, and Vietnam has 100 million people. The government’s responsibility for nations with large populations, such as Indonesia and Vietnam, is to maintain food security.

I believe Japfa Comfeed will continue to expand in Vietnam, Indonesia and other nations with big populations. We have been through situations such as crises and the Covid-19 outbreak. Food security is becoming increasingly vital in every scenario. Thus, it is food security that the two countries need to support in the long term.

In addition to agri-food industries, what are the major interests of Indonesian businesses in Vietnam?
With US$14 billion in bilateral commerce, Indonesia now sells items Vietnam does not have, such as coal, palm oil, vehicles and steel. Indonesia also imports electrical gadgets, including mobile phones, from Vietnam. As a result, Vietnam purchases what it does not have, and Indonesia does the same. If we go beyond that, we will see that we have so many opportunities to collaborate.

First, agriculture has a lot of promises, and we need to look at it in terms of food security. Second, it is the digital and high-tech industries since both nations have a large number of young people and a demographic advantage. Third, it is a green economy since the world is turning green, which is also the commitment of all global leaders declaring that we need to eliminate fossil fuels to safeguard the environment and cut emissions. These are the industries in which Vietnam and Indonesia may grow and become more competitive compared to other nations worldwide.

How do you rate the current trajectory of Vietnam-Indonesia economic relations post pandemic?
In 2013, Indonesia and Vietnam established a strategic relationship, marking the tenth anniversary of the two nations’ strategic cooperation in 2023. How can we put strategic cooperation into action? We completed the two countries’ five-year plans. So, we had a five-year action plan from 2013 to 2018, followed by another from 2019 to 2023. As a result, we set a target of US$10 billion by 2023 and completed it. We are now working with two authorities, the Foreign Ministries of Indonesia and Vietnam, as well as other ministries, to set up the next five-year plan from 2023 to 2028, with a new target of US$15 billion. As we already surpassed US$14 million last year, I believe we can be more ambitious with the increased target of US$15 billion.

What are the opportunities for Vietnam and Indonesia to enhance bilateral cooperation, notably in tourism and sustainable development?
Indonesia and Vietnam are home to stunning tourist attractions. When we talk to travelers from outside our region, they love to visit Indonesia and Vietnam. There are many lovely tourist destinations in Indonesia, not just Bali, and Vietnam is more than just Halong Bay.

However, when it comes to tourism, connectivity is essential because this vehicle will bring people to our nation. In order to visit our beautiful regions, we must have an affordable and accessible tourist destination through connecting air links. As a result, one of my primary responsibilities as Indonesia’s ambassador to Vietnam is to advocate for more connections between cities in Vietnam and Indonesia. And I’m pleased to see that aviation is expanding rapidly in Vietnam and Indonesia.

Although we have been suffering from the effects of Covid-19 for the last three years, it is almost over. In fact, last week, WHO declared that the world’s status as a public health emergency had ended. However, we must exercise caution. That is why in the ASEAN priorities this year, Indonesia has placed health issues as one of the prime priorities together with food security and energy security.

What makes Vietnam’s business environment appealing to foreign investors, particularly Indonesian ones? How can Vietnam strengthen its advantages?
First, Vietnam is very good at maintaining political stability. When it comes to investing in a country, this is the number one priority for any investor. Second, the Vietnamese Government is doing an excellent job of creating regulations to allow investors to continue operating. When I spoke to Japfa Comfeed Vietnam about the obstacles they encountered throughout their Vietnam operation, they responded they were very happy. They have been in Vietnam since 1996 and are still expanding today. So, I believe the Government is doing an excellent job of inviting and enabling international businesses.

Aside from that, infrastructure requires energy, particularly renewable energy. This is what investors demand since, in the future, many global corporations will want to invest more in your country if you use renewable and clean energy. As many companies have been told to follow Environmental, Social, and Governance principles, this is something that the governments of Vietnam and Indonesia must look into and improve if we want to see more investors coming to our countries.

To enhance competitiveness, what advice would you give to the small, and medium-sized companies based in Vietnam?
We have similarities in terms of economic structure. In Indonesia, there are many small and medium-sized businesses. Usually, they struggle with developing a good product, researching for their product and creating a product that is competitive in the market. In addition, they need market access.

Fortunately, our government and Vietnam’s are attempting to assist them by creating conditions where large corporations may cooperate to assist small and medium-sized businesses. So, I believe that partnership is the key, with small and medium-sized businesses benefiting from government incentives and regulations. They can collaborate with and assist one another.

A business partnership is always a win-win situation. Competition does not always mean attempting to defeat other businesses but striving to promote and create a favorable climate for the economy. By doing so, big companies can boost and assist a large number of small and medium-sized businesses.

With Indonesia assuming the ASEAN Chairmanship in 2023, how does it plan to facilitate trade and foster investment through ASEAN members, especially in Vietnam?
Indonesia is chairing ASEAN in 2023 after the end of the Covid-19 pandemic. It signifies that Indonesia is committed to assisting itself and the ASEAN members to recover stronger than before. But, in order to do so, we must first ensure that Southeast Asia is a peaceful and secure region since, without it, no investor would come here. This is what ASEAN, chaired this year by Indonesia, is attempting to address. We are trying to maintain peace and stability in our region. Then, we aim to develop a network that includes the government and businesses to work side by side to support business activities to grow back even stronger than before Covid-19.

Reported by The Ky

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