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Tuesday, May 24, 2022

Venturing into new business opportunities

By Pham Le

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Despite the Covid-19 pandemic, trade and investment between Vietnam and Indonesia still posted positive growth in 2021, offering hopes that 2022 could be the year for economic recovery. In an interview with The Saigon Times, Mr. Agustaviano Sofjan, Consul General of the Republic of Indonesia in HCMC, shared his views on the economic cooperation, as well as future business opportunities between Vietnam and Indonesia. Excerpts:

The Saigon Times: You came to HCMC when the city was between social distancing periods. How was your trip?

Agustaviano Sofjan: I arrived in HCMC on September 25, 2021. At that time, flight connections were limited; there were no direct flights to HCMC. After landing at the Tan Son Nhat Airport, we followed every step of the regulations to enter HCMC, including filling out the health declaration form, uploading our vaccine certificates online and going through the quarantine requirements. We spent one week of quarantine at a designated hotel and another at the Indonesia residence.

It’s a tough time for everyone.

Travelling during the pandemic was challenging in itself, but we managed to arrive safely because of the support of the Government of Vietnam. We have to embrace and adapt to the new normal – wearing masks, washing hands, and upholding social distancing. Sustaining this health protocol is important to this day, wherever we are. Even now, with the ease of the restriction of movements and discussion on lifting the ban on foreign tourists, we still have to adhere to the health protocols.

I believe that there is always a silver lining in every situation. The pandemic has brought challenges, but at the same time, opportunities. New innovative ways, initiatives and solutions to do business and how we can go about our daily lives are emerging. We have become more digitally-adapt; we tend to pay more attention to our well-being and maintain a healthy lifestyle. And most importantly, we have become more aware of our surroundings; of how our family, friends and the society as a whole are coping with this pandemic. “Recover together, recover stronger” – this is how we should all get through the pandemic.

There is a lot of work you have to do as a new Consul General in HCMC. But if you had to choose one thing to do first, what would it be?

Indonesia has an embassy in Hanoi, and a consulate mission in HCMC. There is a reason why we have a mission here in the southern part of Vietnam. We have more Indonesian nationals residing in the South, at some 622 Indonesians.

Another important reason is that the engine of growth of Vietnam is in the South – the Southern Key Economic Region. Therefore, as a consul general in HCMC, there is a lot of work to be done: providing consular services and protection to Indonesian nationals, enhancing economic cooperation as well as social-cultural relations between Indonesia and Vietnam are among the main purpose of the mission.

Economic cooperation would be the highlight of the mission, especially now, when we are all recovering from the pandemic.

Can you give us some figures on the economic cooperation?

In 2021, both Vietnam and Indonesia achieved positive growth in their economy (trade and investment), despite the pandemic. The total trade between Indonesia and Vietnam in 2021 amounted to US$11.50 billion, surpassing the trade target agreed on by both our leaders at US$10 billion.

In terms of investment, based on data from the Ministry of Planning and Investment of Vietnam, Indonesia is in 29th place among the 141 countries investing in Vietnam, with a total accumulated investment until November 2021 of US$611.69 million in 101 projects.

Meanwhile, according to the HCMC Department of Planning and Investment, from 1988 to 20 December 2021, Indonesia ranked 33rd of the 116 countries/regions in terms of total direct investment capital in the HCMC area. The number of Indonesian investment projects in HCMC recorded from 1 January to 20 December 2021 was nine, with a total investment capital of US$2.12 million.

How about the year 2022?

We are on the right track. Moving forward, I am optimistic that Indonesia and Vietnam will be able to deepen economic cooperation and venture into new business opportunities.
This year, 2022, would be the momentum for economic recovery. Based on the positive economic results in 2021, we aim to accelerate economic recovery through cooperation this year and beyond. Indonesia and Vietnam are two strong economies in the ASEAN. Strengthening and deepening our economic ties would contribute to building the ecosystem of growth and cause a positive impact on the region as well.

You said you would promote business opportunities. In what way can you do that?

The Consulate General covers 21 provinces and two municipalities (HCMC and Can Tho City) in the southern part of Vietnam. I have visited Dong Nai, Ba Ria-Vung Tau, Binh Thuan, Tay Ninh and An Giang provinces, each of which offers vast opportunities for cooperation. During my visits to the provinces, I met the People’s Committee and related institutions to promote and seek business opportunities; to find out how Indonesia can contribute to the economic development and what Vietnam can complement in terms of trade and investment.

My role as a consul general would be to facilitate, to be a bridge, connecting to link and match between potential and opportunities in Indonesia and Vietnam. Promoting business opportunities is also done through webinars (business forums and business matchings) in cooperation with institutions in Indonesia and in Vietnam.

Next month we will be organizing a promotional event, “Indonesia Spice Up the World”. This is part of an official government program to promote and increase trade and investment opportunities on local spices and herbs, as well as to encourage Indonesian restaurants abroad to grow bigger, including here in Vietnam. We are also preparing a business forum on cooperation in the agricultural sector.

Promoting is merely the first step. The next, and most important step, is how we can materialize the business potential into concrete results, which would contribute significantly to the economy of Indonesia and Vietnam.

Before serving as a consul general, you used to be the director for trade, commodity and intellectual property. What are your thoughts on the Vietnamese market that has attracted so many Indonesian startups?

Due to the Covid-19 pandemic, digitalization has been on the rise globally, including in Indonesia and Vietnam, and will most likely continue throughout the recovery of the pandemic. The advancement of digitalization has become a game-changer and necessity, particularly when we are still dealing with the pandemic.

The future of the economy is digitalization. A report by Nikkei Asia underlined that Southeast Asia’s digital economy is the fastest growing globally. ASEAN’s digital economy is projected to hit US$1 trillion by 2030.

Indonesia and Vietnam are similar in terms of their young population, wide internet coverage and high rate of smartphone users, as well as the strong government support enabling an ecosystem that encourages startups to flourish.

Therefore, it is no surprise that there are a number of Indonesian startups operating in Vietnam: Traveloka, Kien Guru (Ruang Guru), Sociolla, and decacorn – Gojek. These startups not only provide products and services to consumers, but also create job opportunities and spur up creativity among the local startups. I believe their existence here contributes to the development of Vietnam’s economy and market.

Which other sectors do you think are drawing the interest of Indonesian investors?

Vietnam’s robust economic growth, its strategic location in the region, its export-oriented economy, having signed 15 FTAs, the ease of doing business, the large market and political stability has received interest from foreign investors, including Indonesia.

There are approximately 40 Indonesian companies in Vietnam, and most are located in the southern part of Vietnam. The sectors range from spare parts, manufacturing products, FMCG, chemicals, plastic and aluminum, pharmaceuticals and cosmetics to transportation, travel and logistics. These companies produce goods and services for the Vietnamese market, as well as for exports.

Indonesian investors’ interests are in line with Vietnam’s aim to innovate with digital transformation, prioritizing manufacturing and supporting industries and developing a synchronized infrastructure system.

Indonesia’s state-owned enterprises are also keen to participate in projects offered by the Vietnamese Government for foreign investors. There is also an inquiry from an Indonesian company to invest in the electric motorcycle sector.

According to you, what should Vietnam and Indonesia do to increase bilateral trade between the two countries?

The bilateral relations between Indonesia and Vietnam, especially economic relations, have increased significantly since the signing of the Strategic Partnership Agreement in 2013.
Some points to consider in the efforts to increase bilateral trade include providing broader market access for goods and services, strengthening the supply chain between Indonesia and Vietnam within the region and encouraging export products that have added value. This is in addition to increasing the number of flights and sea connectivity as well as the joint promotion of each other’s destination, which would entice the growing middle class in both countries to visit, partnership to support the energy transition, a green and sustainable economy, enhancing coordination, consultation and sharing best practices among government institutions and private sectors.

Both countries have seen significant growth in the digital economy, and cooperation in this field would enhance the industry’s growth in both countries.

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