Indonesia Highlights South Korea's Role in Supporting Economic Transformation Ahead of APEC 2025

October 15, 2025 | 07:38 pm

TEMPO.CO, Jakarta - Deputy for Investment Cooperation at the Investment Coordinating Board (BKPM), Tirta Nugraha Mursitama, outlined Indonesia’s direction in economic diplomacy in advance of the Asia-Pacific Economic Cooperation (APEC) Summit, scheduled for Gyeongju, South Korea.

Speaking at a discussion titled "APEC at the Crossroads: Building Bridges for Regional Growth" at the Foreign Policy Community of Indonesia (FPCI) office on Monday, October 13, 2025, Tirta emphasized that industrial transformation is the core policy driving President Prabowo Subianto's economic agenda.

"We understand that President Prabowo has consistently stressed that industrial transformation is one of the vehicles to advance and rebuild industrialization," he said.

The government has set an ambitious goal to reach 8 percent national economic growth. Tirta explained the necessary investment realization to meet this objective: "To achieve that target, we must strive to attract and realize investments worth more than Rp13 trillion, or close to Rp600 billion."

As of September 2025, investment realization has already reached 15 percent of the overall target, with the manufacturing sector contributing a significant 30 percent.

Tirta detailed the nine key priority sectors receiving government focus: renewable energy, industrial transformation, semiconductors, food security, digital economy, export-oriented manufacturing, the Indonesian Capital City (IKN), health, and education. "We have a roadmap and incentives tailored for investors in each of these sectors," he noted.

Tirta also asserted that Indonesia's economy is strongly supported by political stability, a forthcoming demographic bonus, and abundant natural resources. "In general, our politics are stable, and economic transformation is progressing rapidly, despite some fluctuations," he added.

South Korea's Role in Indonesia's Economy

Tirta then highlighted South Korea's instrumental role in supporting Indonesia's industrialization and economic transformation, particularly in the development of the national electric vehicle (EV) ecosystem.

"The Indonesian government is very ambitious in developing the electric vehicle industry along with its entire ecosystem, from upstream to downstream," he revealed. Companies like Hyundai and LG serve as primary partners in establishing the EV supply chain in Indonesia.

He recalled that former Investment Minister Bahlil Lahadalia traveled to South Korea to negotiate directly with Hyundai and LG, successfully persuading them to support investments in Indonesia's EV ecosystem. Tirta stated that the results of this cooperation demonstrate South Korea's strong commitment to the Indonesian economy, positioning the country as one of Indonesia's most crucial strategic partners in both bilateral relations and the global economic landscape.

South Korea currently ranks seventh as the largest Foreign Direct Investment (FDI) contributor to Indonesia, with total investments reaching US$11.3 billion (around Rp185 trillion) over the 2020–2024 period. "They not only bring in capital but also technology, expertise, and human resources to be transferred to local partners," he emphasized.

Despite this success, Tirta acknowledged that the Indonesian government must still work to expand investments outside of Java. "We need to build adequate infrastructure in Sumatra, Kalimantan, Papua, and Maluku if we want to attract more foreign investors to these regions," he conceded.

Outlook for APEC 2025

The APEC Summit 2025 is scheduled to take place from October 31 to November 1 in Gyeongju. Tirta expressed Indonesia's support for South Korea's leadership in hosting this year's APEC, stressing that Indonesia-South Korea cooperation is highly important in strengthening the region's economic growth agenda.

He identified South Korea's position as a bridge between major and middle powers in the Asia-Pacific, arguing that Indonesia needs to play a more active role during the upcoming APEC under South Korean leadership. "The challenge for Indonesia is ensuring that our investment-led growth strategy aligns with APEC's focus on a sustainable, inclusive, and digital economy," Tirta concluded.

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