South Korea Shares Investment Challenges in Indonesia<\/p>\n
Reporter<\/p>\n
June 23, 2026 | 02:32 pm<\/p>\n
TEMPO.CO, Jakarta - South Korea outlines a number of obstacles\naffecting the investment climate in Indonesia, as the two countries seek\nto advance their strategic partnership.<\/p>\n
The chair of the Korea-Indonesia National Assembly Friendship\nCommittee, Kim Gi-hyeon, cited challenges in the economic relations\nbetween both countries in recent years. Reaching $25.5 billion in 2020,\nbilateral trade between Indonesia and South Korea is on a downward\ntrend.<\/p>\n
\u201cCertifications required [for exports] in Indonesia raise the\nnon-tariff barriers that make it difficult for Korean companies to enter\nthe market,\u201d he said during \u2018The Indonesian Next-Generation Journalist\nNetwork on Korea\u2019 discussion held by the Korea Foundation and Foreign\nPolicy Community of Indonesia at the National Assembly on June 9.<\/p>\n
\u201cAnd the elimination of electric vehicle incentives has made Hyundai\nhesitant to make additional investments,\u201d he said.<\/p>\n
Kim explained that Hyundai Motor Company has produced electric\nvehicles in Indonesia, such as the Kona EV and IONIQ 5. \u201cThese are the\nfirst electric cars manufactured in Indonesia,\u201d Kim said.<\/p>\n
But Kim said the Indonesian EV incentives are now geared towards\nbenefiting Chinese companies. Nevertheless, Kim believes that South\nKorea is keen to explore more mutually beneficial cooperation with\nIndonesia.<\/p>\n
\u201cI hope there will be more opportunities for economic investment,\ntechnology transfer, and talent development between Indonesia and\nKorea,\u201d said Kim.<\/p>\n
Strategic Partnership Amid Global Uncertainties<\/p>\n
Separately, Deputy Director-General of the ASEAN and Southeast Asia\nAffairs Bureau at the South Korean Ministry of Foreign Affairs, Jung\nGa-yeon, stated that the comprehensive special strategic partnership\nestablished by both countries reflects the highest level of trust and\ndetermination.<\/p>\n
According to Jung, Seoul and Jakarta share the goal to bolster\nmutually beneficial cooperation amid increasing global\nuncertainties.<\/p>\n
\u201cThrough this momentum, Korea and Indonesia will continue to work\nclosely to provide tangible benefits for our people by expanding\ncooperation in various sectors, including defense industry cooperation,\nsupply chains, energy, digital technology and AI, as well as the\ncultural and creative industries,\u201d said Jung.<\/p>\n
Jung added that South Korea\u2019s relationship with Indonesia bridges a\nbroader cooperation between South Korea and ASEAN. \u201cSeoul is endeavoring\nto be a contributor to dreams and hopes, a foundation for growth and\ninnovation, and a partner for peace and stability,\u201d she said.<\/p>\n
Indonesia Claims Investor Interest Remains Positive<\/p>\n
The Indonesian Ambassador to South Korea, Cecep Herawan, said South\nKorean businesses still view Indonesia positively. According to him,\nthere are no significant issues impeding communication or investment\nplans of Korean companies in Indonesia.<\/p>\n
\u201cThere are certainly questions or requests for clarification from\nthem. However, we have sufficient data and information, so communication\nwith South Korean business players has been going well,\u201d said Cecep when\nmet at the Indonesian Embassy in Seoul, Tuesday, June 9, 2026.<\/p>\n
He mentioned that investors not only consider a country\u2019s domestic\nconditions when making business decisions. The global economic and\ngeopolitical situation also factors into realizing investment\ncommitments.<\/p>\n
According to Cecep at the time, South Korea\u2019s investment realization\ntarget in Indonesia of $10.2 billion is still ongoing. Several projects\nhave progressed rapidly, while others are still under discussion.<\/p>\n
\u201cThe investment realization target of $10.2 billion, some can be\nexpedited, some are still awaiting the process,\u201d said Cecep, citing the\nphase II investment plan of PT Krakatau Posco to produce specialized\nsteel for the automotive industry, which is currently still under\nintensive discussion.<\/p>\n
Read: Indonesia, South Korea Seal US$102 Billion Cooperation Deals\nAcross Key Sectors<\/p>\n
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