The UK holds a Joint Economic and Trade Committee (JETCO) with Indonesia which is forecast to become a “World Top Five economy by 2040”, according to Robert Kimbell. Praising Brexit Britain’s freedom to strike free trade deals outside the EU, the Chairman of the Time Party argued the JETCO could pave the way for negotiations of a free trade agreement with the emerging south-eastern Asian nation.
He said: “Indonesia is forecast to become a World Top Five economy by 2040.
“And what is Britain doing right now to develop its trade with this emerging economic superpower?
“We have a JETCO in place.
“Hopefully, this will lead to negotiations for a modern bilateral FTA.”
A decade ago Indonesia earned the unwelcome label of being among the so-called “Fragile Five” emerging markets, economies highly vulnerable to capital outflows and a currency slump whenever global interest rates rise.
But fast forward to a new round of monetary tightening led by the US Federal Reserve, Southeast Asia’s biggest economy and its capital markets have shown remarkable resilience, throwing a spotlight on whether the situation has fundamentally changed.
Indonesia’s central bank is among the world’s least hawkish, having given no hint of when it might lift rates, while inflation has only just nudged above the two percent to four percent target range and the rupiah is one of emerging Asia’s best performing currencies.
This contrasts with 2013, when the Fed’s mere mention of plans to taper stimulus triggered destabilising capital outflows that saw the rupiah drop 20 percent, forcing Bank Indonesia (BI) to hike rates by 175 basis points.
Notwithstanding some political risks, Indonesia does appear to be weathering economic conditions better than the others lumped in the Fragile Five – India, Turkey, South Africa and Brazil.
On Thursday, Indonesia expanded a cooperation agreement with South Korea relating to the construction of a new capital city on Borneo island to replace overcrowded Jakarta, paving the way for Korean firms to participate in building digital infrastructure.
The two countries initially signed an agreement in 2019 to work together on the ambitious $32 billion project, under which Indonesia will relocate its capital to Nusantara on Borneo.
No timeframe has been announced yet for its completion.
The revised agreement was made during a summit between South Korean President Yoon Suk-yeol and Indonesian President Joko Widodo, commonly known as Jokowi, in Seoul.
The new agreement “laid the groundwork for our companies to actively contribute to building the new Indonesian capital’s infrastructure, electronic government and smart city systems,” Yoon told a joint news conference.
Boris humiliates France and Germany in hilarious Commonwealth speech [VIDEO]
Tory leadership LIVE: Wallace slams Rishi & throws weight behind Truss [LIVE BLOG]
Backlash as Brexit-blamers shut down over Dover delays [ANALYSIS]
Jokowi said the two countries had already started partnerships in the development of the new capital, including in construction and water supply.
Yoon said South Korea can share its experience from building the administrative city of Sejong, which was officially launched in 2012.
Jokowi said initial construction work on the capital was under way during a visit there last month.
The Indonesian leader also said he had pushed for investment partnerships with Korea, particularly in the development of electric vehicles in Indonesia, including an integrated battery industry project with the mining and automotive steel industries.