Indonesia and Japan’s relationship has evolved into a dynamic and strategic alliance, underscoring a shared vision for economic progress and driving sustainable growth. As Indonesia continues to strengthen its position as a leader in trade, industrial development, and sustainability within Southeast Asia, Japan remains a crucial partner, committed to supporting Indonesia’s long-term growth ambitions. This collaboration spans an array of sectors, as well as highlights the deep economic and cultural ties between the two nations.
At the heart of these efforts is the Japan Centre, an organization dedicated to facilitating Japan-ASEAN relations, promoting economic exchange, and supporting the integration of ASEAN economies. The Japan Centre plays a vital role in fostering dialogue and partnerships between Japan and ASEAN countries, helping to unlock new opportunities for collaboration and mutual growth.
In this interview with Bridges Magazine, ASEAN-Japan Centre Secretary General Kunihiko Hirabayashi shares valuable insights into the emerging opportunities for Japanese businesses in Indonesia. He also discusses Indonesia’s pivotal role in ASEAN’s broader economic integration and highlights Japan’s ongoing contributions to sustainable development across the region. Through this conversation, Hirabayashi provides a comprehensive view of the evolving economic landscape and the promising future of Indonesia-Japan cooperation.
Bridges: How would you characterize the current state of Indonesia-Japan relations? What are the key pillars of this partnership, and how have they evolved?
Kunihiko Hirabayashi: The current state of Indonesia-Japan relations can be characterized as a robust and multifaceted Comprehensive and Strategic Partnership, marked by deep historical ties and cooperation across various sectors between the two countries. This longstanding partnership of over 65 years is built upon a foundation of mutual benefit and a shared vision for regional stability and prosperity.
The relationship between the two countries has always been anchored on the pillars of economic cooperation, strategic alignment in a changing global order, security cooperation, Japan’s support for Indonesia’s development goals, human resource development and people-to-people exchanges, and cooperation on global issues. Japan has been an important strategic partner of Indonesia in trade and maritime security, as well as an active supporter of Indonesia’s aspirations of becoming a top-five global economy by 2045.
The current state of Indonesia-Japan relations can be characterized as a robust and multifaceted Comprehensive and Strategic Partnership, marked by deep historical ties and cooperation across various sectors between the two countries.
Kunihiko Hirabayashi, Secretary General of ASEAN-Japan Centre
Moreover, the evolution of the Indonesia-Japan relationship can be characterized as a shift from primarily economic cooperation to a more comprehensive partnership encompassing security, strategic alignment, and collaboration on global issues. This evolution reflects a deeper understanding of mutual interests and a shared commitment to regional stability and prosperity in an increasingly complex world.
What emerging opportunities exist for Japanese businesses and investors in Indonesia, and how is the ASEAN-Japan Centre supporting them?
There are several exciting opportunities for Japanese businesses and investors in Indonesia right now. As Indonesia shifts its focus from primary industries to more value-added, or downstream, activities, there is a significant potential in the downstream mining sector. If Indonesia can leverage its nickel ore reserves, the largest in the world, in downstream industries, the country can generate significantly more value. Indonesia could draw lessons from Japan, which has since grown significantly by transforming critical minerals like nickel into high-value products, or taking these resources to the final stages of production, thereby creating more value. These include nickel-based industrial equipment, household appliances, medical equipment, super electromotors, consumer electronics, jet engines, aeronautics, electric vehicles, and power storage devices.
Developing downstream activities for the mining industry in Indonesia could also entail positive implications to the country’s promising electric vehicle (EV) sector. Indonesia is aiming to develop a battery industry and position itself as a major player in the global EV supply chain. The Indonesia Battery Corporation (IBC), for example, is actively seeking partnerships with Japanese companies, particularly to supply the U.S. market, given the potential tariff risks on Chinese products. Even Japanese automakers, who are currently focused on hybrid vehicles, could find opportunities here, as these cars also use nickel-based batteries.
Overall, the ASEAN-Japan Centre (AJC) supports Indonesia’s initiatives by facilitating collaboration between Japanese and Indonesian businesses, encouraging investments in value-added activities, and promoting sustainable business practices. Through trade missions, seminars, and matchmaking events, the AJC helps identify potential partners and supports knowledge exchange, making it easier for Japanese businesses to invest in or collaborate with Indonesian firms in various sectors, including the mining industry. Additionally, the AJC plays a role in fostering dialogue between governments and the private sector, facilitating the development of policies and frameworks that support the growth of business opportunities and investments in Indonesia.
Overall, the ASEAN-Japan Centre (AJC) supports Indonesia’s initiatives by facilitating collaboration between Japanese and Indonesian businesses, encouraging investments in value-added activities, and promoting sustainable business practices.
As a leading ASEAN member, how does Indonesia’s role contribute to regional development, and how does Japan’s partnership strengthen ASEAN integration?
As the largest country in Southeast Asia by population, economy, and geography, as well as being one of the founding members of ASEAN, Indonesia naturally assumes a leadership position within the region. Former Foreign Minister Marty Natalegawa once said, “Leadership in ASEAN is a process, not an event,” reflecting Indonesia’s steady and influential role in shaping regional affairs.
Indonesia’s leadership experience in diplomacy includes mediating regional conflicts. Through its “shuttle diplomacy” acting as a diplomatic bridge between opposing parties diplomatic bridge, Indonesia has had a rich history of facilitating peace talks and resolving tensions, such as during the Cambodia–Vietnam War, the Bangsamoro crisis in the Philippines, and the dispute between Thailand and Cambodia over Preah Vihear.
This also inadvertently shifts the focus to the ongoing conflicts in the South China Sea. One of Indonesia’s key strengths is its strategic neutrality. Not being a claimant in the South China Sea dispute and lacking defense treaties with external powers allows Indonesia to engage with various parties and foster unity within ASEAN. This neutrality helps it maintain a unique position in regional diplomacy.
On the economic front, Indonesia’s active participation in ASEAN has been crucial for regional integration. Indonesia’s 2023 ASEAN chairmanship powerfully underscored its commitment to driving economic development, championing its vision of positioning ASEAN as an “epicentrum of growth.” Under Indonesia’s chairmanship, ASEAN has made significant strides in trade and digital infrastructure, landmarked by the implementation of the Regional Comprehensive Economic Partnership (RCEP), the promotion of digitization in emerging industries, and the launch of negotiations on Digital Economy Framework Agreement (DEFA).
Moreover, Indonesia’s commitment to South-South cooperation is another vital aspect of its role. By offering assistance to less-developed countries, sharing its development experience, and utilizing its human resources, Indonesia contributes to broader regional growth. Japan supports these initiatives through Triangular Cooperation, further strengthening the relationship between the two countries.
Finally, Indonesia collaborates with other nations to address global issues like climate change and information security, demonstrating its leadership in both regional and global governance.
Finally, Indonesia collaborates with other nations to address global issues like climate change and information security, demonstrating its leadership in both regional and global governance.
On the other hand, how does partnership with Japan contribute to ASEAN integration? Aside from economic agreements and investments, Japan is a strong supporter of ASEAN initiatives, such as the “ASEAN Outlook on the Indo-Pacific” (AIOP), which focuses on advocacies surrounding maritime security, connectivity, and economic development. By aligning Japan’s own “Free and Open Indo-Pacific” (FOIP) vision with the AOIP, Japan and ASEAN can jointly work together to advance their shared interests.
Furthermore, Japan and Indonesia promote regional stability through collaborations that enhance maritime safety and security, as well as in areas of human resource development, sustainable development, and disaster management. These efforts are expected to not only contribute to intra-ASEAN development and integration, but also to a stronger, more unified ASEAN-Japan partnership.
