Indonesia and Vietnam relations: Moving forward

Looking back over the past decade, Indonesia and Vietnam have enjoyed strong economic cooperation. Driven by our close partnership and rapid economic development, bilateral trade and investment have grown exponentially. In 2023, bilateral trade reached $13.8 billion, exceeding the target of $10 billion set by the leaders of both countries. Two-way investment has also reached unprecedented levels.

Denny Abdi, Indonesian Ambassador to Vietnam

This year is an important one for Indonesia-Vietnam bilateral relations, highlighted by President Joko Widodo's state visit in January. A key outcome of the visit was the commitment to promote cooperation and collaboration to achieve the shared vision of becoming high-income countries by 2045. As a follow-up to this visit, our ministers have met to discuss the way forward, including setting a new bilateral trade target of $18 billion by 2028, reflecting our success in achieving the previous target.

Achieving this new target relies on promoting cooperation in five key sectors, which are considered priorities for Indonesia-Vietnam economic cooperation: agriculture, fisheries, renewable energy, the digital economy, and high-tech industries.

With populations of more than 280 million and 100 million people respectively, food security is a key foundation of economic development for both Indonesia and Vietnam. As developing countries, the agriculture and fisheries sectors play important roles in ensuring national food security. Cooperation between the two countries should focus on supporting each other and finding ways to increase productivity.

Moreover, as two of the world's largest producers of rice and fish, cooperation between Indonesia and Vietnam is essential not only for domestic sufficiency but also for regional food security.

Amid rapid economic growth, both countries must address sustainability issues. As industrialisation can threaten air quality and environmental sustainability, Indonesia has set a net-zero emissions target by 2060, while Vietnam aims to achieve this by 2050.

Both countries are currently exploring ways to reach these targets and accelerate the transition from fossil fuels to renewable energy. Although the commitment to reach these targets exists, implementation remains a challenge. Therefore, both countries need to intensify efforts in energy transition, including exchanging best practices and sharing experiences, particularly under the Just Energy Transition Partnership framework, in which both are partners.

Additionally, the availability of renewable energy and efforts towards energy transition are now key factors in attracting quality investment, as investors increasingly consider environmental, social, and governance criteria when making decisions.

Given the strong working-age populations in both countries, cooperation in the digital economy presents significant potential. Startups are rising rapidly in both nations, and this positive momentum should be harnessed effectively. A more integrated digital economy between Indonesia and Vietnam can promote cross-border payments and transactions, thereby accelerating economic activities between the two countries.

To fulfil their aspirations of becoming developed economies, it is crucial for both countries to focus on producing high value-added products based on technology. Both Indonesia and Vietnam are developing their own areas of expertise. For instance, Vietnam's electric vehicles are already entering Indonesia's market, while Indonesia's animal pharmaceutical industry has recently completed building the largest animal vaccine factory in Vietnam. The two countries should complement each other and work together to build a regional single production base in Southeast Asia.

Looking beyond 2024, the prospects for Indonesia-Vietnam economic relations remain bright. The inauguration of Vietnam’s President To Lam in May, followed by Indonesia's new president coming up in October, is expected to invigorate cooperation between the two countries. Indonesia's President-elect is likely to continue the success of existing programmes while adding extra focus on other sectors, such as promoting human resource development from an early age. These additional areas will create new avenues for Indonesia-Vietnam cooperation.

Moving forward, by capitalising on the demographic bonus, the shared vision of becoming high-income countries, and the passion of the people, I am optimistic about the future of Indonesia and Vietnam. In 2025, the two nations will celebrate an important milestone: 70 years of diplomatic relations. This will be a great opportunity for both countries to strengthen their partnership to new heights.

Within the region, the increasing influence of Indonesia and Vietnam will be a key foundation for ASEAN in maintaining its stability, centrality, and unity. Promoting stability and security must remain a top priority for both countries, both bilaterally and within the context of ASEAN. In this sense, I am confident that Indonesia and Vietnam will continue to be fully committed to contributing to peace, stability, and prosperity in the ASEAN region.

Vietnam and Indonesia share experience to develop eco-industrial park Vietnam and Indonesia are sharing their experience in the development of eco-industrial parks as part of the Global Eco-industrial Parks Programme (GEIPP).

Vietnam, Indonesia eye cooperation in EV development, food security, manpower Indonesian Industry Minister Agus Gumiwang Kartasasmita has invited Vietnam to cooperate in the development of several sectors, including the electric vehicle (EV) industry, green industry, food security, research and development, and human resources.

Indonesia seeks trade deal with EU to compete with Vietnam Indonesia is urgently pursuing a trade agreement with the European Union, according to newswire JakartaPost. This initiative, according to Indonesian Economic Affairs Coordinating Minister Airlangga Hartarto, is largely motivated by the desire to level the playing field with Vietnam, which currently benefits from the EU-Vietnam Free Trade Agreement (EVFTA).

Vietnam to benefit as Indonesia increases rice import volumes Vietnam is set to capitalise on Indonesia's record-high rice import volumes, as the rising demand from the neighbouring country opens up significant export opportunities for local producers.