Jakarta (Indonesia Window) – The Indonesian and Japanese governments have agreed to enhance cooperation on innovation and sustainable economy through the Initiative Public Private Track 1.5 forum.

The cooperation proposal was agreed by Indonesian Coordinating Minister for Economic Affairs Airlangga Hartarto when meeting with Japanese Minister of Economy, Trade and Industry Koichi Hagiuda here on Tuesday (Jan. 11).

Through the Public Private Track 1.5: Japan Indonesia Co-Creation Partnership for Innovative and Sustainable Economic Society, the two countries will increase cooperation in regional and global supply chains, infrastructure developments, digital economy, human resource developments, and sustainable industries which are Indonesia’s development program priorities.

The bilateral forum is also expected to be an opportunity to promote the development of Micro, Small and Medium Enterprises (MSMEs), as well as the digital economy as Indonesian MSMEs have grown to become the main supporting sector of the national economy with a contribution of more than 60 percent of GDP (Gross Domestic Product) and absorb more than 90 percent of the workforce in 2020.

In addition, another sector that is also very significant for Indonesia is the digital economy. Indonesia’s e-commerce’s value is projected to continue to increase to 32 billion U.S. dollars by 2025 with an annual growth rate of 54 percent.

During the meeting, the two ministers also discussed opportunities for cooperation in Indonesia's G20 Presidency, which in 2022 will carry the theme 'Recover Together, Recover Stronger'.

Airlangga invited the Japanese government to cooperate and support Indonesia's initiatives to succeed the G20 Presidency agenda.

Furthermore, Airlangga and Hagiuda also discussed access to trade between the two countries, as well as efforts to intensify cooperation in the region, especially in the ASEAN forums and Indo-Pacific countries.

The total trade between Indonesia and Japan in January to November 2021 was valued at 28.5 billion U.S. dollars, or 31 percent higher than 21.7 billion U.S. dollars in the same period in 2020.

Meanwhile, the value of Japan's investment to Indonesia during January to September 2021 was recorded at 1.7 billion U.S. dollars with 6,794 projects, putting Japan as the fourth largest investor in the Southeast Asian country.

“Several key infrastructures in Indonesia have been built in collaboration with Japan, including the Jakarta MRT (mass rapid transit) and Patimban Port (Subang district, West Java province). I believe that new dialogues will be able to further strengthen and expand bilateral cooperation in this sector," Airlangga said.

Reporting by Indonesia Window