The business forum between Indonesia-Korea marks an increase in closeness and cooperation on the financial sector between the countries, which is expected to further promote bilateral cooperation.

Jakarta (Indonesia Window) – The Indonesian Embassy in Seoul and the Financial Supervisory Services (FSS) of South Korea, held a business forum in commemoration of the 50th anniversary of bilateral diplomatic relations on Feb. 20, 2023.

The business forum entitled ‘Developing Closer Friendship and Stronger Partnership through Enhanced Financial Cooperation’ was supported by Indonesia’s Financial Services Authority (known as OJK) and the Overseas Branch Office (KCLN) of state bank Bank Negara Indonesia (BNI) in the South Korean capital of Seoul, the Indonesian Ministry of Foreign Affairs said in a written statement as quoted by Indonesia Window on Tuesday.

In his remarks, the Indonesian Ambassador to South Korea, Gandi Sulistiyanto, stated that in addition to maintaining economic growth and political stability, the Indonesian government will continue to build an inclusive and strong financial services sector.

The ambassador highlighted promising economic growth in Indonesia which was recorded at 5.31 percent last year as well as a significant increase in the realization of foreign investment and total trade with the world, which reached 34 percent and 23.7 percent respectively.

Indonesia's current economic strength, he continued, is the main foundation for Korean financial companies to believe in Indonesia as their main business expansion destination.

"This business forum marks an increase in closeness and cooperation between the Indonesian and Korean financial sectors, which will further encourage our bilateral cooperation," Ambassador Gandhi noted.

Representing the South Korean government, FSS Senior Deputy Governor Lee Joon Soo emphasized that Indonesia is currently the fourth largest market for Korean financial companies.

"This business forum can help Korean companies better understand the policies and supervision carried out by the OJK so that they can position themselves appropriately to contribute to the development of the financial industry and consumer protection in Indonesia," he said.

The partnership between Indonesia and South Korea has grown to a higher level, he said, inviting more Indonesian financial companies to establish business in Korea where FSS would proactively support them.

Chairman of the Board of Commissioners of the OJK Mahendra Siregar attended the event as the keynote speaker, and explained a number of the authority’s policy priorities in 2023.

According to him, the policy priorities include strengthening financial services through regulations, supervisions, educations, and consumer protections.

In addition, the economic growth must be pursued by optimizing the role of the financial sector, said Mahendra, adding that another priority is improving services and strengthening the OJK capacity through accelerating integrated licensing processes and increasing coordination with all stakeholders.

The OJK chairman also underlined the approach taken by the authority to ensure the creation of sustainable financing to spur economic growth.

"The financial regulatory sector must play an important role in providing incentives and financial support for the Indonesian government's efforts to develop downstream industries, such as those of nickel, to support the development of battery-powered electric vehicles," he said.

In the talk show session, the OJK chairman and Ambassador Gandi answered some of the concerns of a number of South Korean financial companies by emphasizing ongoing improvement efforts including those aimed at facilitating the licensing process for foreign professional workers in the financial sector in Indonesia and discussing prospects for financial products that can support growth of the downstream industries, including those producing cars and motorcycles in Indonesia.

Meanwhile, Lee Joon Soo underlined the readiness of the FSS to collaborate and share Korea's experiences in developing the financial sector with Indonesia.

Ardi Ferdiansyah, Acting Chief Executive of BNI’s Overseas Branch Office in Seoul closed the forum, while discussing Indonesia-Korea relations which aim to expand economic cooperation between the two parties beyond investment and trade towards more advanced industries including the financial industry.

According to Ardi, the direction of this cooperation is expected to increase the role of financial companies of the two countries to contribute more significantly to economic development in Indonesia and South Korea.

The Indonesia-Korea business forum on financial cooperation is the beginning of a series of activities in commemoration of 50 years of diplomatic relations between Indonesia and South Korea, especially in the economic field, organized by the Indonesian Embassy in Seoul.

In the future, there will be more activities in commemoration of the 50th anniversary of Indonesia-South Korea diplomatic relations that will be carried out throughout this year, including investment and trade forums, talk shows, sports activities, book launches, and gala dinners.

Indonesia's stable financial sector and investment environment have attracted foreign companies to enter the Indonesian market. Large corporations from South Korea, such as Hyundai Motor, LG and Lotte Chemicals, have entered and are doing big business in Indonesia.

South Korea is listed as the 7th largest investor in Indonesia in 2022, with a total realized investment of 2.29 billion U.S. dollars, or an increase of 40.06 percent from realized investment in 2021.

South Korean financial companies also chose Indonesia as their business expansion destination. There are 31 South Korean financial services companies in Indonesia, which are engaged in the banking, insurance, securities and asset management sectors.

Six South Korean banks are fully operational in Indonesia, namely Hana Financial Group, KB Bank, Woori Bank, Shinhan Bank, IBK, and APRO.

Other South Korean financial services companies such as Mirae Asset and Hanhwa Insurance have also achieved successes in Indonesia, so they are often followed by other Korean companies to develop their businesses in Indonesia.

This year is also the year in which Indonesia begins the ASEAN Presidency which was officially opened by Indonesia’s President Joko Widodo in Jakarta in January 2023.

The Indonesia-Korea business forum was held at Dragon City Convention in Seoul and was attended by around 100 invited guests consisting of leaders and representatives from Korean financial institutions including banks, asset management companies, insurance companies, and securities, with many of them already operating in Indonesia.

Reporting by Indonesia Window