Revisiting Indonesia-Japanese Economy Relations: The Significance and Prospects for
Sustaining Economy Growth between Two Countries in the Era of Susilo Bambang Yudhoyono
2004-2013
This paper examines the significance and prospects of Indonesia economy growth through a multilayered study of Indonesia-Japanese relations since the era of Susilo Bambang Yudhoyono. By
examining these relations, I clarify the impact by which economic cooperation trigger the economy
growth between both countries and the constraints of Indonesia-Japan to deepen their economy
relations. The time period studied in this paper includes the economic relations between both
countries and the performance of Indonesia economy growth since 2004, the effort of both countries
for deepening the relations between both countries and the result of their performance and policy
options for enhancement of deepening both countries relation in the next following year. I use two
major research strategies: (1) a quantitative analysis of country-level data, and (2) a qualitiative
method from various sources. The data will be collected from newspapers, webpage and published
reports. This paper challenges the argument that both countries have utilized the relations effectively.
Some view Indonesia has been aggrieved by this relations and Japan is colonized Indonesia by its
massive investation, but in fact, both countries cannot use this relations for expanding mutual benefit
opportunities that exist on the field. By propelling their resources in an array of bureaucracy,
infrastructure development and relations between societies, an economy growth between both
countries can be sustained.
An Overview of Indonesia-Japanese Economic Trends
Since the last time, Indonesia and Japan relations have faced up-and-down process for their relations.
Both countries have built their relations from the colonization period until now. As a leading country,
Japan sees the great potency of Indonesia with the vast amount of natural and human resources. It
becomes the reason for Japan to build relation with Indonesia for building beneficial relations with
them.
Until now, Japan keeps its stance for sustaining their relations with Indonesia. In the first quarter of
2013, Japan had contributed as the largest sources of FDI to Indonesia. Japanese auto companies had
pumping its investation for $1.2 billion. This record followed by South Korea with $800 million, and
Singapore with $600 million.1 With these investations, which comes from big power, it gives us an
insight that Indonesia have to be ready for being a best place for investor to put their capital in
Indonesia.
As a new emerging country, Indonesia is able to sustain its economy growth after the global
recession. Indonesia still grew at a healthy rate of 4,5% annually in 2009, making Indonesia one of the
1
Sentana, I Made & Silaen, Linda 2013, Indonesia Draws Record Foreign Direct Investment, media
release, 22 April, The Wall Street Journal, viewed 9 July 2013,
<http://online.wsj.com/article/SB10001424127887324874204578438160947895702.html>.
fastest growing economies in the G20 League of Nations. Even this was a step down from the 6. 1%
growth recorded the year before, but it confirms Indonesia’s status as a premier emerging economy. 2
In another side, Japan faced uneasy situation with their stagnant economy growth. The government
reported that growth for all of 2012 was 1.9 percent, after a 0.6 percent contraction in 2011 and a 4.7
percent increase in 2010 and a 5.5 percent contraction in 2009.3 After the premiership of Shinzo Abe,
Japanese Economies move forward into betterment with it growth at an annual rate of 0.2% in the
final three month of 2012, which is much better than the negative 0.4% that initially reported by
Japan’s Cabinet Office. 4
The conditions between both countries have a contrast situation. Indonesia can sustain its economies
until 4-6%, which has potency for keeping its growth. In another side, Japan keep stuck for the
recession they face until the premiership of Shinzo Abe. In his era, Japan has a slightly growth below
1%, which gives a hope for the new rise of Japan. With its different situation, Japan and Indonesia
should consider the chance for deepening their relation with each other.
Indonesia will become a best place for Japan for putting their investment. After the recession that
Japan faced in their country, they have to see out the chance for enlarging their economy capacity
outside their country. The last official census in 2010 informs us that there were 237,424,363 people
living on its 17,508 Islands. 5 McKinsey report for Indonesia capability will give us proves for its
potency.6
Indonesia has an attractive value proposition. Over the past 20 years, labor productivity
improvements, largely from specific sectors rather than a general shift out of agriculture, have
accounted for more than 60 percent of the country’s economic growth. Productivity and
employment have risen in tandem in 35 of the past 51 years. And unlike typical Asian “tiger”
economies, Indonesia’s has grown as a result of consumption, not exports and manufacturing.
The archipelago nation is also urbanizing rapidly, boosting incomes. By 2030, Indonesia will
2
Thomas White International 2013, Japan: Change Overcoming Chaos, Thomas White International
Website, viewed 8 July 2013, < http://www.thomaswhite.com/world-markets/indonesia-change-overcomingchaos/>.
3
The Associated Press 2013, Japanese Economy Shrinks and Remains in Recession, media release,
13 February, The New York Times, viewed 9 July 2013,
< http://www.nytimes.com/2013/02/14/business/global/japanese-economy-contracts-andremains-in-recession.html?_r=0>.
4
Riley, Charles 2013, Japan’s Economies begin to grow again, media release, 8 March, CNN Money,
viewed 9 July 2013,
< http://money.cnn.com/2013/03/07/news/economy/japan-gdp/index.html>.
5
World Population Review 2013, Population of Indonesia 2013, World Population Review Website,
viewed 9 July 2013, < http://worldpopulationreview.com/population-of-indonesia/>.
6
Budiman, A, Dobbs,Richard, Oberman,Raoul, Rossé,Morten & Thompson,Fraser 2012, The
archipelago economy: Unleashing Indonesia’s potential, media release, September, McKinsey Global
Institute, viewed 10 July 2013, < http://www.mckinsey.com/insights/asiapacific/the_archipelago_economy>.
have added 90 million people to its consuming class—more than any other country except
China and India. (McKinsey, 2012)
In another side, Japan will become a best partner for developing the economy in Indonesia. According
to Hiroyuki Odagiri, Akira Goto and Richard R.Nelson, Japan’s economic will become an example
for less advanced economics.7
Japan’s economic development remains a model for many technologically less advanced
countries which have not yet mastered modern technology to organizational forms.
Knowledge of Japanese technological and economic history can contribute importantly to our
understanding of economic growth in the modern era. ... The Japanese were extraordinarily
creative in searching out and learning to use modern technologies, and the book investigates:
the emergence of entrepreneurs who began new and risky business; how the business
organization evolved to cope with changing technological conditions; and how the managers,
engineers, and workers acquired organizational and technological skills through technology
importation, learning-by-doing, and their own R&D activities. (Hiroyuki Odagiri, Akira Goto
and Richard R.Nelson ,1996)
Cooperation between both states will bring a mutual benefit. They need each other for maximizing its
potency to the fullest. This target would be achieved, if both countries can maintain its respect to one
another, without trying to gain at a loss to another party. Preserving trust and respect will ease both
countries to explore opportunities for taking the benefit from this relation.
The Bilateral Economic Relationship and the Shifting of Indonesia and Japanese Policy
Priorities
In January-August 2012, the amount of Japanese export to Indonesia is $14.03 billion, which are 30.
44% of their total export. However, the amount of this export is far below with China, which had been
exported for $98.6 billion.8 The total of Japanese export to China as the largest partner is seven times
than Indonesia. Japan had imported good and service too from Indonesia, which amounted for $22.65
billion9. Indonesia gain the profit with the amount of $8.62 billion. In a glance, we could see that
Indonesia is getting the benefit for this trade than Japan.
7
Goto,A, Nelson,R & Odagiri,H 1996, ‘Technology and Industrial Development in Japan: Building
Capabilities by Learning, Innovation and Public Policy’, Oxford Scholarship Online, viewed 10 July
2013, <
http://www.oxfordscholarship.com/view/10.1093/acprof:oso/9780198288022.001.0001/acpro
f-9780198288022>
8
Trade Attache Reports, EG 2012, Perkembangan Perdagangan Indonesia-Jepang Periode: JanuariAgustus 2012, NCES-2003-036, Ministry of Trade, Jakarta, viewed 11 July 2013,
<http://www.kemendag.go.id/en/view/trade-attache-report/111/2012/8>.
The total export of Japan to USA is $94,32 billion, which increase from 18,9% compared to 2011.
South Korea is $41,39 billion, Taiwan: $30,76 billion, Thailand $28,54 billion, Hongking $27,0
billion and Singapore $16,25 million.
9
Ibid;
Even Indonesia is ranked eight for its export and import to Japan, Indonesia still can maximize its
potency for gaining more profit with Japan. There are a lot of field that both parties can utilize for
getting the maximum gain.
Both countries had conducted several agreemen to cooperate each other. The author will explain this
section into two parts for analyzing their relation.
Indonesia-Japan Free Trade Deal
In 2008, the agreement between Indonesia and Japan (Indonesia-Japan Free Trade Deal) take a
significant impact towards the relations between the countries.
The trade deal, for which negotiations began in July 2005 and concluded in August last year,
eliminates tariffs on approximately 92 percent of trade between the two nations. In the first
phase of the agreement, Tokyo will remove 80 percent of its tariffs, while Jakarta will remove
58 percent. Over the next 10 years the two countries will make further reductions of 10
percent and 35 percent, respectively. Abolishing tariffs is expected to boost Japanese exports
of steel, cars, automotive components and electronic goods to Indonesia. Meanwhile, Tokyo is
reducing tariffs on many Indonesian agricultural products and removing all duties on most
clothing, footwear and timber products. (ICTSD, 2008)10
Abolishing tariffs will bring a risk to both countries. Running this policies will become a “doubleedge sword for both countries.” There are some. reason that this free trade deal is bringing so may
risk. Both countries will leave an opportunity for boosting the good and service that they can develop.
The author will take an example from rice in Japan.
The Japanese government is trying to encourage the use of rice flour to make bread and
noodles to stimulate demand and encourage more people to grow rice. .... Using rice in this
way helps rice farmers find markets for their crops and increases Japan’s efforts to be more
self-sufficient in food production. (Jeffrey Hays, 2009)11
With Japanese technology, they could produce a good-quality agricultural product and fulfill the
needs of people. In another side, Japanese government could export its product, except rice to the
international market. Buying agricultural products will waste a lot of time and money. Japanese
government also loss an oppurtunity to provide job for 1.8 million people in this country.12
10
Bridges Weekly Trade News Digest 2008, ‘Indonesia-Japan Free Trade Deal Takes Effect,
International Centre for Trade and Sustainable Development, 9 July, viewed 11 July 2013,
< http://ictsd.org/i/news/bridgesweekly/12609/
11
Hays, J 2013, Rice Farming in Japan: History, Paddies, Planting, Harvesting and Mechanization,
media release, January, Facts and Details, viewed 12 July 2013,
<http://factsanddetails.com/japan.php?itemid=939&catid=24...159>.
12
Ibid;
In another side, Indonesia is the major producer of rice, until the presidency of Suharto. Even
Indonesia cannot achieve self-suffiency as happenned in the last time, Indonesia still have a potency
for growing rice. In 2009, Indonesia has a chance for exporting as much as two million tons of rice.
Free trade policies will disadvantage Indonesia for closing Indonesia oppurtunity to self-suffiency,
which triggers domestic shortage and out of control inflation. 13 Indonesia is not ready enough for
facing FTA with Japan.
Although farmers appreciate the idea of selling their rice crops on the international market,
governments have always feared a domestic shortage and our of control inflation. Last year,
Indonesia imposed a law preventing farmers from selling crops at export prices. Instead,
farmers were forced to sell at local prices which were half of the export prices. Furthermore,
domestic prices were given price ceilings, artificially forcing prives even lower, because of
these low prices, many rice farmers switched to a higher profit producing crop, further
exasperating the rice shortage. (Asia Economic Institute)
FTA has an impact for competition between both countries. Indonesia and Japan are both countries,
who eat rice as a primary food. If both countries is using FTA for rice, it will create a harsh
competition between them. Japan will get the benefit for its quality from Indonesia market. In another
side, Indonesia will be disadvantage to protect their own farmer as a major producer of primary food.
Japanese government is still reluctant to open its market for Indonesia product. Sutton argues that
Japan’s new policy undermines faithfulness to the WTO because trade agreements are discriminatory
and Japan is reluctant to open its rice market beyond Uruguay Round commitments.14 Opening Free
Trade Area will bring a risk for some fundamental economy sector to both states.
Considering the risk that will be brought by both countries by FTA, they needed to strengthen the
potency of their own country. It can reduce the capability of developing their own people. Even if the
tax will be reduced gradually for some goods and services, in the next following years; both countries
need to revisit the benefit that will come for this relation, without bringing a risk to their own
economy.
Relations between Non-State Actors
Bilateral relations between both countries are not only being conducted by state. Non-state actors have
a very important part for deepening relations between them. There are around of 1278 Japanese
companies working in Indonesia in every field, such as: automobile, raw materials, LNG (Liquefied
Natural Gas), manufacturing, insurance and trading companies in oil. In 2010, there were 11,701
13
Asia Economic Institute, Indonesia, from rice importers to rice exporters, viewed 18 July 2013, <
http://www.asiaecon.org/special_articles/read_sp/12048/0/14>.
14
Suttion, M, ‘Japanese Trade Policy and ‘Economic Partnership Agreements’: A New Conventional
Wisdom ’ , pp. 17. < http://www.ritsumei.ac.jp/acd/cg/ir/college/bulletin/e-vol4/sutton.pdf>
Japanese registered at their embassy and consulate. Japanese government will participate in 5 of 17
projects in MP3EI.15
They conduct their relations, by participating in some associations, such as: Gabungan Industri
Kendaraan Bermotor Indonesia (the Association of Indonesia Automotive Industries), Asosiasi
Produsen Peralatan Listrik Indonesia (Indonesian Electrical Manufacturers Association), etc.
1. GAIKINDO16
GAIKINDO had been established since 1969. They have a vision to become a world-class,
professional and independent automotive organization, which plays an active role as the government’s
equal partner in developing the industry to be adept at competing in the international market.
This organization helps Indonesia for increasing its competitiveness for automotive industries in the
world. This group has their own strategy for expanding its industry in Indonesia, such as:




To organize and support international events to seek global attention and promote trade and
investment opportunities in the country
To encourage, promote and protect the interests of the automotive industry in Indonesia
To act as a means of communication among its members for the strengthening and promotion of
their common interests
To collect, compile and collate information on issues affecting the interests of the automotive
industry in general and members in particular and to later distribute such information in the form
of reports or statistics to members.
In 2005, GAIKINDO became a permanent member of the International Organization of Motor
Vehicle Manufacturers, which is also known as the Organisation Internationale des Constructeurs
d’Automobiles (OICA) whose headquarter is in Paris. The world’s automotive organization endorses
Indonesia International Automotive Motor Show staged by GAIKINDO. And in 2008, Sales broke
new record 603,774 units amidst the global economic turbulence. Export also broke new record with
100,000 units.
2. The Association of Electronic and Electrical Home Applicants Industries of Indonesia17
This association has been established since 1976 by some companies, which produce electrical panel,
15
Adamrah, M 2011, ‘Bilateral relations: Indonesia, Japan ‘close friends’ in economy, disaster, The
Jakarta Post, 12 July, viewed 12 July 2013,
<http://www.thejakartapost.com/news/2011/07/12/bilateral-relations-indonesia-japan-%E2%80%98closefriends%E2%80%99-economy-disaster.html>.
16
GAIKINDO, GAIKINDO History, Vision and Mission, viewed 12 July 2013, <
http://gaikindo.or.id/index.php?option=com_content&task=blogcategory&id=15&Itemid=47
>.
17
Indonesian Electric Manufacturers Association 2008, History of APPI, APPI Website, <
http://appi-electric.co.id/history1.htm>.
with 16 companies as their member. The product that they sold is starting from the smallest fuse
boxes to the control panels and medium voltage electrical panel, which are seemly, complicated. Their
member is consisting of State Owned Companies, Foreign and Domestic Capital Investment
Companies and National Private Non-facility with investment more than 1 trillion Rupiah and absorb
more than 35,000 manpower.
APPI is under the supervision of the Directorate General Basic Metal Machine Industry and
Electronics and The Directorate General Multifarious Industry Department of Industry and is member
of the Chamber of Commerce of Indonesia.
The role of non-state actor in building relations between both countries is significant. Japanese
corporation are working with various association to expand their market in Indonesia. With these
opportunities, Japan and Indonesia could maximize underlie in their way.
Prospects and Policy Options to Deepen Economic Ties
The Japanese and Indonesian government relations have entrenched very deeply into our country.
Japan is the biggest investor and one of the most important party, which develop our country. In
another side, Japan need Indonesia for enlarging the market that had been opened by them.
Indonesia and Japan has some of policy option for maintaining their mutual benefit relations. This
paper will offer some policy that we can learn from past history and present.
Maintaining the liberalization of trade good and service
Indonesia and Japan are the member of World Trade Organization, which their activities are
negotiating the reduction or elimination of obstacles to trade (import tariffs, other barriers to trade)
and agreeing on rules governing the conduct of international trade (e.g. antidumping, subsidies,
product standards, etc.)18. Cutting off the trade will always be the best option for them to develop their
own economy.
Indonesia has bind themselves into tariff reduction with another organization. Since 1 January 2010, 6
countries in ASEAN (Brunei Darussalam, Indoensia, Malaysia, Philippines, Singapore and Thailand)
can import and export most of good across their border. These 6 countries were taking part in
Common Effective Prefential Tariffs for Asean Free Trade Area (CEPT-Afta) 19 And Indonesia is also
18
World Trade Organization 2013, About the WTO - a statement by the Director General, WTO
Website, viewed 12 July 2013,
<http://www.wto.org/english/thewto_e/whatis_e/wto_dg_stat_e.htm>.
19
Inquirer 2009, ‘Zero Tariffs for Asean-6 starting January: Milestone in free trade in regional bloc’,
Inquirer Global Nation, 31 December, viewed 12 July 2013,
<http://globalnation.inquirer.net/news/breakingnews/view/20091231-244870/Zero-tariffs-for-Asean-6-startingJanuary-1
committed in APEC with non-binding commitments, which is seeking to achieve free and trade
investment by 2020 for developing economies.20
With this fact, Indonesia cannot refrain themselves for their comitment to the international society.
The things that Indonesia need to do is preparing themselves for catching up with economic relations
to another country.
Japan is quite similar with Indonesia with their commitment to international society. Japan joined
APEC, WTO and conducted Free Trade Agreement with ASEAN. It means that both Indonesia and
Japan join the same activity and they can work more effectively. However, the situation between both
countries is different with each other. Japan is more developed in Indonesia, especially with their own
technology and human resources. Indonesia need to strengthen their ‘foundation’ before they can
cooperate effectively and efficiently with Japan.
There are three foundations, which is important that needed to be concern between both states to
create a mutual benefit with them.
a. Infrastructure development
Infrastructure development will be very essential factor that help Indonesia and Japan for boosting
their economy growth. Without a good infrastructure, Indonesia would be less likely hard to become
the best place for investation. According to Malaysia External Trade Development Corporation,
Indonesia commits for spending their money in infrastructure projects. 21 This data shown an increase
more than last year, where our government only budgets for 7,5% of its national budget.22
In the 2013 budget bill, the commitment is reflected in the growing allocation of capital spending
on infrastructure projects reaching Rp193.8 trillion or 11.76% of the state spending of Rupiah
1,657.9 trillion (US$170.9 billion) or an increase of 14.9% from last year. However, the House of
Representatives (parliament) agreed to rise spending on infrastructure for this year’s budget, in an
apparent move to advance much-needed building projects including roads, bridges and
airports. The government’s capital spending, which includes funds for construction of seaports,
rose 28 percent to Rupiah 216 trillion (US$23 billion) in 2013, higher than the government’s initial
proposal of Rupiah 194 trillion (US$20 billion). (Matrade, 2013)
Infrastructure development will help entrepreneur from our country and foreigner to increase their
capacity for gaining more profit. Without adequate infrastructure, It will be very harshly for them to
build their own business. In 2012, the Indonesian Chamber of Commerce and Industry (Kadin) stated
20
Woods, JML 1995, ‘Achieving the 2020 Vision – The Future of APEC and its Impact on World
and Regional Trade’, paper presented to 22nd International Trade Law Conference , Canberra, 27-28
October.
21
Malaysia External Trade Development Corporation 2013, Indonesia to boosts Infrastructure
Investment in 2013 Budget, The Official Portar of Matrade, viewed 12 July 2013,
<http://www.matrade.gov.my/en/about-matrade/media/market-alerts/market-alerts2013/2769-indonesia-to-boosts-infrastructure-investment-in-2013-budget-march-2013>.
22
Wihardja, MM 2012, Indonesia and the G20: a door half open, media release, 29 June, East Asia
Forum, viewed 13 April 2013, <http://www.eastasiaforum.org/2012/06/29/indonesia-and-the-g20-a-doorleft-half-open/ >.
that Indonesia was reaching 24% of the total GDP, or 1820 trillion per year for logistic cost, which is
the highest logistic cost in the world.23 Building infrastructure will be very essential to keep Indonesia
productivity growth in the world and increase its competitiveness for investation with another state in
the world.
b. Human resources
Increasing the human resources quality is a must for Indonesia. According to the World Bank,
Indonesia was reported at 93% in 2009 for literacy rate 24, which is significant to search for quality
human resources. However, this rate still below standard, when only a third of Indonesia students
complete basic schooling.25
Indonesia recently ranked last in a landmark education report that measured literacy, test
results, graduation rates and other key benchmarks in 50 nations. Only a third of Indonesian
students - in a country where 57 million attend school - complete basic schooling and the
education system is plagued by poor teaching and corruption. (Al Jazeera, 2013)
Providing a better education for Indonesian people is very essential to Indonesia development.
Indonesia needs to increase the quality of education inside the country, where it will decrease the
phenomenon of “brain drain” and “brain gain” to another country. In another side, it will bring a
benefit for Japanese government and companies to work together with Indonesia. Human resources
will accomodate both parties for deepening their relations to build both countries economy sector.
c. Balanced trade
Indonesia and Japan are now liberalizing its economies. This action has to be conducted balance with
each other as important partners. Liberalizing economies does not mean both countries need to sell
their product without concern to develop the potency in their own country.
PT Astra Honda Motor is one of the good example for conducting a balanced trade in Indonesia.
Since 1971, this company only prefabricates the component from Japan, which they did not produce
by Indonesian labor. In 2001, the company produced motorcycle component and motorcycle in
23
Primiana, I 2012, ‘Logistic cost in Indonesia most expensive’, The Antara News, 14 February,
viewed 12 July 2013,
< http://antara.co.id/en/news/79889/logistic-cost-in-indonesia-most-expensive>
24
World Bank Data 2011, Literacy rate, adult total (% of people ages 15 and above), World Bank
Data, viewed 16 July 2013, <http://data.worldbank.org/indicator/SE.ADT.LITR.ZS>.
25
Al Jazeera 2013, Educating Indonesia, Al Jazeera website, viewed 16 July 2013,
<http://m.aljazeera.com/story/201321965257154992>.
Indonesia26 Producing product in our country will help Indonesia for creating goods and services with
their capacity. In this process, Japanese traded technologies in Indonesia for producing products and
Indonesia trade human resources for increasing the profit. Mutual benefit between both countries will
help them to build both countries’ economies.
For deepening Indonesia-Japanese relations, Japanese government could build other companyies by
using Indonesia human resources. It can be conducted by sharing holdings by both countries –it can
be private companies or public companies, which the profit can be shared to both of the countries –
state or non state actor. Japanese government could increase their profit by opening new companies
and Indonesia could participate in it as a shareholder to increase the amount of Indonesia MNCs.
Regulating both countries trade policies
Trade policies will be a very important case for conducting a fair relation between both countries.
Regulations between both countries will determine the profit, which will be gained by them. Without
a fair trade policy, both countries cannot utilize their relation better for the next following years.

Removal of tariff
As discussed before, removing the tariff between both countries will bring a positive and negative
side for economy sector in their countries. There will be a “zero-sum game” for both countries. In one
sector, one country will get a benefit, but in another side there will be a party who get the loss for this
policy.
For example, Indonesia government has an obligation for imposing a 20% tariff per January 2013 for
vehicles with modified engine capacity, which was originally 3.0 liters, reduced to 1,5 liters. Until
April 2013, Indonesia still impose the outdated tariff of 28.1 % automotive industries.27 This policy is
very significant towards Japanese automotive industries in Indonesia, where it can reduce the income
for their companies.
Removing tariff will decrease the amount of revenue to our country. Indonesia government have an
option to raise existing tax for increasing its revenue.28
Existing taxes need to be raised, tax bases broadened, collection and administration improved, and
tax evasion eliminated. But this is not as simple as it sounds. Indonesia has a very low tax to-GDP
ratio compared with other countries with a similar level of development. (UNCTAD, 2005)
26
PT Astra Honda Motor 2010, Tentang AHM: Sejarah, Website, viewed 16 July 2013,
<http://www.astra-honda.com/index.php/about>.
27
Teresia, A & Thertina, M 2013, ‘Japan’s Objection Over Import Tariff’, Tempo Business, 19 April,
viewed 16 July 2013,
< http://www.tempo.co/read/news/2013/04/19/056474557>.
28
United Nations Conference at Trade and Development 2005, Trade Policies at the Crossroads: The
Indonesian Story, United Nations, Geneva.
Conclusion
Both countries relations has a promising future to be explored by economic partnership. With the
different situation that both states have, both countries have a chance for building a mutual trust to
deepen their relationship. Japanese government could utilize its stregth point to develop Indonesia as a
a partner by putting investation and creating more companies for trading its technology and
experience. In another side, Indonesia could utilize its relation to increase the capacity of their human
resources and putting their step for being a place for investation.
However, Indonesia need to put their effort for increasing the quality of infrastructure development
and human resources. Both government need to promote a fair trade policy between them and
consider the effect of FTA to both governments. With considering this area, the author believe both
countries could achieve a more significant relations between them.
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