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Toward Better Cooperation with Indonesia under the New Southern Policy Plus

  • Author Sungil Kwak
  • Series223
  • Date2021-10-07
Last year the Republic of Korea (ROK) announced the “NSP Plus” – an upgrade version of the New Southern Policy (NSP) – to better respond to newly unfolding changes in the international environment. It is necessary to talk about how to promote NSP Plus with each ASEAN counterpart.

COVID-19 is different from the past shocks we have experienced. Unlike previous crises, one of the most troubling changes is that lost jobs may not be recovered permanently because of the structural changes intertwined with the COVID-19 shock. The economic shock has led to massive layoffs, but the economic recovery will only create fewer jobs than before due to digital-based investment and automation.

As most Southeast Asian countries, including Indonesia, serve as production bases for multinational corporations, middle-skilled and middle-wage jobs could disappear even sooner than expected. Without thorough preparation for the loss of these jobs, inequality will worsen on multiple dimensions – not only on the economic front, but in political and social terms, and so on. We need, thus, both re-skilling and up-skilling programs for the workers in a hurry. This issue is covered by one of the seven NSP Plus initiatives. Industrial advancement in Indonesia requires more high-quality human resources than simple production workers. The high-quality human resources are also an innovation engine that can avoid the so-called “middle-income trap.”

In Indonesia, the ICT and healthcare sectors grew while most industries remained sluggish due to COVID-19 last year. The growth of the information and communication field is remarkable. A large number of investments by U.S. tech giants in Indonesia demonstrate the growth potential of the digital economy in Indonesia despite the spread of COVID-19. In response to this potential seen in Indonesia, the NSP Plus initiative “Cooperate in future industries for common prosperity” emphasizes cooperation in areas related to the Fourth Industrial Revolution.

Since the 7 NSP Plus initiatives aim to include as much as possible the demands of ASEAN people, collected through public surveys, it seems to be good to make better cooperation with Indonesia. However, there is still a need for much closer communication to produce better outcomes while reducing the bias resulting from a limited scope of survey respondents.
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