South Korea and Indonesia Forge Deeper Ties with Strategic Partnership Upgrade

Korea and Indonesia elevated their bilateral relations to a "special comprehensive strategic partnership" as President Lee Jae Myung and Indonesian President Prabowo Subianto agreed to expand cooperation in trade, investment, energy and the defense industry during a bilateral summit on Wednesday.

During the summit, Lee called on the need to expand resource security cooperation to minimize the impact of the Middle East crisis during their talks at the Blue House in central Seoul amid concerns over gas supplies due to the U.S.-Israeli war on Iran.

"There is great concern about the impact that the aftermath of the Middle East war will have on the energy supply chains of both countries as well as the regional economy," Lee said during bilateral talks, adding he is "reassured by the stable role Indonesia plays in providing major energy sources" such as liquefied natural gas (LNG) and coal.

Korea and Indonesia signed 16 memorandums of understanding (MOUs) on the occasion of the summit to expand cooperation in sectors including the economy, critical minerals and clean energy.

Prabowo said that the two countries can play a "complementary role" to one another, noting that Korea possesses outstanding industrial capabilities and science and technology, while Indonesia has abundant resources and a large market.

Lee and Prabowo on Wednesday adopted a joint statement upgrading bilateral relations from a "special strategic partnership," established in 2017, to a "special comprehensive strategic partnership" for inclusive growth and shared prosperity.

The statement covered political and security; trade, investment and industry; advanced technology, energy transition and green economy; sociocultural and people-to-people exchanges; and regional and global cooperation.

The leaders also underscored the "importance of maintaining stable, open, and reliable global energy supply chains" and "minimizing disruption to the flow of energy and essential goods."

The two sides announced the "Global AI Universal Basic Society Solidarity Initiative," a framework where the fundamental rights of every individual are actively realized.

In the statement, the two leaders "noted with satisfaction" that the joint development of the KF-21 fighter aircraft, which has been underway for over 10 years between the two countries, is scheduled for completion in June, "and expressed their commitment to cooperation on the IF-21 production project and their expectations for the continued progress of other defense industry cooperation projects," including collaboration on trainer aircraft, anti-tank guide missile (ATGM) systems and ammunition.

During their closed-door talks, Lee explained the Korean government's policy of peaceful coexistence and joint growth on the Korean Peninsula, as well as its efforts to resume inter-Korean dialogue, and requested Indonesia play a constructive role. Prabowo in turn reaffirmed his support for the denuclearization and peace on the Korean Peninsula.

The MOUs signed included cooperation on the economy, a critical mineral partnership, digital development, AI, basic health and human development, clean energy, carbon capture and storage, the offshore plant service industry, environment and intellectual property protection.

Separately, the Bank of Korea (BOK) and Bank Indonesia established a local currency transaction framework, following up on an MOU signed in July 2024.

Travelers between Korea and Indonesia can now make payments without exchanging currencies using a cross-border QR code-based payment system, the BOK announced Wednesday.