Indonesia, S. Korea improve trade, investment cooperation

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Indonesia, S. Korea improve trade, investment cooperation

By Abu Hanifah (Xinhua) 08:12, October 12, 2013

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JAKARTA, Oct. 11 -- Indonesia and South Korea agreed to improve their bilateral economy relationship that has significantly expanded in the last 40 years by exploring more opportunities in trade and investments.

The bilateral intention to explore more business opportunities in the two countries was revealed in a high-profile business forum hosted by Indonesian ministers in a lavish hotel here on Friday evening, attended by the visiting South Korean President Park Geun- hye and her entourage that comprising executives of prominent South Korean firms.

The business forum paved the way for more South Korea investments in Indonesia with the signing of Memorandum of Understandings (MoU) conducted by South Korean executives and their Indonesian counterparts on several investment projects worth 4.14 billion U.S. dollars.

Among MoUs on eight projects signed in the event were railway track in South Sumatra, WoodPellet fuel in Papua and Tebo coal- fired power plant with a capacity of 2X200 MW in Jambi province.

"We are convinced that South Korean investments will be continuing here. They will contribute the efforts in developing Indonesia. The (investment) improvement was due to Indonesia's strategic point in Southeast Asia region as it is apparently the largest economy and is the gate to wider markets in the region," Indonesia's Coordinating Minister for the Economy Hatta Radjasa said in the event.

Hatta was accompanied by Industry Minister MS Hidayat, Energy and Natural Resources Minister Jero Wajik, Defense Minister Purnomo Yusgiantoro, Foreign Investment Coordinator Agency (BKPM) Chairman Mahendra Siregar and Chairman of Indonesian Industry and Commerce Chamber (KADIN) Suryo Bambang Sulisto to host the business forum.

According to Hatta, during 40 years of establishing good relationship with South Korea, the two nations have demonstrated good responses in deepening more cooperation in fields of creative industry, infrastructure, defense, agriculture and energy.

He added that significant improvements of cooperation between the two nations were manifested in the establishment of joint steel manufacture ran by Indonesian and South Korean firms, Krakatau Steel and POSCO. Increasing South Korean investments were also seen in the opening of Hankook tire plant and the planned investment of Lotte Chemical in Indonesia.

Total South Korean investments in Indonesia stood at 1.9 billion U.S. dollars as of last year, making it the fifth largest foreign investor in the country.

Indonesia is now expecting possible investment in automotive industry from South Korean prominent automaker Hyundai. The nation expects Hyundai to finalize its consideration to make Indonesia its production basis in Southeast Asia region. Hatta said that with resources available in the country, Indonesia has great chance to win seize Hyundai investment.

Indonesia-South Korea two-way trade saw impressive growth to more than 20 percent in the last five years. Bilateral trade between the two nations stood at 30.8 billion U.S. dollars in 2011, triple from 10 billion U.S. dollars in 2007.

The two nations have set two-way trade targets of 50 billion U. S. dollars and 200 billion U.S. dollars by 2015 and 2020 respectively.

President Park Geun-hye is expected to meet Indonesian President Susilo Bambang Yudhoyono in presidential palace on Saturday. Her three-day visit began on Thursday to Indonesia was under invitation of President Yudhoyono.