Indonesia inked eight agreements worth up to $6 billion with South Korean firms during a forum held in Jakarta on Saturday, the head of the country’s investment coordinating board, or BPKM, said on Saturday.
The signing of eight individual memorandums of understanding with the firms during the Indonesia-Korea CEO Business Dialogue Forum is a boost for Indonesia, Southeast Asia’s largest economy, Muhammad Lutfi, BKPM’s head, told reporters on the sidelines of the forum at the Ritz Carlton Hotel on Saturday.
“These eight MoUs have a value up to $6 billion just from six large projects,” Lutfi said.
Indonesia’s success in attracting further investment at the forum - which was attended by 80 Korean and 100 Indonesian business delegates - was also welcomed by Finance Minister Sri Mulyani Indrawati. The event follows the disappointing results from the 5th World Islamic Economic Forum last week, where only $3 billion in investments were offered to Indonesia, far short of the expected $5 billion. News that the Binladin Group, one of the biggest business empires in Saudi Arabia, had frozen its plan to invest $4.3 billion in investment in rice crops in Papua Province also emerged during last week’s forum.
“Since the 1997-1998 crisis most South Korean firms stayed in Indonesia,” Sri Mulyani Indrawati, who also attended the Indonesia-Korea forum, said on Saturday. “We really appreciate this and also expect they will stay despite the global economic crisis.”
The MoUs comprise a deal between the Korea Energy Management Corporation and the Jakarta administration, Korea Gas Corporation with PT Pertamina, Korea Institute of Industrial Technology with the Fisheries Ministry to develop biotechnology; Korea Energy Management Corporation with the Gorontalo provincial government, Korea Export Insurance Corporation with PT Asuransi Ekspor Indonesia, Korea Midland Power Orient F. A. Machinary Samsung C&T Corporation with PT Medcopapua Indusrtri Lestari for a biomass power project in Merauke Province, as well as Korea Midland power Co. Ltd. and Euro CAP Corporation with the Riau provincial government for a tourism program.
South Korea was the sixth largest investor in Indonesia from 1990 and 2009, Lufti said, citing BKPM data. “Since 1990 to January 2009, South Korea invested as much as $4.8 billion in Indonesia for about 1,195 projects.”