Korea targets RI despite labor concerns<\/p>\n
Tony Hotland, Jakarta<\/p>\n
Despite major concern at frequent increases in wage rates
\ndespite the relatively low productivity level of Indonesian
\nworkers, Korean businesspeople plan to keep Indonesia as one of
\ntheir main trading partners.<\/p>\n
\"The productivity of Indonesian workers is quite good, but
\nsome Korean businesspeople are worried about the increasing rate
\nof labor wages,\" chief executive officer of the South Korea
\nChamber of Commerce and Industry Hyo Sung Kim said on Wednesday.<\/p>\n
\"They say there's always an increase every year and that the
\ntrend will continue. It's one of the main concerns that has
\ncaused many of our businesspeople to decide to relocate their
\ncompanies to other countries,\" he said.<\/p>\n
Kim, along with some 20 businesspeople from South Korea,
\nattended the 12th bilateral economic meeting between the two
\ncountries on Wednesday.<\/p>\n
The meeting was also attended by head of the Indonesia-Korea
\nEconomic Cooperation Committee Soy Pardede and head of the
\nIndonesian Chamber of Commerce and Industry M.S. Hidayat.<\/p>\n
Many foreign investors have decided to relocate their
\nbusinesses to other countries, such as China and Vietnam, due to
\nthe increasing salary levels set by the Indonesian government.<\/p>\n
China sets a US$69 minimum monthly wage, Vietnam $45, and
\nIndonesia $80 (average).<\/p>\n
Soy admitted the concerns, saying that the government was
\nstepping up efforts to improve its economic policies and
\nstrategies in Indonesia to attract more investors.<\/p>\n
\"About the increasing level of salaries -- I do think it
\nshould be left to the private sector to decide because each
\ncompany or industry has a different capability (to pay wages),\"
\nhe said.<\/p>\n
Nonetheless, Kim gave an assurance that Indonesia would remain
\nSouth Korea's main trade partner due to Indonesia's enormous
\nmarket.<\/p>\n
\"For oil and gas we rely heavily on Middle Eastern countries,
\nbut their price has been going up so we have to diversify our
\nimport sources.<\/p>\n
\"The second is that ASEAN countries are becoming one economic
\nbloc, so we have to seek opportunities to increase our market
\nactivities in this area,\" he said.<\/p>\n
Kim said that South Korean business players were eyeing high-
\nvalue-added industries, such as information and high technology
\nand development of natural resources, and power generator
\nprojects, for investment.<\/p>\n
South Korea's current main investment areas are focused on
\nlabor-intensive industries such as textiles, footwear and
\ngarments.<\/p>\n
Latest data from the Investment Coordinating Board (BKPM)
\nshows 41 newly approved investment projects from South Korea,
\nworth $39.1 million.<\/p>\n
Both parties also agreed that the manufacture of machinery and
\nautomotive components, rubber, plastic goods and furniture had
\ngood prospects for the future.<\/p>\n
Indonesia mainly exports crude palm oil, natural gas,
\nagricultural and mining products, and wood to South Korea.
\nIndonesia mostly imports advanced textile and organic chemical
\nproducts, general machinery and electronic goods from the
\ncountry.<\/p>\n
Indonesia's total exports to South Korea stood at $3.9
\nbillion, while imports stood at $1.37 billion in 2003.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/korea-targets-ri-despite-labor-concerns-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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