Jakarta and Seoul will sign a comprehensive strategic partnership agreement during a three-day state visit by South Korean President Roh Moo-hyun, which began Sunday (3/12/06). The pact includes 30 programs of action, as well as nine memorandums of understanding (MOUs) covering various industries.
South Korean Ambassador to Indonesia Lee Sun-jin told a press briefing that the new accord will lay a foundation for the widening and deepening of bilateral relations between the two countries, and establish a framework for more business cooperation.
The strategic partnership aims to ensure that both countries will work together on the basis of shared values such as democracy and a market economy, and common strategic goals such as enhancing regional cooperation. Lee said both leaders wanted to make the agreement effective immediately. "We are establishing an eminent persons group to map out and speed up the implementation of the action programs," he explained.
The MOUs will cover the energy and mining sector, including nuclear cooperation; forestry; information technology, telecommunications, human resources, finance, trade, small-and medium-scale enterprise cooperation, anti-corruption and tourism.
Businessmen from both countries will hold the first Indonesia-Korea joint energy forum on Tuesday, while South Korea will offer Indonesia technical help with its plans to establish its first nuclear plant in Central Java.
"We are a leading country in nuclear technology,” Lee said. “As you know, nuclear plant security is very delicate; that's why we are offering Indonesia help in this field.”
In the forestry sector, Korean companies are being invited to invest in 500,000 hectares of land set aside for crude palm oil and pulp and paper plantations. South Korea will develop an information-technology training center for Indonesians, while the Indonesian Investment Coordinating Board will sign an agreement with the Korean investment agency to enhance cooperation on investments.
Bank Indonesia and South Korean Central Bank will extend their swap agreement, which was due to expire by the end of this year, for another two or three years. "Currently our swap agreement to hedge the risk of financial crisis is at $1 billion. We would like to increase the amount from the current level," Lee said.
South Korea will also provide $400 million in soft loans for Indonesia for 2006-2009 and provide Jakarta with a grant of $30 million for 2006-2008. South Korea is already one of the largest investors in the country, with approved cumulative investment of $8.7 billion and realized investment of over $4 billion over the past 15 years. Last year alone, approved investment was $617 million. There are over 1,100 Korean companies operating in Indonesia.