Gus Dur visits S. Korea to help boost business

Gus Dur visits S. Korea to help boost business

SEOUL (AFP): Indonesian President Abdurrahman Wahid will begin a two-day visit here Thursday with Jakarta hoping his tour of an auto plant will prompt South Korea to resurrect Indonesia's defunct national car project.

"Resumption of the joint venture is on the agenda when Wahid meets President Kim Dae-Jung (for a summit on Thursday)," Budiarmun Bahar, economic attache at the Indonesian embassy here told Yonhap News Agency.

"Since the Indonesian government believes that the resumption of the joint venture will benefit both countries, (Wahid) is to focus on how to continue the project," he said.

But, the diplomat added, a study would have to be conducted before "the full-fledged resumption" of production at PT Timor Putra National (TPN), a project from which Kia withdrew last year.

Kia, now owned by Hyundai Motor Co., withdrew last year from the controversial 1996 Soeharto-era production joint-venture, for which it provided knock-down car units and technology.

But Bahar added Indonesia's two ministers of Industry and Trade and Investment will discuss the issue of resuming the project with the Korean government and Kia.

Wahid and some of the 100 government officials and businessmen accompanying him on his two-day state visit will Friday tour Kia's plant at Hwasong, south of here, apparently to tap the possibility of reviving the scheme.

But chances of a deal to rekindle the joint-venture manufacturing plant appear slim, according to Seoul's Kia Motors Corp., once Indonesia's partner in the ill-fated enterprise.

Instead, Abdurrahman, more popularly called Gus Dur, will focus on boosting other economic ties while tightening political links between the two young democracies.

He was to kick off the trip by holding a summit Thursday with South Korean President Kim Dae-Jung, a former dissident who came to power two years ago as a champion of democracy and human rights who is highly respected by President Abdurrahman as one of his teachers.

"Both heads of state share a belief in democracy and are expected to discuss the situation in Indonesia which now in the process of democratization," said Lee Kyung-Soo of Seoul's foreign ministry.

Gus Dur's swing through Asia and Europe will allow him to show off the new democratic Indonesia to friends and business partners, Jakarta officials have said.

The trip, the second here by an Indonesian leader after President Soeharto visited in 1982, is aimed primarily at drumming up aid, investment and trade from South Korea, officials said.

More than 100 officials and businessmen are traveling with the president, who will also hold talks with Prime Minister Park Tae- Joon and meet local business leaders.

Indonesia's Foreign Minister Alwi Shihab, who will accompany Gus Dur, said earlier the message of the tour was "that as a new member of the democratic community, you should give us a helping hand."

South Korea now imports two-thirds of its needs in liquefied natural gas from Indonesia, with which it established diplomatic ties in 1973.

Seoul exports US$1.8 billion worth of goods to Indonesia annually and imports $3.1 billion, according to official statistics, while Seoul's investment in the country reached 10.2 billion dollars last year.

Kia confirmed Wednesday that Gus Dur would lead a high-profile tour of the plant at Hwasong, south of Seoul.

"Gus Dur is scheduled to visit the factory personally on Friday with Indonesian officials and businessmen," a Kia spokesman told AFP.

But both Kia and foreign ministry officials warned Jakarta was likely to be disappointed if it expected the visit to kickstart Kia's interest in TPN.

"We have no plans to restart the project at the moment," a Kia official said.

TPN, launched in cooperation with Kia by Soeharto's son Hutomo "Tommy" Mandala Putra, once enjoyed exclusive tax breaks but is now saddled with around Rp 3 trillion ($402 million) in debts.

Jakarta has tried to claim back a similar amount from Kia, which it says the firm owes because Kia imported wholly-foreign made local cars with local content tax breaks.