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.