Kalla seeks S. Africa investment

Agencies, Capetown, South Africa

Vice President Jusuf Kalla met with his South African counterpart Phumzile Mlambo-Ngcuka in Pretoria on Tuesday to discuss opportunities for businesspeople in South Africa interested in investing in Indonesia.

"The investment is needed not only for job creation and poverty eradication but also to improve our economy," Investment Coordinating Board (BKPM) chairman Muhammad Luthfi, who is in South Africa with Kalla, said as quoted by Antara on Wednesday morning aboard the flight from Johannesburg to Capetown.

South Africa's state-owned oil and gas company PetroSA may invest in oil exploration and production projects in Indonesia, as the two countries seek to strengthen ties.

"One of the agreements which could be signed next year is in the area of minerals and energy," Mlambo-Ngcuka was quoted as saying by Bloomberg after the meeting. "PetroSA is talking to their counterparts in Indonesia about cooperation, including opportunities for exploration and production in Indonesia."

South African Airways and its Indonesian counterparts are also considering signing a cooperation agreement, which will make it easier to travel between the two countries, Mlambo-Ngcuka said.

Kalla's trip to South Africa -- his second overseas trip this year following a visit to China earlier this month -- is meant to follow up on agreements signed by Susilo and South African President Mbeki during the Asian-African Summit in April in Jakarta.

Among the agreements are a memorandum of understanding on agricultural development cooperation and a joint statement on the establishment of a joint trade committee.

Many Indonesian businesses have been reluctant to get involved in Africa, pointing to the high shipping costs and the relatively small market size.

At present, Indonesian exports to South Africa stand at US$350 million, while its imports are at $125 million.

To boost trade, South Africa has offered a strategic arrangement through which Indonesia could boost its trade throughout the Southern Africa Customs Union.