S. Korea and Indonesia vow better trade, investment ties
S. Korea and Indonesia vow better trade, investment ties
JAKARTA (JP): The Indonesian and South Korean chambers of
commerce and industry agreed yesterday to improve bilateral
economic relations in trade and investment activities.
In the 10th joint meeting of the Indonesia-Korea Economic
Cooperation Committees at the Horison Hotel, both chambers
pledged to boost two-way trade from US$4.32 billion in 1994 to
$5.38 billion this year.
They also agreed to balance bilateral trade, which has always
been in favor of Indonesia.
Indonesia enjoyed a trade surplus with Korea of $427 million
last year, up 267 percent from $116.3 million in 1993, according
to the Central Bureau of Statistics.
The Korean delegation was led by Su-Hwan Park, chairman of the
Korean committee, who is also president of LG International Corp.
The Indonesian side was headed by Soy M. Pardede, chairman of the
Indonesian committee and president of PT Duma Na Napu.
The Koreans also pledged to further improve Korean investment
in Indonesia. The Indonesian businessmen invited Korea's
businesspeople to invest in electricity, chemical and textile
industries as well as oil refining.
According to the Investment Coordinating Board, the Indonesian
government approved 346 Korean investment projects worth $5.55
billion as of Dec. 31, 1994. However, official Korean data showed
that Korea made 249 cases of direct investment in Indonesia worth
$861 million as of the end of 1994.
Yesterday's meeting coincided with the four-day visit of the
Korean energy and trade mission to Indonesia. The mission, which
ended yesterday, was led by Korean Vice Minister of Trade,
Industry and Energy Un-Suh Park, and was comprised of four
officials and 32 businessmen from 27 companies.
Kyung-Woo Lee, executive vice president of Korea Petroleum
Development Corp., said yesterday that with China and Vietnam
moving into the picture as prospective investment destinations
for Korea, the growth of Korea's investment in Indonesia is now
slowing down.
"Korean investors perhaps are starting to look the other way
because investing in Indonesia is not what it used to be, due to
wage hikes and shortages in infrastructure resulting from the
country's continued strong economic growth. Therefore, those
problems should be tackled to further facilitate cooperation in
investment," Lee said.
He suggested that there should be a shift in the direction of
bilateral cooperation in investment in view of the changes taking
place in Indonesia's investment environment.
He said Korea's investment in Indonesia is moving from labor-
intensive sectors to capital and technology-intensive sectors.
"This is a sift in the right direction which will become more
evident, given the changes that should take place in the economic
environment of the two countries in the future," Lee said.
He expected that Korean companies can work with their
Indonesian counterparts in infrastructure businesses such as
telecommunications, steel and iron, petrochemicals, automobiles,
and the parts and materials industries.
Lee also promised that Korean companies would transfer more
technology than other countries. He added that Korea's
technological transfer to Indonesia started to increase in the
late 1980s. Technological transfers to Indonesia take up 9.8
percent of Korea's total transfers, making Indonesia one of the
biggest users of Korean technology.
He said Japan, the United States and other advanced countries
have cutting edge technologies but they are either reluctant to
pass over their know-how or ask for huge royalties.
"Therefore, Korea and Indonesia have to diversify our
technology import sources," Lee said. (rid)