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)