S. Korea complains about RI wage hike
Anastasya Emmanuelle and Fitri Wulandari, The Jakarta Post, Jakarta
Korean businesses operating in Indonesia have expressed concern over various labor issues, in particular the recent rise of the minimum wage, according to Minister of Industry and Trade Rini M. Soewandi.
"They stressed the rise in minimum wages, which they consider to have risen too quickly and too high," Rini told reporters, after opening the sixth trade ministerial meeting between South Korea and Indonesia on Monday.
According to Rini, the sudden rise in the minimum wage had posed difficulties for Korean companies operating here.
"What they want in the future is for the government to tell them before such legislation is enacted so that they can adequately prepare for it," she said.
The meeting was attended by visiting South Korean Minister of Trade Hwang Doo-yun, who is leading a South Korean trade delegation.
The government raised the minimum labor wage by up to 30 percent earlier this year, which sparked protest from some businesses already suffering from years of economic hardship at home and a shrinking overseas market.
Currently, there are around 700 Korean companies operating in the country, mostly in textile, footwear and toys which rely heavily on Indonesia's abundant supply of cheap labor.
Another highlight in the meeting was the possibility of South Korea increasing the amount of liquefied natural gas (LNG) imported from Indonesia.
"(South) Korea might increase the amount of LNG they import from us" Rini said, without giving details.
Hwang also stressed the important role of Indonesia in supplying LNG to his country.
"Indonesia has been a stable supplier of oil and gas to Korea,.. so we would like to continue this established relationship," Hwang stated.
Indonesia has been facing tough times in marketing LNG to South Korea, as it has to compete with other LNG suppliers such as Oman, Malaysia, Brunei and Qatar.
After Japan, South Korea is the second largest consumer of LNG from Indonesia. In 2001, South Korea's demand was estimated at 16.2 million tons, a rise from 14.2 million tons the previous year.
Around 32 percent of the demand, or 5.4 million tons, was imported from Indonesia.
Hwang further indicated that South Korea would explore the possibility of cooperation in nuclear power.
Apart from cooperation in energy, Hwang said that in a Monday meeting with President Megawati Soekarnoputri, South Korea was asked to allocate more investment in the eastern region of Indonesia.
"It is a very good message for the Korean business community to explore business opportunities in Indonesia," Hwang said.
Without giving details, Hwang said that South Korean businesses intended to expand investment in Indonesia from the current total of US$11.7 billion in more than 1,350 projects.
The trade ministerial meeting also discussed various other trade issues including tax, financing facilities and visa requirements.
Based on data from the Ministry of Industry and Trade, the trade volume between the two countries from January to September 2001 reached US$4.6 billion, a 3.8 percent increase over the same period last year.
Other topics discussed by both ministers included efforts to strengthen small and medium-sized enterprises and trade information.