S. Korea complains about RI wage hike

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.