S. Korea, Indonesia enhance business ventures
Tony Hotland, Jakarta
A business delegation from South Korea arrived here on Tuesday to attend the 12th bilateral economic meeting highlighting how to develop industrial collaboration between the two countries.
The head of the Indonesia-Korea Economic Cooperation Committee (Inkorecom), Soy Pardede, said that the three-day meeting would elaborate on the possibility of South Korea delegating the production of its low and medium-skilled products to Indonesia.
"Such collaboration would staunch the decrease in the value of investment in Indonesia that has been occurring ever since the 1997 economic crisis. South Korea still trusts Indonesia as a business partner because we have a good history of economic collaboration," Soy told The Jakarta Post on Tuesday.
Inkorecom is part of the Indonesian Chamber of Commerce and Industry (Kadin).
Soy explained that rising salaries in South Korea would shift the focus of businesspeople there to producing high-skilled products and sophisticated goods.
"Therefore, they can leave the production of low and medium- skilled products to developing countries like Indonesia. We can produce and sell them back to South Korea.
"After that, South Korea can reexport the products -- or semi- finished products -- to its main market, the United States," he said.
He cited automotive components, plastics, and rubber products as examples of low and medium-skilled products.
Led by the chief executive officer of the South Korean Chamber of Commerce and Industry, Kim Hyo-sung, the delegation also plans to visit an industrial complex in Cikarang.
The delegation is scheduled to meet with Minister of Industry and Trade Rini Soewandi, chairman of the Investment Coordinating Board (BKPM) Theo F. Thoemion, chairman of Kadin M.S. Hidayat, and South Korean businesspeople here.
There are at least 850 South Korean companies in Indonesia, with a total investment of up to US$10.7 billion. The companies are operating mostly in the logging, plywood, manufacturing, and garment sectors.
The last bilateral economic meeting between the two nations was held in Seoul in February 2000.
According to data from the Ministry of Industry and Trade, the total trade value between the two countries reached $5.23 billion last year. This figure was slightly higher than the $5.2 billion recorded in 2002.
Indonesia's total exports to South Korea stood at $3.9 billion in 2003, consisting mainly of textiles and footwear. Total imports stood at $1.37 billion, made up mostly of machinery and automotive products.