S. Korea set to continue Timor national car project

JAKARTA (JP): Visiting South Korean Minister of Foreign Affairs and Trade Hong Soon-young met on Wednesday with President Abdurrahman Wahid and other senior government officials and won approval from them to continue the Timor national car project.

"Both Indonesia and South Korea feel the necessity to continue the project as long as it does not contravene WTO (World Trade Organization) rules," Minister of Foreign Affairs Alwi Shihab said after accompanying the President in receiving Hong at the Bina Graha presidential office.

Hong, who arrived here on Tuesday night for a three-day visit, also met with Vice President Megawati Soekarnoputri and held bilateral talks with Alwi.

Alwi said the government warmly welcomed the proposal as Indonesia is in urgent need of large-scale foreign investment, including from South Korea.

South Korea's KIA Motors entered the Indonesian market in 1995 in a joint venture with PT Timor Putra Nasional, which was co- owned by former president Soeharto's son Hutomo "Tommy" Mandala Putra.

The multimillion dollar national car project sparked strong criticism and protest both at home and abroad, as it received unfair facilities, including tax exemptions, from the government.

The project, overloaded by massive debts, practically collapsed with the fall of Soeharto in May last year.

KIA reentered the market again early this month with a new local partner, PT KIA Mobil Indonesia, whose chief commissioner is former minister of transmigration Lt. Gen. A.M. Hendropriyono.

During Wednesday's meeting it was also revealed President Abdurrahman would make another extended foreign trip.

Abdurrahman is due to go to Seoul as part of a 12-day overseas tour at the end of January, which for now includes nine countries among them England, Belgium, France, the Netherlands, Switzerland, India and Pakistan.

"The overseas trip is expected to encourage more investment in Indonesia as part of our economic recovery process," said Alwi.

Abdurrahman has been widely criticized for making too many foreign trips abroad amid unresolved issues at home.

Since he was sworn in as president on Oct. 20, Abdurrahman has visited 15 countries, including China, Japan, and the United States. (04/prb)