S. Korea to invest over $100m in Indonesia
S. Korea to invest over $100m in Indonesia
JAKARTA (JP): South Korean companies will invest over US$100
million in Indonesia this year to underpin their confidence on
the economy, Minister of Foreign Affairs Alwi Shihab said on
Friday.
Some $75 million would be spent on expanding a Nike shoe
factory and the rest would go towards the Timor car project, and
forestry and nomadic resettlement programs, Alwi said after
signing an economic agreement with South Korean Trade Minister
Han Duck-soo at his office.
South Korea's Kia Motor Corp. has pledged to resume its
support for the development of the Indonesian national car
project, called Timor, pending the restructuring of its massive
foreign debts.
President Abdurrahman Wahid during a visit to Seoul in
February decided to revive the car project which lost all its
privileges, including government credits, in 1998.
The Timor car company is controlled by Hutomo Mandala Putra,
the son of former president Soeharto.
Alwi said the amount of investment that Kia is prepared to
spend had not been determined.
He described relationship between Jakarta and Seoul as
"spectacular."
"We want the Korean investments to increase," he added.
Alwi and Han signed a memorandum of understanding (MOU) on the
establishment of a joint committee for economic, trade, and
technical cooperation.
The joint committee, involving senior officials from both
countries, will review trade agreements and make recommendations
on how to strengthen bilateral economic and trade cooperation.
"Korean government and businesses have strong faith in the
ability of the Indonesian government and businesses to work
together for the betterment of the economy of the two countries,"
Han said after signing the agreement.
South Korea is Indonesia's fourth largest export market,
contributing $3.32 billion in foreign exchange earnings in 1999,
including $2.04 billion from the oil and gas sector, according to
the Ministry of Industry and Trade.
Other commodities include wood and wood products, iron ore,
pulp, electronics, rubber, cotton, and lead.
Indonesia imported $1.33 billion worth of Korean goods in
1999, including leather, textiles, plastics, sheet metal,
hydrocarbon, raw material for shoes and footwear, and textile
machineries.
South Korea is Indonesia's seventh largest source of direct
foreign investment with $10.66 billion worth of projects approved
as of the end of March.
"Through the signing of this MOU, we fervently hope that the
achievements of our economic and trade cooperation could be
accelerated," Alwi said.
Alwi said he would go to Beijing on Sunday to sign a similar
agreement and attend a ceremony on the 50th anniversary of China-
Indonesia relations.
He will proceed to the Netherlands to attend a communications
forum on investment opportunities in Indonesia. (10)