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)