RI - S. Korea Agree To Increase Trade And Investment

News Focus - RI, SOUTH KOREA AGREE TO INCREASE TRADE AND INVESTMENT By Andi Abdussalam Jakarta, Oct 14 (Antara) - South Korean President Park Geun-hye`s visit to Indonesia last week ended with both countries agreeing to strengthen economic cooperation and increase bilateral trade to US$100 billion by 2020. "Our (two-way) trade last year stood at US$30 billion. We have set a bilateral trade target of US$50 billion for 2015 and US$100 billion for 2020," President Susilo Bambang Yudhoyono told the press at a meeting in the State Palace in Jakarta over the weekend. In the past five years, the volume of trade between the two countries has risen by more than 20 percent. In the first half of this year, Indonesia`s exports to Korea touched US$5.8 million. Last week, Indonesia and South Korea deliberated on increasing economic cooperation between the two countries, lifting trade, and stepping up investments. The two countries signed at least seven investment agreements in the energy sector. They also inked a number of MoUs (Memoranda of Understanding) in fields such as creative economy. An Indonesia-South Korea Business Forum was held on Friday to discuss fields in which the countries could potentially extend their cooperation. The forum, which was attended by business leaders from the two countries, discussed the possibility of increasing investment in Indonesia to US$4.14 billion. "In the past 40 years of friendship between Indonesia and South Korea, remarkable progress has been made. Now, we must (work to) meet the target in the volume of trade and investment that has been set," said Coordinating Minister for Economic Affairs Hatta Rajasa. At the business forum held on Friday, the two countries signed a number of MoUs, including for the Wood Pellet fuel project in West Papua and a railway project in South Sulawesi. According to President Yudhoyono, trade relations between the two countries have improved over the years. South Korea is a good partner for Indonesia, he said. "Our cooperation in trade is time-tested. In 1998, when Asian countries, including South Korea and Indonesia, underwent a crisis, our ties remained strong," said President Yudhoyono. He said President Park has also affirmed South Korea`s commitment to cooperation between the countries. "I explained the Indonesian view of an economy, which is managed by a working group. South Korean investment (in Indonesia) has continued to increase and reached US$1.9 billion last year," he stated. "We agreed to strengthen our ties in the future while retaining our achievements," Yudhoyono said. Minister Hatta also lauded efforts made by the two countries to intensify cooperation and business relations, including in strategic sectors such as energy, infrastructure, agriculture, defense, and creative industry. "We are convinced that investment from Korea would continue and (this will) increase economic development in Indonesia. Investment (to the country) has also risen because of Indonesia`s strategic position as the biggest economy in the region and as the entry gate to the wider ASEAN market," he said. Hatta added there was potential for Korea to increase investment in the automotive sector in the future. He was referring to the possibility of Hyundai developing a plant in Indonesia which will serve as its car production base in Southeast Asia. "I could say that there is a big chance. Although it is not yet final, we have a big chance," he said. In order to boost cooperation in investment, the two countries have signed at least seven agreements in the energy sector worth US$1 billion. The first agreement pertains to an investment of US$600 million for the construction of a 2x200 megawatt coal-fired power plant, PLTU Tebo, in Jambi. The power plant will be a joint venture between PT Tebo Agung International and Korea`s South-East Power Co Ltd. The second agreement is on building of another coal-fired power project, PLTU Kalsel 1. The project, which is worth US$450 million, will be built by PT Adaro Power and PT EWP Indonesia. The third agreement is related to the setting up of a bio-fuel project in Papua Barat with a capacity of 0.2 million tons per year. The project, worth US$55 million, will be built by PT Teluk Bintuni Mina Agro Karya and Korea`s South-East Power Co Ltd. Indonesia and South Korea have also signed an agreement on a coal-methane gas drilling project. The project, a joint venture between PT Sugico and Hanjin D&B Co Ltd., will see an investment of US$30 million. The countries have signed a fifth agreement, agreeing to expand cooperation between PT Sugico Graha and Korea Gas Corporation with an investment of US$3.7 million. The Oil and Gas Directorate General and Korea Gas Safety Corporation have also signed an agreement on gas project technical safety. After the agreement was inked, Oil and Gas Director General Edy Hermantoro said the pact for technical safety cooperation will cover LNG, CNG, and LPG projects. Besides the six agreements, PT Pertamina (Persero) and Korea National Oil Corporation (KNOC) have also signed a memorandum of understanding. Apart from agreements on investment, Indonesia and South Korea have also agreed to achieve creative economic cooperation through the signing of a memorandum of understanding (MoU). The MoU was signed by Indonesian Tourism and Creative Economy Minister Mari Elka Pangestu and South Korea`s Minister for Culture, Sports, and Tourism Yoo Jinryong in the presence of Indonesian President Yudhoyono and President Park. "Both the nations have agreed to not only intensify relations but also foster cooperation in the development of human resources in the creative economic sector," said Pangestu. Earlier, President Park had said that creative economy was among the priorities in the development of the South Korean economy, which was based on the synergy of innovation, technology, and culture. Indonesia and South Korea have also rolled out the One Village One Product (OVOP) program to encourage youth entrepreneurship in the two countries. The program was developed to mark Collaboration Day. "South Korea is one of the biggest economic partners of Indonesia. Both the countries have agreed to build on cooperative measures," said Deputy of Small and Medium Enterprises Department of Cooperatives and SMEs Ministry I Wayan Dipta. Earlier, Indonesian Cooperatives and SMEs Ministry signed an agreement with Korea Trade & Investment Promotion Agency (KOTRA), with participation from Qoo10, Lotte Mart, LejelHome Shopping, and MuGungHwa Distributor. "The agreement will open up a new market to sell local products to support the OVOP programme," Dipta said. "KOTRA will encourage talented youth from both countries to participate and plans to develop sustainable local communities, as well as create job opportunities," he added. Indonesia and Korea have also agreed to sign Bilateral Currency Swap Arrangement (BCSA), worth US$10 billion, which would be effective for three years. "The Bilateral Currency Swap Arrangement is aimed at promoting bilateral trade and strengthening beneficial financial cooperation between the two countries," said Executive Director of Bank Indonesia`s Communication Department, Difi Johansyah.