South Korean President Park Geun-hye. Source: Wikimedia
South Korea pledged to help accelerate industrial growth in Indonesia during a bilateral meeting with South Korean President Park Geun-hye and President Joko Widodo in Seoul.
Last year, the value of Korean investment in Indonesia was US$1.21 billion, compared to US$1.12 billion in 2014, with “Jokowi”, as he is popularly known, clearly intent on reversing the trend.
“Banking on the prospects of welcoming South Korean investment to the industrial sector, Indonesia intends to make South Korea a partner to accelerate industrialisation in Indonesia,” Jokowi said.
He said Indonesia was looking to reduce its steel imports by strengthening domestic production and he welcomed manufacturer POSCO’s decision to expand its operations with Krakatau Steel, in order to boost output of the metal to 10 million tonnes.
“I believe POSCO’s expansion plan will run smoothly and encourage the establishment of an integrated steel industry,” Jokowi added.
Park agreed a deal to let Korean businesses get involved with US$6.7 billion worth of Indonesian infrastructure projects.
The two leaders also signed a memorandum of understanding on two projects worth US$2.7 billion: a gas pipeline from Palembang and Bali and light rail system in Jakarta.
“We will work closely together to achieve tangible results based on MOUs we signed for various business projects,” Park told the media. “And we also agreed to cooperate to find new growth engines for the economy.”
She added they were strengthening defence cooperation, including the ongoing joint development of a fighter jet.
According to UN data, Indonesia beat Britain and Russia last year in terms of industrial output to rank 10th in the world, one of the few countries to achieve output and demand growth in a difficult financial climate.
The president his hoping to realise his vision of making Indonesia Asean’s biggest digital economy with a projected e-commerce transaction value of US$130 billion through the creation of 1,000 technology-based startups by 2020.
They also signed an agreement on the maritime sector in an attempt to outlaw illegal fishing and processing, despite the distance between the two nations’ territorial waters.
The value of trade between Indonesia and South Korea declined to US$16.7 billion in 2015, down from US$22.47 billion in 2014. The sprawling archipelago’s population of 250 million makes it the world’s fourth-largest but Korea trades more with Vietnam and tiny Singapore.
Efforts suggested to increase trade included reducing tariff and non-tariff barriers.
It is almost a decade since the Joint Strategic Partnership to promote Friendship and Cooperation in the 21st Century was signed between the two states in 2006.
Park expressed her intention to increase investment in infrastructure, including the maritime sector.