TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
S. Korean companies plan to invest $17 billion in Indonesia
As many as 16 South Korean companies have expressed a serious commitment to spend up to US$17
Change Size
As many as 16 South Korean companies have expressed a serious commitment to spend up to US$17.1 billion in a wide array of sectors from power generation to minerals processing in Indonesia, the Investment Coordinating Board (BKPM) said.
About $8.5 billion of the planned investments, which were registered at the BKPM between October last year and January this year, come from five firms, which would use the funds to manufacture import-substitution products, according to data.
One firm is investing $2.7 billion to build a mineral proccessing facility. Other investment plans will involve power generation, labor-intensive industries, agro-commodity processing, maritime and infrastructure, all of which are priority sectors envisioned by the investment body.
BKPM chief Franky Sibarani said Wednesday that most of the investors already secured principal permits ' initial licenses to set up businesses in Indonesia ' and continued with other steps to finally realize the investment.
'I am sure that realized investment will rebound this year,' Franky told reporters after opening a CEO gathering that hosted about 200 business executives from Korea. Franky said many Korean companies had delayed their investment plans last year as a result of a deadlock on the two countries' trade and investment negotiations. Normally, a committed investment can take a few years to be realized. After obtaining principal business permits, investors should get permanent business licenses in order to kick off their projects. The investment body recently launched its one-stop integrated licensing services to help cut procedures and costs to get all the business permits. Realized investment from Korea slowed to $1.13 billion last year, down by half from $2.21 billion in 2013. With the lowered investment, the country exited from the top five foreign spenders in Southeast Asia's largest economy.
In the energy sector, Korea Electric Power Corporation was interested in building a power plant with an Indonesian partner through a joint venture, according to Korean Ambassador to Indonesia Taiyoung Cho.
To help boost bilateral trade between both countries, South Korea and Indonesia would resume talks on a comprehensive economic partnership agreement (CEPA), Cho said.
'We proposed that we resume the discussions on CEPA and the Indonesian government accepted our proposal in last December. Now the Indonesian government is thinking about ways to resume and how to position itself,' Cho said.
The negotiations for the deal began in July 2012, but was stalled mid last year as both parties disagreed over the guarantee of direct investment from Korea and access for Indonesian exporters to the East Asian nation's agriculture market.
Cho further said the Korean government could not guarantee investment from Korean firms to Indonesia as the decision would be up to the decision of the private sector.
'In a market economy, no government can guarantee that private business firms will make investments. My point is that we develop many more ways to encourage investment in Indonesia,' he explained.
Indonesia's exports to Korea declined by 6.9 percent to $9.77 billion in the January-November period last year from 2013, while imports rose slightly by 0.25 percent to $10.63 billion, resulting in a $862.95 million deficit.
Outbound shipments are mainly comprised of liquefied natural gas, bituminous coal, crude oil and natural gas, rubber and copper ore, while imports are made up of diesel, gasoline, textile, steel and synthetic rubber.
