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March 11, 2009

Indonesia, Korea sign deals worth $6bn

Indonesia and South Korea signed eight memorandums of understanding (MOU) Saturday worth nearly US$6 billion in various sectors, including energy, trade and the environment, reported the Jakarta Post.

The deals were signed during a business dialogue between the two countries as part of South Korean President Lee Myung-bak's three-day Indonesian visit. Indonesian Coordinating Minister for the Economy Sri Mulyani Indrawati said the MOUs would strengthen bilateral relations in trade and investment.

"By strengthening Korean-Indonesian relations, we can also boost economic support during this global crisis," she said.

Mulyani added Indonesia appreciated the commitment of South Korean businesses to stay in Indonesia during the 1997-1998 Asian financial crisis, when most foreign businesses fled the country.

"We appreciate the commitment [to stay here] in 1998," she said.

Last year, South Korea was Indonesia's sixth largest investor, with 182 projects valued at $301.1 million. The investment was channelled to the chemical, pharmaceutical, metal, machinery, electronics, motor vehicle, transportation equipment, paper, printing and non-metallic minerals industries.

Vice President Jusuf Kalla said South Korean companies here now employed around 400,000 Indonesians.

The immigration office ranks South Koreans as the largest expatriate population in Indonesia, amounting to some 40,000.

Trade between the two countries has grown at a tremendous pace in recent years, soaring 18.14 percent between 2003 and 2007, according to Indonesian Trade Minister Mari Elka Pangestu.

However, she warned this year's figures would decline because of the global economic downturn.

Indonesia exported $8.6 billion worth of goods to South Korea between January and November last year. The figure is 25.7 percent higher than during the same period in 2007.

Besides oil and gas, Indonesia exported mostly knitted fabrics, parts and accessories for videos, magnetic recorders, unwrought zinc, refined copper and copper alloys.

Its imports from South Korea included light vessels, fire floats, unwrought zinc, polyacetals and other polyesters, and flat rolled iron products.

Total imports from South Korea between January and November 2008 stood at $6.6 billion, a 120.7 percent increase from the same period in 2007.
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