Indonesia to help Korea's expansion into ASEAN

Irman Gusman, chairman of the Regional Representatives Council / Courtesy of Korea-Indonesia Partnership Council

By Kim Hyo-jin

Indonesia will provide opportunities for South Korea to expand its business ties with ASEAN, a visiting Indonesian parliamentary leader said Monday.

“A boost in trade between South Korea and the ASEAN member states is expected next year with the launch of the ASEAN Economic Community (AEC),” Irman Gusman, chairman of the Regional Representatives Council, told The Korea Times. “Strengthening economic cooperation with Indonesia, an economic leader in the region, will make the chances even higher.”

Gusman, who has actively worked on enhancing multilateral regional cooperation, visited Seoul on Monday to represent his country at a meeting of the Korea-Indonesia Partnership Council.

The council was established in 2013 to celebrate the 40th anniversary of South Korea-Indonesia diplomatic ties and further strengthen economic cooperation.

Gusman said Indonesia is poised to become a “hub” of trade and industry in the AEC, which will be launched by the end of this year.

This year, the 10 ASEAN member states agreed to tighten political and economical regional integration by establishing the AEC. In its closer-knit boundary, they plan to eliminate tariffs and allow freer movement of goods and services.

Gusman said South Korea will benefit in the AEC by seeking increased partnership with Indonesia, its biggest trading partner in the region. Indonesia’s trade volume consists of 40 percent of the entire region.

Trade between South Korea and Indonesia reached $23.6 billion last year, up from $200 million in 1973 when the two countries began their diplomatic relationship.

“With the launch of the AEC, Indonesia’s manufacturing industry is seeking more industrial collaboration with South Korean businesses. South Korea’s advanced technology and financial resources and Indonesia’s cheap labor and abundant natural resources can make a synergy effect,” he said.

“Setting up joint ventures on Indonesian soil will be beneficial to South Korean firms,” he added, noting that Indonesia is a logistics stopover for South Korea’s shipment to Europe, the Middle East and Australia.

Gusman said South Korean businesses will start having more opportunities in the Indonesian market next year as Jakarta is seeking foreign investments in infrastructure, especially in the maritime industry.

“Enhanced profit-sharing is the way the two countries are working together,” he said.

Gusman said that in order to establish a successful AEC, closer relations between South and North Korea is necessary.

“Regional stability is the key to achieving regional integration ― that’s why we support the unification drive in South Korea,” he said, adding that Jakarta is willing to mediate between the two.

Indonesia established diplomatic relations with North Korea in 1961 and continues to maintain stable diplomatic relations with them to this day.