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The Prospect of Relations Between Indonesia and Korea:
The Bilateral Ties to Further Enhance in a More Vibrant And Dynamic Way
With 60 years of experience living in the global community as free nations, Indonesia and Korea have achieved much. Both countries have made their voices heard, as they are at the same level with other countries while still preserving their own unique cultures. The peoples of the two countries are in good spirits and standing tall.
Indonesia itself just entered a new chapter of democratic life. Last year, Indonesia had three successful general elections for the first time in its political history. It thus has made Indonesia known now as the third biggest democratic country in the world.
The new government is now focusing on ways to overcome all inherited challenges, while continuing the attainments made by previous administrations for the sake of people's welfare and the nation.
The bilateral ties between Indonesia and Korea show an intimacy from time to time, and enjoy friendly and cordial relations marked by, among others, the frequent visits of both Presidents and high ranking officials; mutual support at international fora; and mutual cooperation in many practical fields.
The Korean government has so consistently rendered its support to the Indonesian government on its efforts to maintain its national integrity. At the same time, the Indonesia government has offered its continuous support to the Korean government to build peace and prosperity on the Korean Peninsula. Indonesia has so far focused its great attention on inter-Korean dialogue and the process of the Six- Party Talks. Indonesia was honored to facilitate the inter-Korean meeting between South Korean Prime Minister Lee Hai-chan and Kim Young-nam, Chairman of North Korean Supreme Peoples Assembly, on the sideline of the Asia-Africa Summit in Jakarta in April 2005.
The meeting paved the way for the Vice Ministerial Level Meeting in Gaesong where it was, among other things, decided to hold a Joint Commemoration of the 5th Anniversary of the Inter-Korean Summit 2000.
On the sideline of the commemoration, Minister Chung Dong-young held a meeting with Marshal Kim Jong-il and agreed to resume the Fourth Round of the Six-Party Talks in July. Indonesia welcomes the Joint Statement reached on Sept. 19, 2005, and believes that it will lead to the denuclearization in the peninsula, though there is a need for further compromise among the concerned parties. Indonesia sees that nuclear technology should be used for only peaceful purposes.
In this regard, Indonesia shares a common understanding with Korea that the issue should be addressed through peaceful dialogue. Accordingly, Indonesia is confident that the dialogue shall contribute to the establishment of peace and stability in the region. Indonesia also fully supports the idea of the unification of two Koreas.

Economic cooperation between the two countries has become closer in many fields. The cooperation is basically based on the fact that Indonesia has an abundance of natural and human resources, while Korea provides the capital and technology.
1. Economic Development: Indonesia continues to make use of development assistance (among other various technical training) from Korea International Cooperation Agency (KOICA).
2. Information Technology: Under the Framework of Economic Development and Cooperation Fund (EDCF), it has been agreed to develop egovernment in Batam, Indonesia using Korean technology. This will be followed by e-education, e-payment and e-health. Previously, the Korean government was also involved in developing the CDMA system in Indonesia as well as the information network system used by the Indonesian National Police.
3. Foreign Workers: The Korean government has selected Indonesia as one of the six countries for sending workers to Korea under the Employment Permit System (EPS). The memo-randums of understanding (MOU) governing this matter were signed on July 2004.
4. Energy: the two countries had their Annual Meeting of Joint Commission between the related ministers.
5. Maritime and Fisheries: Following the signing of the MOU in 2002, Korea granted eight fishing vessels to Indonesia, some of which were already sent to Indonesia while the remaining vessels are pending. The two ministries also set up a joint committee.
There is also an agreement between the Indonesian Ministry of Marine and Fisheries and the Busan City Government to mutually parti-cipate in any fisheries expo held in both countries.
6. Forestry: The two countries have established a forestry committee cooperating in many projects. They made a joint statement on the call for "Combating International Trade in Illegally Harvested Forest Products." They have been undertaking cooperation on (1) Eco-tourism Program Development; (2) Forest Plantation Development; and (3) Fellowship for Training and Degree Program on Forestry. In addition, KOICA is now undertaking a feasibility study in Indonesian mangrove rehabilitation projects.
7. Small and Medium Sized Enterprises (SMEs): Both countries continue to boost cooperation on this sector. SMEs are seen as having major roles in economic growth and employment. The Indonesian Ministry of Co-operatives and SMEs and Korea Small and Medium Business Administration (SMBA) signed the MOU in 2001.
8. Tourism: The two related ministries are now in the process of signing the MOU to develop further cooperation on tourism.
9. Science and Technology: Indonesian National Atomic Energy Agency (BATAN)and Korea Atomic Energy Research Institute (KAERI) signed an arrangement for cooperation in the peaceful uses of nuclear energy in 1995.

As for investment, the cumulative value of approved Korean investment in Indonesia for the period of 1967-2005, accounted for around US$11 billion in more than 1,000 projects. It ranked Korea at number 8th as the biggest foreign investor in Indonesia.
But in terms of number of projects, Korea has been number one for the last few years. Most of the Korean investors are small/medium-sized companies working on manufacturing such as textiles, garments, toys, plastic-ware etc. The giant companies like LG, Samsung and Ssangyong are also established in Indonesia.
Bilateral trade in 2004 reached a volume of US$10.04 billion in which Indonesia enjoyed a surplus of US$2.7 billion. In 2005 (until November) the trade volume increased to US$11.8 billion with a surplus of US$2.7 billion going to Indonesia.
Indonesia's main exports to Korea were natural gas, petroleum oil, and coal and copper ores, while Indonesia's imports from Korea were mainly petrochemicals, machinery and vehicles. The chambers of commerce and industry of both countries have also been playing a role in cooperating to increase the trade volume and value through various efforts.
A number of obstacles hindering the bilateral trade flow among others are: (1) limited types of Indonesian products competitive in the Korean market; (2) Korean policy to restrict imports on several commodities; (3) various tariffs and non-tariffs by the Korean government imposed on imported goods.
Cooperation also happened in social-cultural fields. Exchange visits of cultural missions including tourism have been organized between the countries either at the national level or under the framework of sister city cooperation. Several Indonesian and Korean universities have also built sister universities to make bilateral cooper-ation closer. The number of Indo-nesian students attending universities in Korea to master a specific subject or learn the Korean language is in-creasing.
It is no wonder since Korea is gaining popularity in Indonesia thanks to its economic achievement as well as the Korean Wave (Hallyu). Not to mention, around 40,000 Koreans live in Indonesia, while more than 25,000 Indonesians stay in Korea. The fact that the Korean National Museum has been now displaying some 109 artifacts of the Indonesian National Museum's collection for two years since October 2005 also portrays the intimate relations of the two countries.
In the field of military, both countries have regular talks, exchange students and visits, such as Navy-to- Navy Talks (NNT); Airmen-to- Airmen Talks;and a joint Defense Logistics and Industrial (JDLIC) Meeting.
Furthermore, ROKAF has bought eight aircrafts (CN-235) from Indonesia, while the Indonesian Air Force bought KT 1B from Korea. In addition, Indonesia has purchased several war equipment including warships and four landing platform docks two of which will be made in Indonesia. In addition, Indonesia is still maintaining its submarine in Korea.

The democracy of Indonesia, after the first ever-direct presidential election, serves to restore our economy and investment sector, enhanced by law enforcement, eradicating corruption and nepotism, and strengthening security and stability. It is also important to note that the government has been doing well to curb terrorist activities as well as building international cooperation for combating terrorism.
The success story of the Indonesian government in combating terrorism has been widely recognized by international communities. It can thus be said that the stable and democratic nation of Indonesia will in turn serve as a foundation to enhance bilateral relations between Indonesia and Korea since the relations of both countries show continued improvement in 2005.
Mirroring the 2005 trend, it is expected that 2006 will see even more improved relations of both nations, as there are still unexplored areas of potential. At the sideline of the APEC Summit in Busan, on Nov. 18, 2005, both leaders re-stressed their commitment to enhance the existing strong bilateral relations between the two countries.
This commitment would be further discussed during President Susilo B. Yudhoyono's visit to South Korea possibly in the first half of the year 2006, and President Roh Moo-hyun's visit to Indonesia in the latter half of the same year.
Despite the world oil price hike in 2005, the prospect of economic ties remains strong as both countries are still on the right track. While continuing the existing cooperation in various sectors as mentioned above, cooperation looks to be widened in the near future.
The Indonesian administration has devised policies to boost economic growth to 6.5% annually until 2009. One of the programs includes building infrastructure nationwide both to create massive employment and to drive economic growth.
To this end, Indonesia will organize an infrastructure summit in 2006 as a continuation of the same summit in 2005 inviting more than 1500 domestic and foreign companies as well as foreign governments to participate in the US$1.82 billion worth projects.
In this regard, the Indonesian government expects both the Korean government and various Korean companies in the fields of constructions (road, railways,bridges, airports and seaports), energy, information and communication technology (IT), water supply, banks etc. to take part and join the projects discussed at the summit. By doing so, the Korean side has the opportunity to directly introduce its technology to an around 240 million population of Indonesia. The success of the summit will bring prosperity to Indonesian people, which in turn strengthens bilateral cooperation.
Korea is well recognized for its rapid development in science and technology, and this has made Korea the 11th most developed economy in the world. In this connection, bilateral cooperation in science and technology would possibly be enhanced in fields such as nuclear power, biotechnology as well as research and development.
The mutual and complimentary relations between Indonesia and Korea have been indeed strengthened through times in political, economic, sociocultural, and defense terms. 2005 witnessed the trend of improvement, which will continue in 2006.
Bearing this in mind, it is expected that bilateral ties will be further enhanced in a more vibrant and dynamic way. The in-volvement of the Korean government as well as the private sectors will also grow deeper in the Indonesian economy in the years to come.