Korea-Indonesia trade still developing
Korea’s economic relationship with Indonesia has so far been in the development stage, largely because Indonesia’s economy has been in critical condition in recent years, with an unstable political environment leading to chronic inflation and a long-term economic recession.Indonesia’s economy grew rapidly in the 1970s and 1980s due to greater demand for oil, but like Korea, its economy plunged during the Asian financial crisis of the late 1990s.
During the most recent 2008 global economic crisis, however, the Southeast Asian country has shown a resilience under its current president, Susilo Bambang Yudhoyono.
“Despite the 2008 global economic crisis, the country achieved 6.1 percent economic growth that year,” said the Korea Trade-Investment Promotion Agency.
The majority of industrial activity in Indonesia stems from its abundance of natural resources, including oil, gas and agricultural produce. In recent years, its manufacturing sector has also been growing, and paper and metal products, fabric and shoes have been the most noteworthy exports from Indonesia, according to the Indonesian statistics bureau.
Bilateral trade between Korea and Indonesia has grown steadily in recent years. In 2003 and 2004, trade volume between the two countries totaled $8.6 billion and $10.1 billion, respectively. By 2008, trade volume had more than doubled.
As of the end of 2008, trade volume between the two countries totaled $19.2 billion. That year, Korea exported $7.9 billion in goods and services to Indonesia, a 37 percent rise from the previous year, while importing $11.3 billion worth, or a 24 percent rise from 2007. Korea ranks fifth among trade partners for Indonesia, while Indonesia ranks 11th among Korea’s trade partner countries. Key exports from Korea to Indonesia include ships, diesel and chemical and electronic products, according to the Korea International Trade Association.
Korea’s investment in Indonesia was around $300 million in 2008. Korea ranks sixth in investments there, following Singapore, Japan and the U.K., among other nations.
“Korea’s investment in Indonesia is on the rise, as China’s investment environment has weakened and Korean companies’ interest in Indonesia is climbing,” said an official at Kotra.
By Cho Jae-eun [jainnie@joongang.co.kr]
with the Korea JoongAng Daily
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