S. Korea, Indonesia agree to beef up economic ties

SEOUL, May 18 (Yonhap) -- South Korea and Indonesia agreed Wednesday to strengthen bilateral economic ties as Jakarta moves forward on its development plan to transform itself into the world's sixth-largest economy by 2025, the Seoul government said. Commerce ministers from the two countries signed the economic cooperation partnership memorandum of understanding (MOU) at the first ministerial-level economic cooperation task force meeting in Bali, Indonesia, the Ministry of Knowledge Economy said. The agreement lays the foundation for expanding cooperation in seven key sectors including industry, energy, agriculture and defense, the ministry said. The deal is the first significant follow-up to Seoul's pledge to play a key partnership role in the Acceleration and Expansion of Indonesia Economic Development 2011-2025 master plan. President Lee Myung-bak and his Indonesian counterpart Susilo Bambang Yudhoyono made the commitment in early December. Besides the governmental agreement, seven other MOUs and memorandums of agreement (MOAs) were reached between businesses and related agencies from the two countries in such areas as hydroelectricity, solar power, shipbuilding, textile machinery and industrial technology transfer. The MOUs and MOAs outline South Korean companies' construction and operation of two hydroelectricity power stations in the province of Lampung, forging tie-ups in solar and bio energy resources development, and farming modernization. The agreements also call for Seoul to help Jakarta establish a plan to build up its shipbuilding industry and to allow more assistance funds and project financing to be used in development projects. "Knowledge Economy Minister Choi Joong-kyung will meet both President Yudhoyono and Hatta Rajasa, Indonesia's coordinating minister for economic affairs, to outline Seoul's commitment to fulfill its role as a partner," the ministry said. More than 100 representatives from the local business community will accompany Choi. The ministry, meanwhile, said close ties with Indonesia are important because the country aims to achieve average annual economic growth of 7 percent up to 2025 that will give it a gross domestic product of US$26.7 trillion in the target year. To reach the goal, the archipelago country plans to invest $16 trillion in various projects in the next 15 years, with infrastructure building alone to get $87 billion by 2014. Such large investments could open new business opportunities for South Korean companies.