[INTERVIEW] Envoy urges S. Korean firms to use Indonesia as regional production base

Lim Chang-won Reporter Posted : 2018-03-12 16:19 Updated : 2018-03-12 16:19
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[Umar Hadi, Indonesia's ambassador to South Korea. ]


SEOUL -- Indonesia with a young population, abundant natural resources and strong domestic spending can be used by South Korean companies as a regional production base covering Australia, India or even China, its top envoy in Seoul said, calling for business ties in areas such as healthcare, infrastructure and e-commerce.

Indonesia has significantly eased procedural and bureaucratic regulations on foreign investments to make it an easy country to do business, Ambassador to South Korea Umar Hadi said in an interview with Aju News.

Along with a stable political environment, Indonesia, a key member of the Association of Southeast Asian Nations, has a huge market backed by 265 million people. "The middle-class population is growing extensively, so more purchasing power and very strong domestic spending."

To upgrade its infrastructure, Indonesia is spending a lot of money on building roads, ports, airports and other facilities, Hadi said, adding there is a good business opportunity in mineral processing and smelting as well as in the downstream industry.

"Natural resources are everywhere," he said. "It just a matter of technology and capital and ideas on how to make natural resources into economically viable product resources."

With its median age standing at 28, Indonesia also has a young population which has better education and healthcare, the envoy said, describing young people as a very good pool of human resources.

Helped by the popularity of Hallyu (Korean cultural wave), Hadi said South Korean healthcare, pharmaceutical and cosmetics firms have a very good chance to move into Indonesia where everything related to South Korean pop music and dramas sells.

For Korean investors, Indonesia is an attractive place to do business because they can take advantage of millions of k-pop fans. "Korean culture is very powerful and it is high time," the envoy said.

"With Korean technology and capital, we can turn raw materials from Indonesia into compounds and then export to other parts of the world. This is a very sweet niche spot."

Indonesia has to build many more hospitals and health facilities, and demand for higher quality healthcare facilities is growing as many Indonesians now go abroad to get better healthcare, Hadi said. "So why not Korea invest in that area," he said, suggesting Korean companies can produce medical equipment such as incubators for babies using Indonesia's cheap materials and labor.

"In Indonesia, there's already a big market," he said. For example, Korean and Indonesian firms can jointly develop technology on remote medical services using smartphones because Indonesia is comprised of many islands.

Hadi said another promising field is e-commerce, one of the fastest growing sectors in Indonesia where young people never saw a fax machine or landline telephones and jumped a generation of technology along with a high rate of internet penetration and smartphone usage.

In Indonesia, it's easy to combine e-commerce platforms with traditional platforms, he said, citing many tech-savvy users who are open and receptive to new ideas and technology. "In Indonesia, any idea can come true."

Economies of Indonesia and South Korea can complement each other, Hadi said. "We can see a lot of improvement and growth in terms of trade, investment, and other collaborative economic ventures."

As South Korean President Moon Jae-in proposed during his trip to Jakarta last year, the two countries should elevate relations into a special strategic partnership and develop a spirit of helping and understanding each other, the envoy said.

"I think it's a matter of really working together and trying to find the best solutions, the best possible collaboration, to come up with mutually beneficial ventures," he said, urging young Koreans to come and find new opportunities in Indonesia.

The envoy said some 36,000 Indonesian workers in South Korea play a positive role as they can acquire work ethics and useful knowledge from South Korea. However, he expressed concern about industrial accidents and health problems. Last year, 26 Indonesia workers died because of accidents in the workplace.

To prevent industrial accidents and promote health and safety, he urged South Korean government officials and businessmen to enforce more safety and health regulations, provide education about the importance of healthy living and let them exercise regularly.

Indonesians hired by South Korean firms work overtime because they want to earn more money, exposing themselves to danger, the envoy said, proposing the dispatch of Indonesian medical teams to provide health-related education to them and a social campaign to promote marriages between Indonesian and Korean Muslims.

This interview was contributed by Aju Business Daily reporter Park Sae-jin.