Business Breakfast Meeting with Umar Hadi, Indonesian Ambassador to Korea
"Request for Prompt Ratification of the Comprehensive Economic Partnership Agreement between the Two Countries"
[Asia Economy Reporter Dongwoo Lee] Domestic companies related to smart cities, roads, and water resources requested the Indonesian government to expand opportunities for active participation in the new administrative capital construction project.
On the 27th, according to the business community, the Federation of Korean Industries (FKI) held a business breakfast meeting at the FKI Hall in Yeouido in the morning, inviting Umar Hadi, the Indonesian Ambassador to Korea, to discuss ways to enhance economic cooperation between Korea and Indonesia after the COVID-19 pandemic.
At the meeting, domestic businesspeople requested ways for Korean companies to actively cooperate in the Indonesian government's new administrative capital construction project, which is worth about 40 trillion won. This project is an urban planning initiative to dualize the current capital Jakarta as the economic and financial center and the new capital in the Kalimantan region as the administrative center. The Indonesian government plans to start construction in 2021 and relocate the capital by 2024.
FKI Vice Chairman Kwon Tae-shin said, "This project requires cooperation among various stakeholders, including the Indonesian government, state-owned enterprises, and domestic and foreign private companies, to succeed," and added, "We ask for the Ambassador's special attention and support so that many Korean companies can participate."
He also urged active efforts to promptly ratify and implement the Comprehensive Economic Partnership Agreement (CEPA) between the two countries. CEPA is a trade agreement similar to a free trade agreement, covering not only trade in goods and movement of personnel but also comprehensive exchanges and cooperation.
According to FKI, the trade volume between the two countries in the first quarter of this year decreased by 8.0% in exports and 14.6% in imports compared to the same period last year. They explained that active implementation of CEPA ratification and enforcement is necessary to strengthen economic cooperation between the two countries after COVID-19.
Finally, they requested easing the entry restrictions for Korean businesspeople into Indonesia to the level of China's fast-track system.
Vice Chairman Kwon said, "Since May, special quarantine procedures for fast-track entry have been implemented for Korean businesspeople visiting China, so the entry procedures for Korean businesspeople in Indonesia should also be improved by June."
In response, Ambassador Umar Hadi said in his keynote speech, "From this year, President Joko Widodo's second-term government is creating a favorable environment for business and plans to reduce corporate tax rates to 22% by 2022 and to the 20% range by 2023 to expand foreign investment." He added, "We are changing the foreign investment restriction list to a negative list system and are in the process of legislating labor reforms focused on introducing flexible working hours."
Meanwhile, 24 related company and institution representatives attended the meeting, including Vice Chairman Kwon, Hwang Soo, President of Iljin Electric, Heo Kyung-gu, President of Korea Overseas Infrastructure & Urban Development Corporation, as well as representatives from Lotte Chemical, Daewoo Shipbuilding & Marine Engineering, Hanwha Corporation, Doosan Heavy Industries & Construction, Hyundai Motor Company, POSCO, KB Kookmin Bank, Woori Bank, Chong Kun Dang, Daesang, GS Construction, Ssangyong Construction, the Overseas Construction Association, law firm Yulchon, and Samjong Accounting Corporation.
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