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South Korea Interested in Investing in the Nusantara IKN Project

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By: Shenna Aprilya Zahra )* 

Projects in the National Capital City (IKN) of the Archipelago seem to have attracted investors from abroad, one of which is South Korea, which is attracted by various large projects in Indonesia, ranging from IKN to downstream projects. The ability to work on large projects is the reason South Korea can contribute more to strategic projects.

The Governor of South Korea’s Financial Supervisory Services (FSS), Lee Bokhyun admitted that his party had heard and read a lot about the economic development plans being intensified by the Indonesian government. Most of these plans have a lot of room for Indonesia-South Korea to provide mutual support.

Lee Bokhyun said, South Korea has experience in large-scale construction projects offshore or in other countries and his party also has experience in financing such projects.

Another example, several minerals such as nickel and copper owned by Indonesia are of particular interest to Korea. Several industries with high added value, Lee claims there are several roles that Korea can play.

Lee said that nickel owned by Indonesia should be further processed. This mineral can be a raw material for batteries which in turn are needed by certain industries. Therefore, Lee hopes that Indonesia-Korea cooperation can continue to be strengthened and improved.

Lee feels that cooperation between Indonesia and Korea will be a good factor for diversifying investments and strategic partnerships to expand the scope of Indonesia’s partnerships, for example with China.

Meanwhile, President Joko Widodo (Jokowi) has received visits from 16 delegations from South Korea (South Korea) in order to enhance bilateral cooperation between the two countries. The Indonesian Ambassador to South Korea, Gandi Sulistiyanto said that 102 cooperation MoUs had been signed by Indonesia and South Korea in building IKN.

Gandi revealed that investment in IKN was one of the main topics discussed by President Jokowi with the South Korean delegation. Gandi said that last March his party had assisted 57 South Korean construction entrepreneurs to directly observe the construction of the IKN. Until now, there have been 102 MoUs on cooperation between Indonesia and South Korea that have been signed for the development of IKN, one of which is the construction of irrigation canals, which currently has reached 20%.

In addition to the construction of irrigation canals, South Korean construction companies are also exploring the possibility of cooperation to build the Balikpapan-Samarinda toll road. Gandi said the cooperation would soon be signed after the government had completed land acquisition and residents’ land.

The South Korean side is optimistic that the cooperation can be signed soon because the delegation from the country of ginseng has seen how fast the government is in building infrastructure at the IKN.        

Chairman of the Indonesian People’s Consultative Assembly as well as Chair of the Indonesia-Korea Network for IKN Nusantara, Bambang Soesatyo expressed his appreciation for South Korea’s support for Indonesia’s steps in building the Archipelago IKN in East Kalimantan. Even so, there are a number of things that must be considered so that the development of the Archipelago IKN can continue.

According to him, there is a public opinion in the international community, including South Korea, that they will feel more confident and comfortable if there is a legal regulation that ensures the progress of the development of the Nusantara National Science Institute can continue, even though President Joko Widodo will no longer serve as President of Indonesia.

the various investments made by South Korea in Indonesia will actually further strengthen the bilateral relations between Indonesia and South Korea, which this year will be 50 years old. The celebration of diplomatic relations will be commemorated at the Fairmont Hotel, Jakarta on May 16 2023. Apart from being attended by officials from the two countries, the plan is to also invite 120 more companies from South Korea that have and will invest in Indonesia.

One of the proofs of South Korea’s seriousness to invest in IKN is the visit of South Korean Minister of Agrarian Affairs, Infrastructure and Transportation, Won Hee-Ryong to the IKN construction site in Sepaku District.

Won Hee-Ryong along with 50 businessmen from Korea saw the progress of infrastructure development at the IKN, starting from the Sepaku Semoi Dam, the Presidential Palace, the Western National Axis, Construction Worker Housing and the IKN Zero Point.

The cooperation established between Indonesia and South Korea is proof that the two countries do not only have bilateral relations, but have become special strategic partners.

The progress made by the Indonesian government seems to have attracted the interest of foreign investors, one of which is from South Korea. This shows that the government is serious about cooperating with various parties.

)* The author is a contributor to Nusantara Reading Room

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