News / Asia

North Korea Tries to Drum Up Investment in Southeast Asia

Kim Yong-nam, left, North Korea's president of the Presidium of the Supreme People's Assembly, and Indonesian President Susilo Bambang Yudhoyono walk to a greeting ceremony at the Merdeka Palace, Jakarta, May 15, 2012.
Kim Yong-nam, left, North Korea's president of the Presidium of the Supreme People's Assembly, and Indonesian President Susilo Bambang Yudhoyono walk to a greeting ceremony at the Merdeka Palace, Jakarta, May 15, 2012.
Kate Lamb
JAKARTA, INDONESIA - Kim Yong-nam, North Korea’s second-highest ranking official, is on a three-day trip to Jakarta, Indonesia, where he is reportedly drumming up support for foreign investment in one of the world’s most isolated countries. Kate Lamb reports from Jakarta.
While most nations shun North Korea, Indonesia has maintained good relations with the country since 1961.
When North Korea and Indonesia were both part of the non-aligned movement, the only trip the enigmatic Kim Jong-il ever took by plane was to Indonesia.
Indonesian Foreign Minister Marty Natalegawa says Tuesday’s bilateral meeting highlights a deepening relationship.
“There was determination to raise the bilateral relations to a higher level in a broad range of areas," said Natalegawa. "For example, the two leaders resolved to raise political relations between the two countries by promoting increased visits by leaders, by ministers, by officials, of the two countries. In addition, the two leaders agreed to enhance economic and trade cooperation links between the two countries.”
There were other signs of cooperation last week, when officials announced a media swap deal that would allow networks in both countries to share content. In the future, media organizations plan to participate in journalist exchanges.
Analysts say the deal is odd given that media in North Korea is among the most tightly controlled in the world.
Notoriously isolationist, Kim’s visit to Singapore and Indonesia this week appears to be part of North Korea’s plan to boost trade in the impoverished nation.
Despite the diplomatic pledges Tuesday, Peter Beck, a Korea specialist at the Asia foundation in Seoul, is skeptical that the countries are truly committed to tightening trade links.
“I think that’s just talk because North Korea doesn’t really have anything to offer Indonesia," said Beck. "North Korea has become a massive liability, an economic liability and political liability and I seriously doubt that North Korea has anything that Indonesia really needs. Frankly I think they [Indonesia] have much more to lose than to gain from dealing with North Korea.”
Beck says the North Korean regime is also trying to curb its reliance on China by reaching out to other countries in Asia.
Most western multinationals avoid direct business with North Korea because of the U.S. trade embargo, but these restrictions are not enforced in China.
Beck says there are a handful of countries that can help break North Korea out of isolation, but Indonesia is not one of them.
“They are certainly fully engaging with China but they don’t like the idea of China dominating their economy, but the only other countries that can really counteract the balance of China are the U.S. and South Korea," said Beck. "So until they start making overtures to Washington or Seoul, I think all their other trips are exercises in frequent flyer mileage accumulation.”
Washington has warned financial institutions in Singapore and Southeast Asia that they do business with North Korea at their peril.
Singaporean banks stopped doing business with North Korea several years ago and Indonesia is not one among the country’s top trading partners.
Indonesian president Susilo Bambang Yudhoyono Tuesday called for dialogue to resolve problems on the Korean peninsula, while the Foreign Minister suggested that isolating North Korea further was not a constructive solution.

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