A chance to close the gap

A chance to close the gap

It was with confidence that the Indonesian delegation, led by
President Soeharto, attended Sunday's opening of the "Hannover
Messe 1995" by German Chancellor Helmut Kohl.

Indonesia was chosen by the industrial fair organizers to be
Germany's "Country Partner" because of its successes in
economics, development and technology.

The confidence was further enhanced yesterday when President
Soeharto officially opened the two Indonesian pavilions in the
fair, attended among others by Chancellor Kohl. They are the
largest pavilions at the fair -- occupying an area of 4,200
square meters -- and connected to the celebration of Indonesia's
50th anniversary of independence.

The Hannover Fair is the appropriate forum to showcase
Indonesia's successes in industrial technology as it is the
world's largest industrial fair. This is the fair where the
latest developments in industrial technology from the world over
are exhibited every year to be examined by the scrutinizing eyes
of the international business community. Not surprisingly, more
than 100 Indonesian private and government-owned companies and
agencies are participating this year, taking advantage of this
unique gathering of very select businesses.

Obviously the showcasing is not an end in itself. It is only a
means to get to something else -- world business. Indonesian
executives participating in the fair are there not to show off
but to substantiate this country's progress and successes. This
is a golden opportunity to demonstrate Indonesia's capabilities
in industrial technology, which could make the business world
more competitive.

It will not be an easy job, considering the fact that this
country is not yet known in the business world as a source of
industrial technology. And Indonesia cannot afford to fail in its
efforts to promote its capabilities.

Take for instance the bilateral trade between Indonesia and
Germany. Indonesian exports to Germany grew from US$492.9 million
in 1989 to $1.18 billion in 1993 (latest available figure), or an
increase of 139.03 percent within four years. This figure looks
impressive, especially since it consists of non-oil-and-gas
exports only.

During the same period, however, Indonesia's imports from
Germany grew from $920.4 million to $2.07 billion, an increase of
125.16 percent, only slightly less than the export growth.
Indonesia's trade deficit with Germany has more than doubled,
from $427.5 million to $894.2 million. A preliminary figure for
the period of January through November 1994 shows that the trade
gap is still widening -- to $1.05 billion in favor of Germany.

Seen from a different point of view, both countries cannot yet
claim each other as a substantial trade partner. Indonesia's
exports to Germany amounted to a mere 0.61 percent of the total
imports flowing into Germany during the period of January through
August last year, the latest available figure. During the same
period, German exports to Indonesia amount to only 0.57 percent
of that country's total exports.

Another example is Indonesia's trade relations with the
European Union. In 1989 Indonesia imported $2.57 billion worth of
goods and services from the group and exported $2.34 billion
worth of goods and services to the nine countries of the EU at
that time. In 1993, the figures grew, respectively, to $5.65
billion and $5.30 billion, marking an increase in the trade
deficit of 51.04 percent within four years.

Those are the figures which challenge Indonesian executives in
Hannover these next few days. We can only hope that Indonesia's
promotional efforts during this fair will at least result in
closing the big negative gap.