Country Profile:

Country Profile:

Part -1

Italian ambassador Dr. Francesco M. Greco:
Come and invest in Indonesia

It is my privilege to assess the state of the relations
between Italy and Indonesia, as we regularly do every year,
through this prestigious newspaper.

The occasion is offered to me, once again, by the celebration
of Italy's National Day, which marks the anniversary of June 2,
1946, the day on which, through a historical referendum, the
people of Italy opted for a Republican form of State and turned
the page on dictatorship and the horrors of war.

Another year has passed -- an historical year for Indonesia.
It started with a crucial election process and it ended with the
tragedy of the natural catastrophe that hit Aceh and North
Sumatra on December 26.

With last year's electoral process, Indonesia has
democratically chosen its new parliament and its new president,
which was - for the first time - directly and peacefully elected
by the Indonesian people.

This historical electoral challenge - witnessed with
admiration by the entire world - confirmed that Indonesia is as
firmly as ever on a democratic path; one that has been painfully
but steadily undertaken after the political and economic crisis
of 1997-1998.

Today, at least from a political point of view, we can say
that the gloomy days of the crisis are definitively over:
political stability and the affirmation of democratic values are
now "recognized trademarks" in Indonesia.

Unfortunately, last year, Jakarta was once more the scene of a
terrorist attack that once again brought Indonesia to the center
of world attention. But Italy, as it did in all previous
occasions (during the Bali as well as during the Marriot Hotel
bomb attacks), reacted calmly and expressed its full trust in the
efficiency by which the terrorist threats are being fought in
this country.

Missions from Italy in all fields -- trade, culture, science
and technology -- took place regularly and we did not feel the
need to modify our Indonesia travel advice. Our trust in
Indonesia, its authorities and especially its people, remain
unshakeable and we believe that the country, by applying all
democratic means, will be able to overcome the difficulties posed
by its enemies.

I am glad to stress, once again, that relations between Italy
and Indonesia in all sectors remain extremely favorable. The
highest political figures of the two countries met in recent
months on several occasions, in Jakarta, in Rome and in other
capitals on the margins of important policy dialogue forums, such
as the Asia-Europe Meeting (ASEM) in Hanoi and Kyoto.

As far as cooperation in technology and military equipment is
concerned, after the bilateral agreement signed in 1997 and the
First Session of the ad hoc Joint Committee that took place in
2003, new and wide opportunities for stronger collaboration can
be disclosed.

Economic and commercial relations continue to progress
steadily. On this very same page, the Italian Trade Commissioner
in Jakarta provides data on the numbers and composition of this
trade exchange, underlining the growing opportunities that Italy
offers to Indonesian businesses interested in acquainting
themselves with the Italian market and in increasing the
possibility of economic and commercial cooperation with our
Country.

Italy and Indonesia are economic-commercial partners of old,
with the Italian Trade Commission opening its office in Indonesia
back in 1981. Big Italian companies have recently returned to
Indonesia and are definitely here to stay. Proof of this is the
presence of companies that have generously sponsored this page.

Some have been here for a long time; others have come more
recently. But they all represent proof of the extraordinary
potential offered by this country.

Nowadays, Indonesia represents for Italy and its production
system a strategic choice. It is a huge market, in an area of the
world (Southeast Asia) where - in spite of its physical distance
from Italy - many of my fellow citizens deem it wise to invest
and take root.

And this simply reconfirms the validity of our usual and well-
known message to the Italian business community: come and invest
in Indonesia, bearing in mind the immense potential of this
market, and contribute to the enhancement of bilateral relations,
towards a better understanding between our two peoples, and for
the welfare of the Indonesian population.

We always insist, on the other hand, on the necessity of a
more tangible improvement in its investment climate, at the same
time recognizing the effort that has already been put in place by
the new government in this particular field.

Long before the tsunami hit Aceh on Dec. 26, Italy showed its
continuous support for the development of Indonesia. The local
private sector, and particularly Small and Medium Enterprises
(SMEs) remain the main focus of our attention.

After Dec. 26, our support for Indonesia became as tangible as
ever. As a response to the disaster, Italy decided to put in
place a full-fledged aid package.

Financial aid

First of all, from the financial point of view, we immediately
decided to directly contribute to Indonesia's budget and to
accelerate the negotiations for a "debt for development"
agreement. We also decided, along with the Indonesian
authorities, to concentrate our resources (approximately US$31
million) in the tsunami hit areas; the framework agreement was
signed in Jakarta on March 9, 2005 by the Indonesian Minister of
Foreign Affairs H.E. Dr. Hassan Wirayuda and the Italian Minister
of State for Foreign Affairs H.E. Mrs. Margherita Boniver.

The agreement will allow Indonesia to implement social
development and environmental friendly projects with those
resources for the next 5 years.

Furthermore, as a result of the visit in Rome (Jan. 9, 2005)
of Foreign Minister Wirayuda and his meetings with the Italian
Deputy Prime Minister and Foreign Minister Fini and with the
Italian Minister of Economy Siniscalco, we are now evaluating the
modalities of a further debt swap for commercial loans worth
about 15 million euros. Italy also decided to cosponsor a
moratorium for the repayment of the contracted debt within the
Paris Club, which was recently accepted by Indonesia.

Secondly, as a response to the UN "Flash Appeal" launched in
Jakarta on Jan. 7, a contribution to the region for 16 million
euros has been committed. This amount is for various projects to
be implemented through UN Agencies. The first initiatives -- such
as those through the Food and Agriculture Organization (FAO), the
International Organization for Migration (IOM) and the World
Health Organization (WHO) -- are about to kick off.

Thirdly, a total amount of 10 million euros has been allocated
for bilateral initiatives to be carried out through the Italian
Development Cooperation Offices in Jakarta, Banda Aceh and
Bireuen, also a part of Aceh province. Those initiatives are
multisectorial; covering health, education and support for
vulnerable populations, as well as agriculture, fisheries and
housing. These will be implemented with the involvement of the
concerned Indonesian authorities and the local community.

Finally, various Italian stakeholders (Universities,
foundations, NGOs, local governments) are coordinated by the
Italian ministry of foreign affairs as far as their own
contributions to the tsunami-hit region are concerned. Among
them, several universities have already carried out studies for
possible cooperation, in some cases contemplating the possibility
of providing scholarships.

We believe Italy was able to put in place a full-fledged aid
program in a short time and in an effective way and we are proud
to be so committed, along with the rest of the international
community, to the recovery of the affected region and to its
prompt reinsertion into a peaceful, democratic and united
Indonesia.

The excellent relations already existing in the cultural field
have been further improving. The Italian Cultural Center in
Jakarta (Istituto Italiano di Cultura) continues to intensively
promote cultural activities, with the aim to improve knowledge of
the Italian language and culture among the Indonesian people.

These activities take place in Jakarta and in Indonesia's
major cities, through Italian language courses organized at the
Institute itself, with the involvement of Indonesian
Universities.

This year, over a hundred students in Jakarta are taking
Italian language courses, proof of the increasing interest that
our language and culture attract from the public and students of
this country. To respond to this demand, a new batch of
scholarships (over 200) for studying in major Italian
universities in being granted (for the third time) to Indonesian
students or graduates. Moreover, a series of intensive seminars
and workshops in the framework of bilateral agreements within the
scientific and technological field, have facilitated in-depth
discussions - in this fundamental and strategic sector - on the
wide range of possibilities of cooperation between our two
countries.

We must enhance the values that are common to our societies,
namely democracy, peace and liberty. Indonesia has become a
recognized model of a peaceful and multiethnic society; the
steady continuation of this path will allow this country to
consolidate its role as a solid partner of Europe, which deserves
to be recognized within Asia and more generally, in the Islamic
world. Italy feels that its own history, its culture and its
geographical position oblige her - even more than permit her - to
intensify her role of an ideal bridge between East and West. This
is the spirit by which we look at Indonesia, at its glorious past
and even more at its bright future.