COUNTRY PROFILE -- THE NETHERLANDS

COUNTRY PROFILE -- THE NETHERLANDS
ARTICLE PROVIDED BY THE EMBASSY

Message from the Ambassador of the Netherlands, Mr. Ruud
Treffers, on the occasion of the celebration of Queen's Day on
April 10, 2003

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The official celebration of the birthday of Her Majesty Queen
Beatrix of the Netherlands, our national day, presents a good
opportunity to reflect upon the relations between Indonesia and
the Netherlands. It is with great pleasure that I can observe
that our bilateral relations are broad-based and in good shape.

This goes for the cooperation between our respective
governments, as well as for the manifold relations between
individuals and organizations from both countries.

Historic and cultural ties

The solid and historical foundations on which the relationship
between the Netherlands and Indonesia is built, provide a sound
base for constructing new and vital relations.

Both our countries are still in the process of dealing with
our past and some issues can still be sensitive. Take for example
the commemoration of 400 years of the VOC last year, which was
not welcomed by everybody. At the same time the relations between
our countries have significantly improved during the last few
years and our common past has also proved to be a source of
inspiration.

A good example of this is our cultural cooperation in the form
of frequent performances and exhibitions at our cultural center
here, Erasmus Huis, as well as in the many activities to preserve
archives, monuments and objects of art. There are only two
countries in the world where the Netherlands has its own cultural
center: the Institut Nierlandais in Paris and the Erasmus Huis in
Jakarta.

The importance of Indonesia in Dutch foreign relations is also
a result of the large number of people in the Netherlands of
Indonesian descent. About 750,000 to 800,000 people living in the
Netherlands have their roots in Indonesia, which is about 5
percent of the Dutch population. For this reason many Dutch
people are interested in developments in Indonesia and in the
relationship between Indonesia and the Netherlands. And it also
explains why you can find an Indonesian restaurant in every city
and village in the Netherlands.

Development cooperation

Of prime importance for the Netherlands in its bilateral
relations with Indonesia is the territorial integrity of
Indonesia, and support for the transition of the country toward a
solid democracy and a free economy.

This support is materialized through an intensive development
cooperation relationship with Indonesia, which was resumed in
1999. Indonesia is now the largest recipient of Dutch development
cooperation, with an amount of approximately 60 million euro per
year.

This makes the Netherlands one of the largest donors of grant
funds in Indonesia. Poverty alleviation is central in the
cooperation with Indonesia. Assistance is given to sectors marked
as priorities by the government of Indonesia, namely a)
education, b) good governance, c) water management and d)
community recovery.

Sectoral approach

a) In the education sector alone the Netherlands is spending
30 million euro annually directly on basic education. The
Indonesian authorities indicate to which schools in the poorest
areas the money should be allocated for the repair of school
buildings and scholarships for students.

b) In the area of good governance the Netherlands contributes
to the so-called Partnership for Governance Reform. The
partnership has chosen several priority sectors to promote good
governance. The most important are: a clean, fair and transparent
legal system, effective public service, participation of society
in the reform process and civilian control over security and
order.

Within these sectors special attention is given to the current
decentralization process, judicial reform and the fight against
corruption.

c) In September 1998 the Community Recovery Program (CRP) was
launched in response to the severe financial and economic crisis
that has hit Indonesia since July 1997. The CRP is not only
focused on poverty alleviation, but also on developing a network
of community-based organizations throughout the country to tackle
structural conditions that trap the poor in poverty. Another
program in this sector is the Kecamatan Development Program (KDP)
conducted by the World Bank. The Dutch grant to KDP made it
possible to reach one out of every four villages in Indonesia and
enabled the program to conduct small-scale infrastructure, social
and economic activities.

d) The largest program in the area of water management
supports the further strengthening of Water Users Associations
for the management of irrigation networks in 13 provinces.

Furthermore, our country remains willing to provide emergency
aid and reconstruction assistance to regions in need. An example
of this is the humanitarian aid to Maluku and North Maluku to the
amount of six million euro per year.

Cooperation through multilateral agencies

The majority of the Dutch funds are channeled through
multilateral agencies such as the World Bank, the Asian
Development Bank and the United Nations Development Program,
which are responsible for the supervision and coordination of the
funds.

This means that Dutch funds are not being used to finance
stand-alone Netherlands projects, but are always mainstreamed in
Indonesian policies and in multilateral financing. In this way
these contributions benefit from a leverage and aim to be
effective and sustainable.

Economic relations

In the economic field, a lot of Dutch companies are
established in Indonesia. While it may be true that Indonesia is
trading more with Asia and with the United States than with
Europe, the Netherlands is still a major investor in Indonesia
with investments amounting to 220 million euro in 2002.

Intensive bilateral trade between Indonesia and the
Netherlands of more than 1.7 billion euro in 2002 resulted in a
large trade surplus for Indonesia.

The Netherlands offers several financial instruments to
stimulate trade relations between Dutch and Indonesian companies.
One of those instruments is the Program for Cooperation with
Emerging Markets (PSOM). The Netherlands and Indonesia have
recently decided to continue this program, which aims at
cofinancing pilot projects in order to facilitate long-term
investments and to promote a lasting trade relationship between
Indonesia and the Netherlands.

Tourism

Unfortunately the Indonesian economy, and especially the
tourism sector, has been adversely affected by terrible events
such as the Bali attacks, the war against Iraq and only recently
the outbreak of Severe Acute Respiratory Syndrome (SARS) in the
Asian region.

For the revival of the tourist industry, of which Dutch
visitors have always been enthusiastic and regular clients, it is
important that Indonesia continues to take all necessary steps to
prevent terrorism and other forms of violence from happening in
this country.

The same goes for preventive measures against the spread of
SARS. By implementing and highly publicizing these confidence-
building measures, I am convinced that tourists will start coming
back to Indonesia.

Study in the Netherlands

A continuous contribution to the strengthening of the
friendship between our countries is made by the exchange of
students. Many Dutch students and scientists visit Indonesia
every year, while many Indonesian students are given the chance
to study in the Netherlands.

The opportunities by means of scholarships and grants for
studying at one of the many universities and institutes of
professional education in the Netherlands are manifold and still
increasing. The Netherlands Education Centre in Jakarta is the
place to get information or personal advice on this matter.

This interest in the Netherlands is also expressed by the fact
that each year the Erasmus Language Centre in Jakarta attracts
almost 2,000 students for its courses. This large number can
partly be explained by the need to learn the Dutch language and
to study Dutch law and history in order to fully understand the
Indonesian legal system and the history of the country, but also
by the many personal contacts that exist and still grow.

It is my hope that the special bond many Indonesian and Dutch
people feel toward each other will continue to exist for many
years to come.