German-Indonesian business, industry ties

German-Indonesian business, industry ties

BONN (JP): German business and industry interests in Indonesia
as an economic partner have not been diminished by an ongoing
financial and monetary crisis there and they continue to regard
the nation as an important trading partner and location for
German investments in the Asian region.

This was emphasized by the participants at a conference on the
current political and economic situation in Indonesia held
recently in Frankfurt. About 200 representatives of Germany's
trade and industry attended the conference. They were joined by a
high-ranking Indonesian delegation of government officials and
businesspeople, led by the Minister of Industry and Trade Rahardi
Ramelan.

The conference, Indonesia Today, was convened jointly by the
Credit Bank for Reconstruction (KfW) in Frankfurt, the Asia-
Pacific Committee of the German Industry in Cologne and the
German-Indonesian Forum for Economy and Technology.

Representatives of German industries and business and
industrial associations reaffirmed their confidence in the
Indonesian economy and expressed their readiness to help the
nation to overcome its difficulties through investments,
technology and know-how transfer and promotion of trade.

Germany was ranked as the 10th largest foreign investor in
Indonesia in 1997, with direct investments during the first six
months of 1998 increasing to DM 131 million from DM 126 million
registered for the whole of 1997.

Former minister for economics Dr. Guenter Rexrodt, told the
conference that the German government expressed confidence in
Indonesia's ability to emerge from the crisis in the near future
and assured continued assistance to cope with its difficulties.

As a demonstration of confidence in the Indonesian economy,
Germany is sticking to its plans to hold a Technogerma exhibition
in Jakarta from March 1 to March 7, 1999. Indonesia is the only
country where the German industry and technology show will be
held for the second time.

The German Center for Industry and Trade in Bumi Serpong
Damai, near Jakarta, which was recently completed, is expected to
give a further boost to bilateral industrial cooperation and
trade, especially between small and medium-sized enterprises
(SMEs).

The German government holds the view that Indonesia's
financial crisis should not be seen as a setback, but as an
opportunity to implement structural reforms needed for more
competition and strengthening private initiative, which will
create the conditions for more investments, new employment
opportunities and increased incomes for the population.

Foreign enterprises will strengthen the international
competitiveness of the Indonesian economy. It is also very
important to continue Indonesia's cooperation with the IMF, which
will guarantee international solidarity and support also in the
future.

Rahardi told the conference that vast opportunities for German
investments existed in the area of exploiting Indonesia's natural
resources. German companies could also benefit from various
incentives given to promote the production and export of a
variety of manufactured goods.

Dr. Gert Vogt, KfW's Managing Board spokesman, said the
fundamental strength and potential of the Indonesian economy are
still there and, therefore, the crisis should be seen as a chance
to make a new course toward long-term and sustainable
development. He commended the "bold steps" taken by the
Indonesian government to lay the foundation for the country's
economic recovery. He expressed the view that the outlook for
overcoming the crisis in the foreseeable future was very
promising if the government continued its reform course. He
offered the KfW's continued assistance, together with its
partners in Indonesia and in Germany, to accelerate the process
of economic recovery.

So far, the KfW has made available to Indonesia grants and
credits amounting to DM 14.5 billion, out of which DM 10 billion
was given as commercial credits for long-term export and project
financing and supporting the SMEs, while the remainder was given
as grants and soft-term credits within the framework of
development cooperation between the two countries.

Germany is one of the main trading partners of Indonesia and
bilateral trade has been growing rapidly. The total volume of
exchange of goods for the first time reached DM 9.28 billion in
1997 as Germany's exports to Indonesia went up by 30 percent to
DM 5.2 billion, while Germany's imports from that country
increased by 23.8 percent to DM 4.07 million. K.M. Mathew