German-Indonesian business ties shining despite crisis
German-Indonesian business ties shining despite crisis
The German business engagement in Indonesia looks back on a long and proud history, some German firms have been active in Indonesia for more than 100 years. Today, more than 150 German firms are present in Indonesia.
Accumulated German direct investment to Indonesia is approximately Deutschmark (DM) 2 billion, and is concentrated mainly in the fields of telecommunications, metal works, pharmaceuticals, chemical products and power plants.
Despite the dramatic business slow-down in Indonesia since 1997, no German firm active here has decided to pull out of Indonesia, a clear sign that they still consider Indonesia a promising business location for the future.
Some German firms even took the opportunity to increase their economic engagement in Indonesia in recent months.
The volume of bilateral trade between Germany and Indonesia has also been severely affected by krismon (the monetary crisis), with German exports to Indonesia showing a much sharper decrease than Indonesian exports to Germany; the year-on-year figures for 1997/1998 indicate a 35.9 percent decrease of German exports to Indonesia and only a 3 percent decrease of German imports from Indonesia.
In 1998, Germany exported goods to the value of DM 3,339 billion to Indonesia (mainly machines, electrotechnical products, ships and chemical products), and imported goods to the value of DM 3,957 billion (mainly clothes, electrotechnical products, coffee, fats and plant oils), resulting, for the first time, in a trade deficit in favor of Indonesia to the tune of DM 618 million.
To the German trade deficit with Indonesia must be added the expenses by an approximately 150,000 Germans traveling to and in Indonesia every year. It is expected that tourism will become an even more important factor in German-Indonesian business relations, creating revenue for Indonesia of about DM 200 million per year. To underline this point, figures for Bali from the first half of 1999 already show a promising increase of the number of German tourists compared to 1998.