German investors told to stay in Indonesia

JAKARTA (JP): A former German economics minister has advised his compatriots to persevere in crisis-hit Indonesia to maintain market share for when the economy rebounds.

"I can only ask you to stay, invest and work for better days," Otto Graf Lambsdorff, a two-term minister in the late 1970s through early 1980s, said on Thursday.

Speaking at a luncheon forum organized by the German- Indonesian Chamber of Commerce and Industry (Ekonid) here, Lambsdorff said he was confident there would be a future turnaround and stirrings of economic recovery were already evident.

"At the moment, I'm a little doubtful because economic activities have slowed down, but investment is not a question of this moment, it's a question of the future."

The country remained a "solid and safe economy, and a very important market".

Many major German industrial companies have 50 percent of their workforce outside of Germany because of high taxes and labor costs at home, he said.

They relocate operations to markets with lower taxes and production costs and more flexible labor markets, he said.

"So I'm very much in favor that German companies invest in this country."

Although Lambsdorff believed it unlikely that Germany companies would pull out due to the slump, he said investors needed assurances the country was moving toward implementation of democracy.

"Democratic development will give more confidence and more stability for the industrial investments.

"We've seen the nondemocratic countries finally led to destruction, as we, unfortunately, had seen in this country."

The situation created instability and insecurity, which was not conductive to operations of the business community and corporations.

Since Soeharto resigned in May following massive social unrest, the country has undergone rapid political changes against a backdrop of continuing economic turmoil.

In a development almost unprecedented during Soeharto's 32- year rule, political figures and student demonstrations have openly questioned the legitimacy of B.J. Habibie's government, denouncing it as a mere extension of the former regime.

Heartening changes have also been undermined by violent outbreaks, including two riots in Jakarta in the last two weeks. (das)