German investors told to stay in Indonesia

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)