German-RI ties: A long history of partnership

German-RI ties: A long history of partnership

By Dr. Fritz Kleinsteuber

The bilateral economic relationship between our two countries
is based on a long and solid tradition. Some companies from
industry and trade can look back on almost 100 years of permanent
activity in Indonesia, even during the World Wars. German
products have always been part of Indonesia's daily life, in
industry as well as in the field of consumer products. Essential
to the typical Indonesian way of doing business has always been
the mutual trust, even friendship, among partners.

Germany's role as business partner and supplier to Indonesia
used to be much more prominent and was almost self-understood
during the days before Indonesia's industrialization started to
take off. However, Germany, as a highly-industrialized export
oriented country, is somewhat of a latecomer in Asia in regard to
investment.

However, times have changed and Indonesia has become an
almost-industrialized country. German companies are now adjusting
their strategy to the global economy. They realize that in order
to do business in countries like Indonesia, they have to get
really involved. That, of course, leads to investments. Whereas
our trade volume with Indonesia has steadily increased over the
years -- to a maximum of almost 7.5 billion deutschemarks in
1995, of which about 4 billion deutschemarks are for German
exports -- German foreign investments in Indonesia are now
starting to pick up.

Yet, if we look at the official foreign investment tables,
Germany is not a very prominent player. More interesting seems to
be the number of medium-sized German companies now setting up in
Indonesia, in fields important to the development of the country;
mainly metalworking and investment products.

This medium-sized sector is essential for an industrialized
country; such businesses are needed and the German partners have
discovered Indonesia is one of the important countries where they
must be present.

In 1995, the Indonesian-German Economic Association (EKONID)
began establishing almost 40 German companies in Indonesia. This
is a promising trend. In order to facilitate investment plans and
support and coordinate these efforts, a number of supporting
partners and institutions have joined forces. The government of
the Federal Republic of Germany and several federal states are
actively implementing the newly formulated Asia policy.

During the visit of Chancellor Dr. Kohl in Indonesia, the
Federal Minister for Economics, Dr. Gunter Rexroth, shall
officially mark the start of the first German Industrial Estate
Project in Asia.

Located in Bumi Serpong Damai, the present Technopark shall
include a German-Indonesian Industrial Estate Complex. Small and
medium-sized German-Indonesian joint ventures will not only find
a perfectly suitable location for technology-oriented
manufacturing investments, they may also call on a service-
package, which should address every need.

Joint ventures should be able to start immediately with their
manufacturing and business, without wasting time on preparations
or the many procedures they normally would have to go through.

At the same time, the Landeskreditbank Baden-Wurttemberg, a
development bank of the federal state, shall build a German
Center for Industry and Trade, offering office space, maintenance
and repair facilities, rooms for workshops and conferences,
training in business trades and most probably technical skills.

In 1997, the new International German School will be built in
Bumi Serpong Damai and both governments are, at present,
negotiating for the establishment of an Indonesian German
Institute, an educational facility for technical skills of the
highest sophistication. All these new activities are a sound
mixture of private and public efforts, targeted toward a sound
and fair business development between our two countries.

The effect on Indonesia's development could be tremendous:
partnerships in industrial manufacturing, transfer of the latest
technology know-how, and considerable employment opportunities.
There is now doubt, Indonesian-German business cooperation is
developing into a bright future. More than 100 years of
friendship and good business cooperation give us confidence and
optimism.

Dr. Fritz Kleinsteuber is director of Indonesian-German
Economic Association.