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.