Germany's exports to RI expected to fall 20 percent

Germany's exports to RI expected to fall 20 percent

JAKARTA (JP): Germany's exports to Indonesia are expected to
fall 20 percent this year due to declining orders from Indonesian
companies, a German businessman said on Thursday.

F. Kleinsteuber, the director of the German-Indonesian Chamber
of Industry and Commerce (Ekonid), said the economic crisis,
which has hit Indonesia since July last year, had severely
weakened local companies' ability to import.

"Since our main exports to Indonesia are heavy construction
equipment and spare parts, the downturn in many Indonesian
contractors and the property industry has also affected us," he
said in a news conference.

Kleinsteuber said that despite the decline in the total export
value, Ekonid predicted a 5 percent increase in exports of
machinery and industrial equipment in the first six months of
this year.

"The increase is partly due to an increase in German
investment here."

Kleinsteuber said Ekonid recorded an increase of 4.8 percent
in total investment of German companies -- to DM131 million
(US$209.6 million) -- in the first six months of this year,
compared to DM125 million in the same period of 1997.

"It proves that Indonesia is still attractive to German
companies. According to our data, at least eight German companies
will start to operate here this year."

Kleinsteuber said trade between the two countries so far
favored Germany. Indonesia's exports to Germany topped DM4
billion ($6.4 billion) and imports from Germany totaled DM5.2
billion ($8.3 billion) last year.

German exports to Indonesia comprise metalworking, machinery,
chemical supplies and heavy equipment. Indonesia's exports to
Germany range from furniture, wood products, coconut and palm
oil, to bicycles, television sets and other products.

"Indonesia's exports to Germany are expected to record a
slight increase this year despite the currency crisis which
caused the country's goods to become much cheaper because most of
Indonesia exports are processed goods, not primary goods,"
Kleinsteuber said.

German exports to Indonesia in reality are actually higher
than the official value because of indirect exports from
Singapore.

"We suspect many of the German goods exported to Singapore are
reexported to Indonesia, and the amount is estimated at between
DM1.5 billion and DM2.5 billion per year," he said.

Expo

The Ministry of Economics of the Federal Republic of Germany,
in cooperation with the Confederation of German International
Fair Organizers (AUMA) and Ekonid, will organize the major
technology exhibition, TECHNOGERMA, in Jakarta in March next year
despite the crisis.

Kleinsteuber said at least 180 German firms would join the
expo, which will be held from March 1 to March 7 at the Jakarta
Convention Center.

Participating companies represent machine tools, electronics,
chemical, optical, automotive construction and environmental
technology.

"The event is already fully booked and it is expected to
attract over 100,000 visitors," he said.

The quadrennial TECHNOGERMA is the biggest presentation of
German industry abroad. It was held in Seoul in 1991 and Mexico
in 1994.

Kleinsteuber said that unlike other trade fairs which project
a business transactional prospect, TECHNOGERMA, which will cost
DM80 million, would focus more on the strategic and political
objectives.

"It is aimed at strengthening the economic relations between
the two countries. At least 50 companies which will join the fair
are middle-scale companies which have not entered Indonesia. They
are looking for partners here," he said.

German economics ministry official Wolfgang Lffler said the
German government believed that Indonesia should start its
economic recovery process next year, especially after the planned
general election in May.

"Indonesia has been a long-term partner of Germany and should
not be deserted in difficult times such as now. German business
considerations also requires firm decision to maintain the
ongoing presence even in unfavorable times, to keep their leading
competitive position." (gis)