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)