Habibie appeals for help from Germany

Habibie appeals for help from Germany

JAKARTA (JP): President B.J. Habibie called on Germany, a
country he has had a 19-year affiliation with, to help Indonesia
weather the 18-month economic crisis through intensified
investment and trade.

Speaking on Monday at the opening of the week-long technology
exhibition Technogerma, Habibie assured 300 German business
figures that Indonesia's market would continue to be receptive to
German products.

"We expect, especially in our current condition, that Germany
will help Indonesia, by absorbing more of our products and by
intensifying investment here," he told participants.

Up to 1997, Indonesia experienced about US$1 billion in trade
deficits with Germany yearly, he said.

Last year the trade deficit was slightly lower, because the
rupiah's collapse against the U.S. dollar weakened Indonesia's
import capacity, he said.

Separately, German Economy and Technology Minister Werner
Muller said on Monday that Indonesia suffered 600 million
Deutschemark (US$352.94 million) in trade deficits in 1998, after
exports rose 3 percent to DM3.6 billion and imports from Germany
dropped 33 percent to DM3 billion.

Habibie said Germany provided a crucial role as a "bridge" for
Indonesian exports entering European Union markets.

German investment in Indonesia is currently 3.7 percent of
total foreign investment. Out of 59 countries, Germany is
Indonesia's 10th largest investor.

Most German companies here invested in electronic,
manufacturing, machinery and components, container, food
processing, plastic, pharmaceutical, glass, and aluminum
industries, Habibie said.

In 1998, German-approved investment in Indonesia dropped to
$71 million on 28 projects from $4.47 billion on 15 projects in
the previous year, he said.

Habibie also said the International Monetary Fund expected
Indonesia's economy to grow by 3.4 percent this year, compared to
a Fund estimate of a 15.3 percent contraction last year.

The economy had made progress on several fronts, including a
stable rupiah, which currently hovers around Rp 8,700 to the U.S.
dollar, after sinking as low as Rp 17,000 to the dollar last
year, he said.

Earlier, official estimated gross domestic products this year
would grow by 1.5 to 2 percent, compared to a 13.68 percent
contraction in 1998.

Habibie said the crisis had dragged down the per-capita income
of Indonesia to $400 last year from $1,055 in 1997.

The inflation rate in 1998 reached 77.63 percent, while the
poverty level climbed to 40 percent, he said.

With the industrial productivity level reaching only 62.4
percent of total capacity, the number of unemployed totaled 15.4
million last year, he added.

Meanwhile, Muller emphasized Germany's confidence in Indonesia
because of the latter's economic potential.

He said Germany would help Indonesia restore its damaged image
in the global business community.

"In an economic crisis there is always a psychological factor;
we'd like to show people that something positive is going on here
to restore the damage caused by psychological effects," he said.

"Indonesia is going through a positive process of reform and
democratization," he added.

Technogerma, which ends on Sunday, is the second German
technology fair held in Indonesia since 1979.

Participating in the event are 194 large and medium German
companies, which work in the mechanical and electrical
engineering, chemicals, transportation, environmental technology,
medical technology and service industries.

Major participants include auto giant DaimlerChrysler, air
carrier Lufthansa, widely-diversified Siemens and power company
Asea Brown Boveri Aktiengesellschaft.

Muller said that the exhibition could be a stepping stone for
cooperation between German and Indonesian medium-sized
businesses, because they constituted 70 percent of the fair's
participants.

"In Germany, medium-sized means competition, innovation and
flexibility. These three factors are crucial for Indonesia's
recovery," he said. (das)