Keeping Dutch-Indonesia ties strong

Keeping Dutch-Indonesia ties strong

An economy with great potential growth, the largest country in
Southeast Asia and an important geopolitical player: This is how
the Netherlands continues to view Indonesia today despite a 10-
month monetary crisis that has crippled the country's economy.

"We still see a bright future for Indonesia in the long term,"
said Dutch Ambassador to Indonesia, P.R. Brouwer.

Brouwer pointed out that over 150 Dutch companies, either
wholly Dutch owned or joint ventures, currently operated in
Indonesia.

"These Dutch businesses have also felt the affects of the
economic crisis and have had to curtail their activities. But
none of them has run away."

In fact, Dutch businesses have poured almost US$12 billion
into Indonesia over the past 30 years, ranking the small country
of 15 million people seventh in the world for foreign investment
in Indonesia.

Brouwer said the relationship between Indonesia and the
Netherlands today was strong -- not only through current business
ties, but through the feeling of a shared common past that he
believed was very much alive today.

"The people-to-people aspect is a very important element of
the relationship as a whole. People in the Netherlands follow
Indonesia very much."

The Dutch government, he said, was following Indonesia's
economic situation closely and had a great willingness to show
its solidarity with the people here.

Help has come from the Netherlands through donations to
international relief efforts, including aid funneled to central
Irian Jaya by the International Committee of the Red Cross.

The Netherlands is also a significant contributor to the
International Monetary Fund's (IMF) bailout package to Indonesia.

"We are very much supporting the IMF as the best way to assist
the Indonesian government. For every dollar the IMF sends here,
one-third is from Europe, and 10 percent of that is from the
Netherlands."

On the diplomatic level, Brouwer said he brought the Dutch
minister of economic affairs to Jakarta in December and the
foreign minister in mid-February to discuss the crisis with the
Indonesian government.

Following a resumption of IMF payments to Indonesia, the
Netherlands also will provide $125 million in trade credit
guarantees per quarter for the resumption of imports into
Indonesia.

Indonesian companies have suffered greatly from an inability
to obtain letters of credit over the past several months to
import necessary raw materials for their products. On average, 50
percent of the components used to make Indonesian products are
imported.

Brouwer said the group of seven (G-7) most industrialized
nations was interested in reviving trade with Indonesia.

"We also want to serve as a gateway to Europe for Indonesian
trade."

The Netherlands has already seen significant amounts of
Indonesian goods shipped through its ports for destinations
outside its borders on the continent, shifting the bilateral
trade balance between the two countries in Indonesia's favor
since 1987.

Indonesia enjoyed a trade surplus of over $1.2 billion with
the Netherlands in 1997, a 10-year high.

Trade patterns in recent years have stabilized, said Brouwer.
"We would like to see it move forward, but Dutch businesses seem
to have a preference for investment. There has been a steep
increase in investment here since 1994."

As of January, the number of investment projects in Indonesia
originating in the Netherlands totaled 177, with a cumulative
investment valued at $5.2 billion. Of these, 163 projects valued
at $1.6 billion have been realized, employing over 25,000
Indonesian workers.

Brouwer emphasized, however, that the strength in the
relationship between Indonesia and the Netherlands lied in
cultural and individual exchanges through institutional and
personal contacts.

"There is a great feeling for Indonesian art in the
Netherlands, and the Dutch higher education system has become
more internationalized, allowing for more Indonesian students."

Fewer Indonesians have been able to travel and study in the
Netherlands since the economic crisis began but, he said his
government believed it was important to maintain such contacts.

Two weeks ago, over 700 Indonesians who have studied in the
Netherlands attended a reception at the Dutch Embassy. The
function was to help maintain a close relationship with the
former students and to celebrate the birthday of Queen Beatrix,
the current reigning monarch of the Netherlands.

Brouwer said Erasmus Huis, the 28-year-old Dutch cultural
center on Jl. Rasuna Said, was a place for Indonesians to
acquaint themselves with various aspects of Dutch culture here in
Jakarta.

Because Indonesian law is largely derived from the Dutch
colonial legal system, the center recently set up a library on
the modern Dutch legal system to help lawyers and students
understand how the Dutch system has developed since Indonesian
independence.

Since an August 1995 state visit by Queen Beatrix to
Indonesia, cooperation in many fields has expanded.

"Though, there is still room for improvement," Brouwer said,
pointing to possibilities for greater cooperation in Indonesia's
economic development.