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.