RI's bad image affects German investment

RI's bad image affects German investment

JAKARTA (JP): The German-Indonesian Chamber of Commerce and
Industry (EKONID) said on Tuesday that German investors were
reluctant to enter Indonesia because of the country's bad image.

EKONID president Fritz Kleinsteuber said that Indonesia was
suffering from a negative image stemming from constant reports of
social unrest in various regions of the country.

"We have to work to improve Indonesia's image first," he told
reporters following an EKONID business lunch that introduced
German's new ambassador, Gerhard Fulda.

Kleinsteuber blamed negative news reports on Indonesia for
having distorted Indonesia's image in the international
community.

According to him, good news about Indonesia was never really
exposed abroad. "Business here is doing well, but nobody talks
about it.

"Bring some good news and investors will come, but as long as
we have so much bad news, there will be no investment," he said.

He said that at present, no German investor was ready to
invest in large projects in Indonesia, but added that there would
always be small and midsize export-oriented projects.

"Ten small projects are much better than one big project
because they create more jobs," he said.

The German business community, he said, was also awaiting the
formation of the new Cabinet before committing to any new
investments.

He said that over 60 percent of Indonesian exports to Germany
were manufactured products, while the remaining were natural
commodities.

Manufactured products exported to Germany range from
electronic products to bicycles parts.

"It's a very broad base, about 100 different products," he
said.

Kleinsteuber said that small and midsize companies that had
survived the crisis were able to benefit from their business with
their German partners.

He expressed optimism that Indonesian exports to Germany would
grow.

"Indonesian exports to Germany are going up -- constantly," he
said.

But data from EKONID show that Indonesian exports shrank from
US$1.5 billion in 1997 to $1.4 billion in 1998 and down to an
estimated $1.3 billion in 1999.

Nevertheless, Indonesia enjoys a trade surplus with Germany
since 1998 when it booked DM 618 million (about US$294 million)
in surplus that grew to DM 1.8 billion in 1999.

The 1997 economic crisis lowered Indonesia's purchasing power,
which was reflected in a sharp decline in German exports from DM
5.2 billion in 1997 down to DM 3.3 billion in 1998 and DM 2
billion in 1999.

Ambassador Gerhard Fulda said that the German government had
shifted its priority from fostering economic relations with
Indonesia to improving the country's human rights.

"There is no contradiction in fostering economic relations and
fostering human rights," Fulda told in a speech before members of
EKONID.

He said that human rights would help prevent conflicts and
optimize human resources, which were of benefit to the business
community.

According to the ambassador, helping Indonesia develop its
human rights was in line with helping the country adopt
democracy.

"The German government is supporting the transition period,"
he said.

Fulda, however, later refused to comment on how the policy
change would affect economic relations between both countries.

Kleinsteuber said that the change in policy would have only a
small impact on EKONID members, as they were largely independent
of economic aid from the German government. (bkm)