The Nation

aec

Smaller
Larger
bilateral ties

Indonesia an example of how to cut debt: Merkel

Jakarta aims to double trade with Germany by 2015



Visiting German Chancellor Angela Merkel held up Indonesia as a model of how countries could cut their debt in a few years, noting that European countries reeling from the financial crisis might draw inspiration from it.

She added that she remains optimistic that Europe will claw its way out of its current difficulties.

Indonesia is the German leader's only Asian stop. She is in Jakarta at the same time as International Monetary Fund chief Christine Lagarde, who yesterday secured a US$1 billion loan (Bt31 billion) from Indonesia to the IMF.

The presence of the two women, who are crucial to shaping the world economy, signifies growing global interest in Indonesia's economic heft.

"Like our relationship with China, we want to expand our cooperation with Indonesia," she told reporters.

"We offer our experience in infrastructure and in other sectors, and hope this continues."

The German Chancellor noted that Indonesia, too, had sought the IMF's help when its currency plunged during the 1997 Asian financial crisis.

Indonesia's ability to recover, and slash its sovereign debt from 80 per cent of gross domestic product to 24 per cent in a matter of years, she said, could provide a model for Europe.

She was speaking after she and Yudhoyono signed a wide-ranging agreement to strengthen cooperation in security, economy, development, health, education, science and the environment.

During her two-day trip, she visited a mosque and a church before calling on Yudhoyono at the palace.

Today, Merkel is due to visit the site of the country’s tsunami early-warning system, which was built with German assistance.

Trade between Indonesia and Germany now totals US$6.69 billion, said Coordinating Minister for Economic Affairs Hatta Rajasa. He said his target is to double the figure in three years.

Germany imports food, footwear, agricultural produce, textiles and ores from Indonesia.

Indonesia buys machinery, communications equipment, electronic components, motor vehicles and pharmaceuticals from Germany.

Merkel is the fourth European state leader to visit Indonesia this year. Earlier President Susilo Bambang Yudhoyono met Portuguese President Anibal Antonio Cavaco Silva in May and with British Prime Minister David Cameron about a month earlier. On Monday, Yudhoyono met Czech President Vaclav Klaus.

Merkel's three-day visit is a part of the 60th commemoration of bilateral ties between the two countries.

The revelation of her visit came on the heels of the government's announcement that it would procure up to 100 refurbished Leopard 2A6 main battle tanks (MBT) worth $280 million from Germany, ruling out a previous plan to buy similar tanks from the Netherlands.

Meanwhile, the Czech president said that his visit to Indonesia was part of the efforts to help the country survive the impact of the euro-zone crisis given Indonesia's robust and impressive economic growth.

Klaus indicated that the current economic crisis in the continent has discouraged his country from entering the single currency zone.

"We have no motivation to jump into the euro zone, which is a problematic structure. Nevertheless, the impact of the euro-zone crisis to the Czech economy is quite visible," Klaus told a joint press conference with Yudhoyono at the Merdeka Palace.

The Czech politician said he had seen Indonesia as a potential

market for Czech exporters who had suffered from a significant plunge in the number of European buyers.

"Our exports go to Western Europe, which means if there is trouble there, it influences our economy very much. Hence, to avoid the negative impact of the euro-zone crisis, I say, 'Go to Indonesia and do business here!'" Klaus said.

Total Indonesia-Czech trade volume in 2011 reached $163.72 million, with a deficit of $24.88 million on the Indonesian side.


Comments conditions

Users are solely responsible for their comments.We reserve the right to remove any comment and revoke posting rights for any reason withou prior notice.