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Indonesia

Indonesia

Last updated in April 2017

Political Relations

President Joko Widodo’s meeting with Federal Chancellor Angela Merkel in Berlin on 18 April 2016 marked a new high point in German-Indonesian relations. Besides conducting political consultations, the two leaders discussed a range of issues including supporting Indonesia’s desire to quickly launch free trade negotiations with the European Union, promoting bilateral economic relations, German assistance in reforming Indonesia’s vocational training system, and deeper cooperation in the areas covered by the maritime agenda as well as cooperation in the health care sector. The discussion also touched on global issues such as global climate change, sustainable development strategies and cooperation within the G20 framework. As the largest members of the European Union and the Association of Southeast Asian Nations (ASEAN), respectively, Germany and Indonesia take similar positions on many issues relating to the development of the two regional organisations.

In recent years, high-level political contacts between Germany and Indonesia have markedly intensified. Then Federal President Christian Wulff paid a state visit to Indonesia from 30 November to 2 December 2011 while Federal Chancellor Merkel visited Jakarta in July 2012. During her visit, she concluded a wide-ranging basic agreement under the Jakarta Declaration with then Indonesian President Susilo Bambang Yudhoyono. This agreement called for Germany and Indonesia to continue and step up their close and multi-faceted cooperation in the coming years. Then President Yudhoyono paid a state visit to Berlin from 3 to 6 March 2013. Relations have been further cemented by several ministerial-level visits to Indonesia, including those by then Economic Cooperation and Development Minister Dirk Niebel in January 2013, then Foreign Minister Guido Westerwelle in February 2013, then Foreign Minister Frank-Walter Steinmeier in October 2014, and Food and Agriculture Minister Christian Schmidt in April 2016. Then Federal Government Commissioner for Human Rights Policy and Humanitarian Aid, Christoph Strässer, visited Jakarta and Papua Province in September 2015.

As the country with the world’s largest Muslim population, Indonesia is a major partner of Germany in dialogue on religious issues. The fourth German-Indonesian Interfaith and Intercultural Dialogue between representatives of the two countries’ governments and numerous civil society organisations and religious communities was held in September 2015 in Berlin. There is a commitment to continuing the dialogue with a view to expanding it if possible.

Economic Relations

According to Federal Statistical Office figures, bilateral trade between Germany and Indonesia was worth 6.2 billion euros in 2016, of which German exports accounted for 2.4 billion euros and German imports for 3.8 billion euros. Germany’s foreign trade with Indonesia declined between 2011 and 2015, but the slump bottomed out in 2016. Germany’s main exports to Indonesia are special machinery and motor vehicles (including components and parts).

German companies’ engagement in Indonesia

In 2015, German direct investment in Indonesia was worth 57 million US Dollars. With total foreign investment standing at 29.3 billion US Dollars, Germany’s share was a modest 0.2 percent.

German companies active in Indonesia include Siemens and ThyssenKrupp and, in the chemical sector, BASF, Bayer, Beiersdorf, Merck, Henkel and Evonik. Other major companies operating in the country are Allianz and Deutsche Bank in the finance and insurance sector; DHL, Schenker and Hapag-Lloyd in the logistics sector; and HeidelbergCement, Fuchs Oil and Schott. Daimler's Mercedes-Benz division and BMW carry out the final assembly of cars in Indonesia.The German-Indonesian Chamber of Industry and Commerce (EKONID, a member of the German Chamber Network) represents the interests of its more than 500 corporate members. EKONID offers consulting on market development to German and Indonesian companies, supports them in their efforts to establish business relations and works closely together with partner organisations from Indonesia and Europe (www.indonesien.ahk.de).As Germany’s official business promotion agency, Germany Trade and Invest (GTAI) advises Indonesian companies seeking to expand their business activities to the German market and assists German companies seeking to enter the Indonesian market by providing foreign trade information. The GTAI website offers free access to extensive information on various business sectors of particular interest to German companies (www.gtai.de).

The German Centre in Indonesia (www.germancentre.co.id) provides start-up assistance to small and medium-sized companies seeking to gain access to the Indonesian market. It offers production and office space complete with the necessary infrastructure and state-of-the-art communications.

The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), the Kreditanstalt für Wiederaufbau (KfW) and the Deutsche Investitions- und Entwicklungsgesellschaft (DEG), which is a KfW subsidiary, continue to maintain country offices in Indonesia.

Development cooperation

Indonesia is one of the global partners of German development cooperation. German-Indonesian cooperation began as early as the 1950s and Germany is Indonesia’s fourth largest bilateral development cooperation partner, after Japan, Australia and the United States. In addition, Germany provides substantial support for development programmes in Indonesia through multilateral institutions such as the United Nations, the Global Fund to Fight AIDS, Tuberculosis and Malaria, the World Bank, the Asian Development Bank and the European Union. Germany also funds the work of non-governmental organisations and regional programmes through its support to ASEAN.

The priority areas of bilateral development cooperation are energy, sustainable economic development (including vocational training) and environmental protection (including climate change). The next intergovernmental consultations are scheduled to take place in July 2017 in Jakarta.

Scientific and technological cooperation

The bilateral agreement on science and technological cooperation between Germany and Indonesia, signed in 1979, established the basis for cooperation in this area. In addition to the scholarship programme of the German Academic Exchange Service (DAAD) and cooperation between universities, joint research projects are conducted on an ad hoc or thematic basis. The biggest project in recent years was the construction of a tsunami early-warning system, on which an agreement was concluded in the wake of the 2004 tsunami. Construction of the system has been completed; it was handed over to the Indonesian authorities in March 2011. The follow-up project PROTECTS, which also included capacity-building measures and efforts to ensure the system’s sustainability, was concluded in late March 2014.Further areas of joint research include geothermal energy (construction of a binary cycle geothermal power plant in North Sulawesi), biotechnology (expansion of German and Indonesian research collections to include biodiversity documentation) and molecular medicine (investigation of antimicrobial resistances). The long-standing cooperation in marine research is continuing within the framework of the SPICE III project. Research here focuses on marine biodiversity, climate change and coral reef and mangrove ecology.

Development cooperation

Indonesia is a partner country of German development cooperation. For more information please visit the website of the Federal Ministry for Economic Cooperation and Development

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