Category Archives: Economy

The Dutch Return, This Time as Friends

Cornelis de Houtman, the first Dutch traveler to arrive in Indonesia and generations of other Dutch officials, traders and investors that came later, knew well how Indonesia could provide a lifeline for the Netherlands for hundreds of years, while making themselves very rich in the process.

And now, with Europe still struggling to cope with an economic downturn, Indonesia’s significance is back on the table, offering massive opportunities for the Dutch economy.

The Netherlands is sending its largest delegation since the independence of its former colony in 1945, a visit that has been dubbed by Dutch Prime Minister Mark Rutte as “the most serious effort to synergize the two countries that have deep historical ties for the sake of present and future mutual benefits.”

Dutch PM Mark RutteRutte, who leads 200 businesspeople representing more than 100 companies and research institutes on a three-day visit, will meet today with President Susilo Bambang Yudhoyono as the Netherlands aims to build a new chapter of deeper cooperations with Indonesia, while trying to offset incidents that have damaged relations with its former colony in recent years.

“We have a long and difficult history together. But we must focus on the future, not only on the past, for the mutual benefits of the two countries,” Rutte told the Jakarta Globe in an interview in his office last week.

New era of relations

To show that the visit is historic and crucial, Rutte and Yudhoyono will sign an unprecedented joint declaration on comprehensive partnership between the two countries to take the relations to a new high.

The declaration will become an umbrella agreement for both countries to boost their cooperation further.

“The declaration marks the new era of our relations and cooperation. The partnership will focus on water management, logistics, infrastructure, food security and agriculture and education,” said Rutte, who will be accompanied by several key ministers and officials, including Minister for Foreign Trade and Development Cooperation Lilianne Ploumen and Minister for Agriculture Sharon Dijksma.

Rutte stressed that what is important for both the Netherlands and Indonesia is how the countries can benefit each other in the future.

Bernard Bot, an influential Dutch senior diplomat and former foreign minister, who declared in 2005 that the Netherlands acknowledged Indonesia’s independence in 1945, agreed that it’s time for both countries to come to terms with past and move ahead. “There’s so much we can do together for the sake of our future,” he said.

“It’s for real now,” Retno LP Marsudi, the Indonesian ambassador to the Netherlands, said in a separate interview.

Concrete offers

On water management, the Netherlands has funded a master plan for a massive sea wall in Jakarta Bay to prevent tidal flooding and to manage the flow of water within the capital.

The area behind the 35-kilometer long, 15-kilometer wide wall will be turned into office complexes, malls and other commercial buildings. There is even a plan to relocate all government offices to the area once it is completed by 2025.

“The master plan will be finished by early next year and groundbreaking will begin later in the year,” Retno said.

The Netherlands, Rutte said, has always had to deal with high water and sea waves in order to survive, considering that the country is partly below sea level. He added that his country would bring state-of-the-art technology for Indonesia to use.

“It’s time for the Netherlands to empower Indonesians by equipping them to fish, not by merely providing the fish,” said Jesse Kuijper, a businessman who will join Rutte to Jakarta and who heads the Netherlands-based Indonesia-Nederland Society.

On logistics, Dutch companies could help Indonesia build world-class seaports across the country while in agriculture several Dutch firms have offered their Indonesian counterparts investment and technology to enable the country’s farmers to produce food with the latest technology at a time when prices are rising and the nation is struggling to feed its people.

“The Netherlands is the world’s second-largest exporter of agricultural products, and we have many areas we can work together,” said Rutte.

In education, Indonesia has asked the Netherlands to treat Indonesian students as local students, so that they pay lower tuition fees. “It would be an excellent gesture from the Dutch government if the Indonesian students are treated as locals,” said Kuijper.

Difficult time in Europe

Rutte acknowledged that Europe and the Netherlands are facing tough times. “We have a difficult period at the moment. I do believe that we have made good strides but there is still a long way to go,” he said.

He said he admired Indonesia’s high economic growth of 6 percent annually. “We are jealous,” he said, smiling.

The latest figures from the Dutch Central Bureau of Statistics (CBS) show the Netherlands economy grew by just0,1 percent in the last quarter compared to the previous.

The CBS also reported that there were 46,000 fewer jobs in the third quarter.

“Indonesia can offer Dutch businesspeople a place for investment with a huge market of 240 million people and a growing middle class of over 100 million, as well as entry gate to the bigger market of Asean,” said Aleksius Jemadu, dean of Pelita Harapan University’s School of Social and Political Sciences.

He said the Netherlands now sees Indonesia as a successful democracy with long-term stability. “Relations between Indonesia and the Dutch should be more special — more than other ties — because we have a long history together. We can synergize, with Indonesia providing natural resources and markets and the Dutch providing capital, knowledge and technology,” Aleksius said.

He added that the Netherlands can offer Indonesia the opportunity to become a producer and not just a consumer. “It is now depending on Indonesia to realize the goals,” Aleksius said.

The Netherlands already is Indonesia’s second-biggest trading partner in Europe. In 2012, trade between the two countries was worth $4.7 billion.

Blast form the past

Relations between Indonesia and the Netherlands have experienced ups and downs, with two incidents proving particularly embarrassing for leaders of both countries in the last few years.

President Yudhoyono was forced to cancel his trip to the Netherlands in 2010 after a group of Moluccan independence activists filed a motion in the Dutch courts to arrest the president for gross human rights violations in Maluku and Papua.

Relations became tense after the trip was canceled, with many in Indonesia blaming the Dutch for insulting Yudhoyono.

The relations plunged into a new low when the Dutch government had to cancel the sale of Leopard tanks to Indonesia last year after the parliament voted to reject the deal. Indonesia then angrily turned to Germany to buy the same tanks.

Rutte, who loves Indonesian food like nasi goreng and sate and whose parents lived for some time in Indonesia, gave assurances such incidents would not happen again under his administration. “In fact, we are expecting President Yudhoyono to visit us next year,” he said.

About the Moluccan activists, Retno said everybody has the right to keep on dreaming. “But the question is whether or not it is realistic.”

She said relations between the two countries are getting better, with both sides understanding and trusting each other.

Retno also said the close connections between the people of the two countries meant Indonesia and the Netherlands could not afford to let relations cool.

Currently, 10 percent of the Netherlands’ 17 million population has direct or indirect links to Indonesia. And every year, Retno said, thousands of Indonesians travel to the Netherlands as tourists or for business, with the Dutch doing likewise.

Aleksius said fewer and fewer people in Indonesia see the Netherlands as a former colonial power.

“I don’t think it matters much now. People are becoming pragmatic, seeking concrete benefits and looking forward instead of being bothered by the past,” he said.

Source: The Jakarta Globe

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The Netherlands Sends Largest Ever Trade Mission to Indonesia

This week, a group of Dutch politicians and businessmen, led by prime minister Mark Rutte, will pay a four day visit to Indonesia.

The aim of the visit is to smoothen bilateral relations and search for business opportunities between both countries.

This Dutch group, which includes more than one hundred Dutch company delegates, forms the largest Dutch trade delegation that has visited Southeast Asia’s biggest economy in the modern history.

However, relations between the Netherlands and Indonesia are still complex today.

Obviously, the complexity of relations between both countries traces back to the colonial period, which brings along more emotions, in particular on the part of Indonesia.

Last year, commotion emerged after the Dutch parliament refused to sell army tanks to Indonesia because the Indonesian government might use these against its own people. This then became a laughing stock for Indonesians who pointed to the colonial past.

Moreover, in 2010, Indonesian President Susilo Bambang Yudhoyono cancelled a trip to the Netherlands at the last minute because the Dutch government could not guarantee Yudhoyono’s inviolability regarding a lawsuit filed by the government-in-exile of the Republic of South Maluku (RMS). The RMS issued legal proceedings to have Yudhoyono arrested upon entering the Netherlands.

Indonesia is a highly promising market. The country contains a large population (over 240 million people) with a rapidly expanding middle class.

Per capita GDP has been increasing strongly in recent years, implying that the expanding middle class segment has more and more money to spend.

Regarding commodities, Southeast Asia’s largest economy contains an abundance and variety, including palm oil, coal, nickel, rubber, and cocoa.

Despite the political sensitivities, trade relations between both countries have been growing robustly.

In the last three years, bilateral trade rose 25 percent to approximately €3.5 billion in 2012. As such, Indonesia is the fastest growing export market for the Netherlands in Asia.

However, there is still ample room for further growth and that is why the Dutch trade delegation, which includes Shell, Unilever, Philips and ING, is heading for Indonesia this week.

Source: indonesia-investments

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Abbott stresses ‘respect for Indonesian sovereignty’

Australian PM says two countries ‘are determined to end scourge’ of people-smuggling after Jakarta talks

Australia's PM Tony Abbot and Indonesia's President Susilo Bambang YudhoyonoAfter weeks of escalating tensions over his hardline “stop the boats” policies, Tony Abbott’s first official visit as prime minister to Jakarta on Monday was marked by a “collegial” tone.

Speaking with Indonesia’s president, Susilo Bambang Yudhoyono, at the state palace, Abbott dropped talk of turning the boats around, instead emphasising his commitment to respecting the sovereignty of Australia’s northern neighbour.

Abbott said he had a frank conversation about issues of sovereignty – including the restive province of West Papua – and the talks were “candid, constructive, and collegial”.

“Australia has total respect for Indonesia’s sovereignty and territorial integrity,” said Abbott, stressing a collaborative, approach to addressing the asylum seeker problem.

“We are resolved together united to tackle this problem and to beat it, on land and at sea, and at the borders of our countries.”

Abbott campaigned hard prior to his election on the promise that he could stop the flow of asylum seeker boats, but his policies to meet this pledge have been the subject of criticism and derision by Indonesian politicians.

Under the so-called Operation Sovereign Borders, Abbott has proposed turning asylum seeker boats around “when safe to do so”, as well as buying boats from Indonesian fishermen and offering them financial incentives for key information about people-smuggling operations.

The Indonesian foreign minister, Marty Natalegawa, had been reported as saying he rejected Abbott’s plans. However, after Monday’s meeting, Natalegawa was diplomatic about future co-operation.

Saying the leaked transcript of his conversation with the Australian foreign minister, Julie Bishop, last week was “behind us”, Natalegawa said that mutual respect for sovereignty would underscore any future agreements on asylum seekers.

Greeted by an Indonesian marching band performing a brassy rendition of the Australian anthem on the palace lawn, Abbott emerged from his meeting with Yudhoyono championing a unified front to combat people smuggling.

“We are determined to end this scourge, which is not just an affront to our two countries but which has so often become a humanitarian disaster in our seas between our two countries,” he said.

Touching on the issue of asylum seekers, President Yudhoyono said that Australia and Indonesia were both “victims” of people smugglers, and that asylum seekers were both an economic and social burden.

Each year thousands of asylum seekers fleeing from countries such as Pakistan, Afghanistan and Myanmar transit through Indonesia, where they pay people smugglers to ferry them to Australian territory.

Discussing other aspects of the bilateral relationship, Yudhoyono noted that trade between the two countries increased 700% from 2011-2012, and the countries have targeted bilateral trade to hit $15bn in the near future.

Abbott who is accompanied by Bishop, his trade and investment minister, Andrew Robb, and a delegation of Australian businessmen, also stressed the need for greater trade and investment ties.

Abbott praised Indonesia’s democratic transition and thriving economy, noting that in the past Australia had made economic policy mistakes. In an apparent reference to a Labor decision to end live cattle exports he said Australia should “never again take actions that would jeopardise the food supply”.

He continued to apologise for Labor policies at an official dinner in Jakarta later on. He said: “There have been times, I’m sorry to say, when Australia must have tried your patience, when we ‘put the sugar on the table’ for people smugglers, or cancelled the live cattle trade in panic at a TV programme.

“There have been times when all sides of Australian politics should have said less and done more.

“I am confident that these will soon seem like out-of-character aberrations and that the relationship will once more be one of no surprises, based on mutual trust, dependability and absolute respect for each other’s sovereignty under the Lombok treaty.”

As part of his Colombo plan – an initiative to encourage more Australians to study in Asia – Abbott also highlighted the need to strengthen people to people links, and encourage Australia’s best and brightest to fully participate in the Asian Century.

Envisaging continued strong ties between Indonesia and Australia, Abbott said the “best days” of their relationship lay ahead.

Source: The Guardian

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Timor Leste Establishes Relations with NTT

Deputy Foreign Minister of Timor Leste, Coustancis Pinto visited East Nusa Tenggara (NTT) to establish trade cooperation between the two regions.

“We want to establish cooperation with NTT government,” Coustancis Pinto said yesterday. Most of the goods in Timor Leste come from Indonesia through Motaain border at Atambua, Belu Regency, NTT.

Timor Leste government has met with NTT Governor Frans Lebu Raya. The meeting was attended by Timor Leste officials, among them are Consulado RDTL for NTT Feliciano da Costa and National Director for Bilateral Relations, Markus da Costa.

Governor Frans Lebu Raya said NTT government welcomes the cooperation. Frans said Timor Leste citizens prefer to buy cement from Kupang since it is transported through land which makes the price cheaper. The needs for chickens can also be sent from NTT.

Source: Tempo.co

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Papua: Working Together for Prosperity

By Hyginus Hardoyo === In Ogenetan, a tiny village located in Iniyandit, one of the more remote districts of Boven Digoel regency in Papua, residents recently donned their best traditional attire to welcome several guests from Jakarta.

Some, including several children, had painted their bodies black and white with makeup and danced to songs and chants as soon as the guests exited their cars. A group of women also started to dance at the other end, in front of the main building of the kampung, which is located deep in the rainforest near Indonesia’s border with Papua New Guinea.

As a group of young men started to play music using guitars and a plastic water drums, girls sashaying in grass skirts invited the guests to pass through.

“This is our way to give guests a warm welcome,” Yan Karowa, the local district head, said. “The dances and songs show our hospitality to anybody who is willing to come here.” Everybody was happy whenever guests visited the kampung, he said.

Processing: The cooperative sold about 1.5 tons of good-quality rubber sheets for about Rp 15,000 (US$1.33) a kilogram, described as a fair price given current conditions.

Processing: The cooperative sold about 1.5 tons of good-quality rubber sheets for about Rp 15,000 (US$1.33) a kilogram, described as a fair price given current conditions.

Ogenetan is inhabited by 57 families comprising 306 people, who rely principally on rubber farming, introduced to Papua in the early 1970s by Christian missionaries, as their main source of income.

Nearly every resident of the kampong was on hand at the hall, which houses the Nonggup Cooperative that they established.

People wanted to watch as the cooperative’s representatives stake a deal with PT Montelo, a private company. About one-and-a-half tons of good-quality rubber sheets were bought by the company for about
Rp 15,000 (US$1.33) a kilogram, described as a fair price given current conditions.

Living in isolation about 350 kilometers south of Jayapura, those who live in Ogenetan find that economic development comes very slowly.

Basic foodstuffs were previously exorbitantly expensive. Residents had to venture to places such as Tanah Merah, the capital of Boven Digoel, about five hours away. The journey had to be made by foot; the roads were almost impassable.

The hardships drove Yan Karowa and Riswanto from the NGO Wahana Visi Indonesia to establish the Nonggup Cooperative. “How can local people enjoy the fruits of their labor if they are burdened with huge debts and are unfavorably dependent on middlemen?” Riswanto said.

The local residents were at first reluctant to found a cooperative, due to previous failures, when money collected from the members was misused or taken away. However, through the work of the NGO, local residents became aware of how a well-organized and transparent cooperative could help the community.

The cooperative was established in 2009 with just 29 people who pitched in Rp 8 million for its operating capital. Through the cooperative, the local residents reached an agreement with PT Montelo to sell the rubber sheets.

Realizing that a cooperative could work and generate profits, members of the kampung joined the cooperative in increasing numbers. Currently, more than 130 people from Ogenetan have signed up and representative offices have been opened in the neighboring districts of Mindiptana and Arimop.

“The establishment of the cooperative enables us to easily communicate on the need to improve quality of rubber production from here,” Widia from PT Montelo said.

With total annual turnover of over Rp 300 million, a shop was opened under the supervision of the cooperative, providing affordable basic necessities and other agricultural produce to members. The shop is managed by Maria Wometa.

The mother of six says that business has been so good that she has been able to send one of her kids to study at a university in Merauke.

Bruno Etmop, the head of the cooperative, said that the cooperative booked a net profit of about Rp 23 million in its first year. By the third year, members were able to share a annual dividend of Rp 7 million.

Aloysius Bayub, a cooperative member, said he earned an average of Rp 1.5 million a month from the sheets made from sap from his 1.5-hectare rubber plantation. “It is enough to support my daily expenses, including paying the tuition fees for my youngest child at elementary school,” said Bayub, the father of three, whose wife has just died due to illnesses.

Bruno said that the cooperative’s rapid growth could not be separated from the discipline of its members in playing by the established rules. ”Each member of the cooperative who has debts has understood that the debt must be repaid in installments, together with interest.”

The money collected from the members was deposited in a BPR rural bank, whose officers came to Ogenetan once a month.

Backed by skilled assistants with a basic knowledge of management, Bruno said that he was confident that the cooperative could expand even further.

However small, this joint effort has contributed greatly to the local residents. A spirit for advancement has arisen from province of Papua in Indonesia.

Source: The Jakarta Post

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Indonesia, PNG agree to increase cooperation

PNG's PM Peter O'Neill and Indonesia's President Susilo Bambang Yudhoyono

PNG’s PM Peter O’Neill and Indonesia’s President Susilo Bambang Yudhoyono

Indonesia and Papua New Guinea have agreed to increase bilateral cooperation, the two countries` heads of state said ahead of their meeting here on Monday (17/06).

The bilateral meeting was part of the agenda of the current visit of Papua New Guinea`s Prime Minister Peter O`Neill to Indonesia.

President Susilo Bambang Yudhoyono considered the state visit of the PNG prime minister this time very significant for developing and increasing the cooperation between the two countries following the meetings before in Honolulu and in the Bali Democracy Forum last year.

“This visit is very important not only for the two countries` bilateral relations but also for increasing and strengthening our relations and partnership. We have agreed to work more and seek more opportunities and comprehensive partnership,” he said.

Prime Minister O`Neill meanwhile said he was glad over the warn welcome that had been given to him and his delegation.

He said as close neighbors PNG and Indonesia could continue to develop their cooperation wider.

PM O`Neill flanked by his wife made a state visit to Indonesia after a meeting with President Yudhoyono in Bali in 2012.

The two countries` delegations are also scheduled to conduct bilateral talks and cooperation agreements would also be signed during the PNG prime minister`s visit.

Source: ANTARA News

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Trade, extradition and West Papua on agenda for PNG-Indonesia talks

PNG's PM Peter O'Neill

Papua New Guinea’s Prime Minister Peter O’Neill

Papua New Guinea’s Prime Minister Peter O’Neill says trade, border issues and an extradition treaty will be on the agenda for this weekend’s trip to Indonesia.

O’Neill says the trip will mark a historic deepening of bilateral relations between the neighboring countries.

He says trade will be a key focus, with a comprehensive partnership agreement covering economic links.

“We want to encourage further strengthening of the trade and investment opportunities between the two countries,” he said.

“[We want] to further develop the economic opportunities along the border area, and further strengthen the management of the border issues between the two countries.”

Border issues include people from Indonesia’s West Papua province seeking shelter in PNG, and ongoing reports of human rights abuses against pro-independence activists in West Papua.

O’Neill says PNG’s policy is that West Papua is an integral part of Indonesia, but he looks forward to discussing the border issues.

“We are encouraged by the invitation by the Indonesian Government, through the president, for the first time in its history asking Papua New Guinea to help in some of those issues in West Papua,” he said.

“We have taken up that invitation and we are going to positively discuss many of those issues…with the president and the Indonesian Government officials.”

O’Neill says PNG’s cabinet has agreed on an extradition treaty with Indonesia that will be discussed during the trip.

The discussion comes in the wake of the case Indonesian citizen, Joko Chandra, who fled to PNG and was made a citizen, despite it being illegal to hold dual citizenship.

O’Neill says he and Indonesia’s president have not discussed that specific case, which will be up to the courts to rule on.

“The ministerial committee’s decision is final – Joko remains a citizen of Papua New Guinea until the courts decide whether that citizenship is valid or not,” he said

“But of course if the president and the Indonesian officials bring up the issues, now the extradition issues are now going to be assigned between the two countries, we will process any of those issues, including this particular case in accordance with that treaty.”

Peter O’Neill said many ministers will be on hand to sign agreements and more than 100 business people will also join the delegation.

Source: Islands Business

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