Maxime Verhagen, Deputy Prime Minister and Minister of Economic Affairs of the Netherlands, on shared development projects

Maxime Verhagen, Deputy Prime Minister and Minister of Economic Affairs of the Netherlands, on shared development projects

The Netherlands and Indonesia enjoy strong ties that span the realms of culture, politics and the economy. Numerous Dutch companies, ranging from small and medium-sized enterprises to global players, are active in Indonesia. Indeed, many Indonesians have grown up with Dutch brands in industries ranging from consumer goods and manufacturing to financial services and trade. In fact, the Netherlands is among the five largest investors in the country, creating value for consumers and jobs for families. Moreover, bilateral trade and investments grew strongly in 2011 and we see ample opportunities for the years ahead. Our optimism is bolstered by Indonesia’s impressive economic performance and apparently solid macroeconomic fundamentals.

We believe that Indonesia will weather the current global economic storm. Emerging economies, particularly those in Asia, are becoming significant engines of global growth. It would, however, be wrong for Indonesian businesses to neglect Europe in general and the Netherlands in particular. Europe continues to be a key export market for Asian products and an important investor in Indonesia. A comprehensive economic partnership agreement (CEPA) between Indonesia and the EU would significantly boost our trade and investment.

Experts predict that a CEPA would increase Indonesia’s trade surplus and raise European investments in Indonesia. The Netherlands is willing and able to help Indonesia boost its trade and investments.

The Dutch government is encouraging the private sector to innovate and develop new knowledge and products that will bring solutions to today’s challenges. Additional measures aimed at improving our investment climate include reducing red tape and creating an attractive tax regime. Together, these measures allow the Netherlands to excel in areas like chemicals, logistics, automotives, energy, life sciences and the creative industries. One area of particular relevance to Indonesia is the reduction of flood risks and land subsidence through integrated water management, an area in which the Netherlands is a recognised global leader.

As major cities and economic centres in both countries are situated in low-lying areas that are threatened by rising seas, our countries share similar challenges.

Dutch history shows that we can turn risks into opportunities for growth. We want to do the same for Indonesia through innovation and cooperation. One example is the Jakarta Coastal Defence Strategy. Over the next three years, this will result in a master plan for North Jakarta that will increase security against floods and tackle aspects of coastal development, such as transport and logistics. Transport and logistics are key to Indonesia’s future, as rapid economic growth necessitates significant investments in infrastructure. The Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development (MP3EI) identifies substantial opportunities, particularly in the area of ports.

This makes us natural partners: both our countries are gateways to our respective regions and our ports are located in congested urban areas. I believe there are many opportunities for the Dutch to share their expertise in ports and logistics with Indonesia. In fact, cooperation is already ongoing between training institutions in the maritime and road transport sectors. By involving the private sector and aligning the expertise of all involved, we can tackle complex issues and achieve lasting results. In the Netherlands, this “golden triangle” between government, the private sector and academia has been the cornerstone of our prosperity.

The Netherlands is currently providing value in other areas as well: for example, as the world’s leading exporter of fruit, vegetables and seeds, we are able to help Indonesia improve food security for its growing population. Our companies are also well positioned to deal with complex environmental issues that challenge our wealth and well-being. These range from shortages of food, water, energy and raw materials to climate change, rising CO emissions and loss of biodiversity.

I am convinced that by working together in stimulating sustainability, entrepreneurship and innovation, our two countries can lead the way to continued growth.

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Maxime Verhagen

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The Report: Indonesia 2012

Economy chapter from The Report: Indonesia 2012

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