According to The Jakarta Post, President Joko “Jokowi” Widodo has offered to open an area in the integrated Batang industrial park in Central Java, which is intended for German companies, as Indonesia wants to attract new foreign investors.
Jokowi expanded the offer to German Chancellor Angela Merkel during a virtual meeting in camera on April 13, one day after the two heads of state and government opened the Hanover-based Hannover Messe 2021, in which Indonesia is a partner country.
He called on Germany, a European industrial power plant, to increase industrial investment in Indonesia by building factories and integrating Indonesia into its global supply chain.
He also proposed a partnership to develop vocational schools to improve Indonesia’ s human resources.
The Jakarta Post mentions, the Jokowi government is on a campaign to encourage foreign companies to invest and relocate to Indonesia as the country’s FDI rose 2.4 percent year over year to Rs.412.8 trillion Billion US dollars) fell in 2020, according to the Investment Coordinating Board (BKPM).
The Batang Industrial Area is one of the government’s tools to attract such factories.
The zone will be located on 4,368 hectares of land owned by the state-owned plantation holding PT Perkebunan Nusantara (PTPN) IX in the Gringsing District of Batang.
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Indonesian officials have cited Batang’s relatively low minimum wages and the ease with which the government could provide land for factories as the main benefits of relocating to the industrial area.
However, a shortage of skilled labor in less developed regimes could discourage investment despite lower wages, economists say.
The Jakarta Post says, Germany invested $ 1.4 trillion in Indonesia in 2020, making it the fourth largest European investor after the Netherlands, Luxembourg and the United Kingdom, according to BKPM data.
The major German manufacturers with branches in Indonesia include the automotive supplier Bosch, the pharmaceutical manufacturer Bayer, the industrial manufacturer Siemens, the stationary manufacturer Staedtler and the car manufacturer BMW.
In the meantime, Germany was also Indonesia’s most important trading partner in Europe.
Last year, trade between two countries reached $ 5.48 billion, according to the Department of Commerce.
Indonesia and Germany have a comprehensive partnership agreement within the framework of the German-Indonesian Joint Declaration 2012 for a comprehensive partnership that includes cooperation in the fields of business, education, research and technology.
Jokowi and Merkel also discussed partnerships in the areas of climate change, economy and health and highlighted the current political situation in Myanmar.
More than 160 Indonesian companies from all business areas will take part in the Hannover Messe 2021 to look for business partners, export markets, new technologies and growth opportunities.
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