EU Chief Van Rompuy Urges Transparency During Indonesian Visit

Jakarta Globe, Nov 21, 2014

This handout photo taken and released on Nov. 19, 2014 by the Presidential
Palace shows President Joko Widodo, right, walking with European Council
 President Herman Van Rompuy, left, following their bilateral meeting at the
palace in Jakarta. (AFP Photo/Presidential Palace/Cahyo Sasmito)

Jakarta. Visiting European Union chief Herman Van Rompuy has praised the progress of Indonesia’s democracy and its economic development, and says the EU can offer much more to Indonesia than the current level of cooperation.

In his speech at the opening of the 5th Europe-Indonesia Business Dialogue in Jakarta on Wednesday, Van Rompuy, the EU Council president, told the gathering that Indonesia had indeed undergone an impressive transformation since democratic and political reforms were initiated more than 15 years ago, and that the country’s robust economic growth and social development bore testimony to this.

He said that the energy of President Joko Widodo and his administration reflected the aspirations of a young and growing Indonesian population that looked to the future with great hope.

“I see great potential for expanding cooperation over the next five years between the new Indonesian government and the European Union,” Van Rompuy said.

“I was particularly interested this morning to hear President Joko talk of his vision for Indonesia as a maritime axis, and I feel that Europe, much of whose trade goes by the open seas, not least passing through the Indonesian archipelago, has much in common with you on this agenda.”

He said the EU was also interested in Joko’s plans for upgrading Indonesia’s infrastructure, for improving the business climate, and for cutting the red tape that can stop projects from getting under way.

“More streamlined and transparent procedures will certainly bring more European investment in this sector,” Van Rompuy said.

European companies are increasingly interested in Indonesia, and in 2013 foreign direct investment from the EU reached a record high of $2.4 billion, according to Van Rompuy. “The EU is the second-biggest investor in Indonesia this year,” he added.

But in spite of all these successes, Van Rumpuy said Indonesia was not yet realizing the full potential of the scale that European business had to offer.

“The EU’s trade with Indonesia is healthy, yet it is well below our trade with other smaller countries in the region, such as Singapore, Malaysia and Thailand. This is despite the fact that Indonesia is by far the largest economy in Asean [Association of Southeast Asian Nations], representing around 40 percent of total Asean GDP and population. We can do better.”

From 2004 to 2011, Indonesia received 12 percent of all EU investment flowing into Asean, and 0.4 percent of total FDI outflows from the EU to the world in 2011.

Deepening trade and investment links with the world’s largest trading bloc — the EU — will bring substantial gains to Indonesia, he said.

He said a recent study showed that a comprehensive economic agreement between the EU and Indonesia would boost our overall trade and facilitate more FDI from the EU, which in turn would help develop Indonesia into the manufacturing hub of Asean.

“My message here is that European companies stand ready to increase their already considerable investments in Indonesia, provided that the business climate is welcoming, open and transparent.”