JP/Arief Suhardiman

Today Swiss people all over the world, including in Indonesia, are celebrating their National Day. The special relationship between Switzerland and Indonesia is already 65 years old this year. In connection with the celebration of these two events – Swiss National Day and the 65th anniversary of the establishment of diplomatic relations between Indonesia and Switzerland, The Jakarta Post’s Veeramalla Anjaiah interviewed Swiss Ambassador to Indonesia Yvonne Baumann recently. The following are the excerpts from the interview.

Question: This year Switzerland and Indonesia celebrate the 65th anniversary of the establishment of diplomatic relations. What, according to you, is the most inspiring fact that has kept the relationship growing?  

Answer: Already in the 17th century long before the first official Swiss representation in Indonesia had been opened – researchers and merchants from Switzerland travelled to this immense archipelago and explored its diverse and fascinating culture, languages and traditions, as well as its flora and fauna. It is characteristic of Swiss-Indonesian relations that they were never limited to official diplomatic and inter-governmental affairs. Rather there has always been exchange and cooperation between private companies, business people, research institutions and scientists.

Despite the huge geographical distance between Switzerland and Indonesia, we have many similarities that may inspire prosperity in our relationship. Switzerland is also a diverse country in terms of culture, language and religion. We have three official languages, German, French and Italian, and a fourth national language, which is Romansh. “Unity in diversity” is the main principle of both our countries and in fact Indonesia and Switzerland are both “nations of consensus”.

I think we can also draw inspiration from the distinctions or complementarities between our two countries: Switzerland is a small land-locked country in the heart of Europe, whereas Indonesia is a large archipelago in the up-and-coming region of Southeast Asia. Switzerland is poor in natural resources but highly innovative and has by now an ageing population, while Indonesia has great potential not only in its immense natural resources but also in its young and promising population. All this makes for an inspiring relationship.

What were the major milestones for these fast growing ties during the last 65 years?

Already in 1863 a Swiss consulate, one of the first in the region, was opened in Batavia (as Jakarta was then called). In 1952, official diplomatic relations with Indonesia, by then independent, were established through the opening a diplomatic representation in Jakarta, which was up-graded to an Embassy in 1957. Later we also added three Honorary Consulates in Bali, Makassar, and - two years ago - in Surabaya.

In the last 65 years, political, economic and cultural relations have been growing, and we have seen many exchanges at the high political level. The first president of Indonesia, Sukarno, visited Switzerland in 1956.
Over the last few years we have had frequent ministerial visits. In 2015, Swiss Foreign Minister Didier Burkhalter came to Indonesia, in 2016 Infrastructure and Energy Minister Doris Leuthard visited - she was then vice president and today the President of the Swiss Confederation - and several Indonesian Ministers travelled to Switzerland.

President Joko “Jokowi” Widodo (right) welcomes Swiss Federal Councillor and Minister for Economic Affairs, Education and Research Johann N. Schneider-Ammann (center) at the Presidential Palace in Bogor recently while Swiss Ambassador to Indonesia Yvonne Baumann (left) looks on.(ANTARA)

Federal Councillor Johann N. Schneider-Ammann, the Minister for Economic Affairs, Education and Research, was here just two weeks ago, accompanied by a business and a science delegation. All three ministers have also been received by President Joko Widodo for a courtesy call. The frequency of the ministerial visits shows the close and friendly ties as well as the mutual interest. It is also quite remarkable since our government consists of only seven members, the rotating presidency included.

Important for our relations was the technical assistance and cooperation program since the early 1970s. The support for the establishment of many polytechnic schools in Indonesia, which are still up and running today, had a major impact on the perception of Swiss engagement in Indonesia.

Economic ties form the backbone of bilateral ties. Could you please throw some light on bilateral trade and Swiss investment in Indonesia?

Despite its relatively small size, Switzerland was the 11th largest investor in Indonesia and the 3rd largest from Europe in 2016. However, there is a discrepancy between the statistics and according to the figures from the Swiss National Bank, we would have been among the top 10 in Indonesia over the last few years, as we are in many other countries. Our trade volume – now close to US$3 billion - has been growing steadily, with an increase of more than 50% in 2016 alone, due to the strong growth of Indonesian exports to Switzerland. Nevertheless, Swiss exports could still do better, particularly if we compare with other countries in the region.

Currently there are more than 150 Swiss companies operating in Indonesia that have created at least 21,000 jobs. In order to further promote trade and investment relations, we recently opened the “Swiss Business Hub Indonesia”, located on the premises of the Swiss Embassy in Jakarta. It aims to help companies and investors from Switzerland access Indonesia’s large and dynamic market. We would also welcome more Indonesian investment in Switzerland.

How does Indonesia, the country with the world’s largest Muslim population, figure in Swiss foreign policy?

From the Swiss foreign policy perspective, we see the potential and strategic importance of Indonesia as a whole. It is the third biggest democracy in the world, the largest country within ASEAN, located in a
strategic position between the Pacific and Indian Ocean, it is an emerging market turning more and more into a regional production and export hub, and it has an important soft power potential that can reach far beyond the region.

As the country with the world’s largest Muslim population, where mainly a moderate Islam is practiced and six religions are officially recognized, Indonesia can play an important role as a model in other parts of the world and act as a facilitator. I very much hope that Indonesia can preserve its pluralism and tolerance and continue to see its diversity as an asset. We see Indonesia as an important partner.

What areas are you focusing on in Indonesia?

Trade and investment relations are certainly very important for us. Furthermore, we just launched the next four-year cycle (2017-2020) of cooperation that aims to support sectors of the Indonesian economy in becoming more competitive. In this context, we have a new focus on vocational education and training. With this we are in some way reconnecting to our old cooperation “legacy”. We will support the Indonesian government in establishing new polytechnic schools in the manufacturing sector as well as a hospitality school. In these areas Switzerland has proven expertise.
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Switzerland is poor in natural resources but highly innovative and has by now an ageing population, while Indonesia has great potential not only in its immense natural resources but also in its young and promising population. All this makes for an inspiring relationship.

The development of sustainable tourism is another focus of our cooperation since Indonesia has obviously a great potential for tourism. Also, we will continue our large program in helping cocoa farmers improve and increase their production and secure better market conditions. Together with the World Bank and other partners we support the national and local governments in public financial management reforms.

We also have a dialogue on human rights issues with the Law and Human Rights Ministry and work on joint projects, for instance, in the field of torture prevention. Within the United Nations and other international bodies, we have a good cooperation with Indonesia on environmental issues.

Switzerland is an amazing country. With such a small population, you have a world-class service sector and manufacturing sector. What is the secret to achieve such excellence in so many areas?

Our development into one of the most innovative and most competitive countries in the world did certainly not happen overnight. Did you know that during the 19th century, Switzerland was one of Europe’s poorest nations? Some of our provinces even paid our compatriots a one-way ticket to the New World in order to alleviate the burden they put on the state. Whereas today, we have an attractive labor market where more than one fifth of the workforce are foreign nationals.

Swiss Ambassador to Indonesia Yvonne Baumann (right) along with director general of taxation Ken Dwijugiasteadi (second from right), witnessed by Finance Minister Sri Mulyani Indrawati (second from left) and Financial Services Authority (OJK) commissioner for non-banking financial industry Firdaus Djaelani (left), sign the Joint Declaration on Automatic Exchange of Information at the Directorate General of Taxation central office, in Jakarta on July 4. Under the declaration the Swiss and Indonesian governments agree to automatically exchange information on bank accounts in compliance with Standard Common Reporting starting in 2018, with the first exchange expected to begin in 2019.(JP/ Jerry Adiguna)

To overcome poverty we had to innovate. Several factors were important. The key was and still is education. Switzerland has no natural resources, except for water, is land-locked and has a limited workforce. So we developed a manufacturing industry that produces high added value because almost all the raw materials have to be imported. And since our domestic market is limited due to our relatively small population, we have to export and find markets all over the world for our highly specialized, high-quality and high-tech products. Since these products and services are relatively expensive, our companies – the big ones and the small ones – need to constantly innovate in order to stay competitive. To do all this we had to invest a lot in education. And that is how it started in the 19th century.

For high-quality production and services you need a very well trained workforce. Leading economists therefore link the economic achievement of Switzerland to our vocational education and training system as the “decisive historic success factor”.

Our so-called dual education system provides vocational schools, which work hand-in-hand with private companies where apprentices simultaneously get on-the-job training. This approach enables young people to enter the labor market as qualified workers in professions requested by the private sector and to receive a good salary right from the beginning.

Equally important is the close cooperation between our universities and research institutions – which are also high up in the international rankings – with the private sector. That is key for innovation and competitiveness. Switzerland is also a hub for tech startups. The Swiss Federal Institute of Technology in Zurich alone has created hundreds of high-tech startup companies. So the innovation power of Swiss companies and institutions is crucial for excellence.
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From the Swiss foreign policy perspective, we see the potential and strategic importance of Indonesia as a whole... it is an emerging market turning more and more into a regional production and export hub, and it has an important soft power potential that can reach far beyond the region.

Besides the education system, highly developed infrastructure is another factor for our economic success. And certainly, our political system with well-functioning institutions has helped as well. Since the adoption of our constitution in 1848, which shaped modern-day Switzerland, we were blessed with political stability and the absence of armed conflict.

How big is the Swiss expat community in Indonesia?

Currently 1,147 Swiss citizens are registered at our Embassy. The majority of them are living on the island of Bali.

Last but not least, how do you think Indonesia-Swiss bilateral relations will shape up over the next five years?  

As you can see by the examples I mentioned, the relations between our two countries are already very good, close and fruitful. I am confident that, on this basis, they will grow even stronger in the next years. In trade and investment there is still great potential. With its steadily growing economy, good macro-economic conditions and large market, Indonesia is one of the most attractive investment destinations for Swiss companies in Asia. On top of that, the country has recently regained its investment grade, a great achievement.

Swiss investors appreciate the Indonesian government’s ambitious efforts to develop infrastructure and to strengthen the business environment.

One important issue is the pending Indonesia-EFTA Comprehensive Economic Partnership Agreement (CEPA). Switzerland, being a member of the EFTA (European Free Trade Association), hopes that, after 12 rounds, these negotiations can now be concluded soon. We are convinced that a CEPA would be greatly beneficial for market access for both sides since our economies are largely complementary. We would also like to negotiate a new bilateral investment treaty. This is important for our investors.

Furthermore, we think that there is the potential for closer cooperation in research and technology. There are already a few promising joint research cooperation projects going on, for instance in the development of new vaccine formulas for pandemic influenza, including the transfer of the corresponding technology to local Indonesian companies. We recently had two high-profile science delegations visiting to explore research cooperation opportunities in Indonesia

And then I think our new – or renewed – cooperation in vocational education and skills development is important and will bring our countries closer together.

And finally, we very much hope that President Joko Widodo will come to Switzerland for a state visit.