Arif Havas Oegroseno (JP/Dwi Atmanta)

Indonesian Ambassador to Germany Arif Havas Oegroseno shares his views and expectations of Indonesia’s participation in Hannover Messe in April 2020.

Question: Why is Hannover Messe important for Indonesia?

Answer: First, the event gives Indonesia a chance to gain prominence in the industry and trade community in the world, in Europe and Germany, in particular.

When I arrived here one and a half years ago, Germany released statistics on its bilateral trade with 239 states. Indonesia ranked 45th, below our Southeast Asian neighbors Malaysia, Singapore and Vietnam. To make exporters and importers aware of Indonesia, we proposed ourselves as the partner country for Hannover Messe, as other Group of 20 members had done. We competed with other countries.

Second, from a series of discussions with the Deutsche Messe CEO, we found that the event would not only showcase our achievements in industry but Indonesia as a whole. We can promote our Industry 4.0 and mastery in new fields, especially the digital economy, start-up platforms, programming and coding.

If necessary, we can promote our Industry 3.0, as long as we can attract more investment.

We also think of the Hannover show as a gateway to reach new markets, such as Africa. Many African businesspeople will turn up for the trade fair. They might have not yet developed Industry 4.0, but they offer land and market to Indonesia.

Third, Hannover Messe will be the right place to display our state-owned enterprises and so-called hidden champions, or Indonesian companies that invest in Germany. Traditionally, we seek every path to bring in investment, but have yet to think about how to encourage Indonesian companies to invest overseas — and get protection from the state through Indonesian embassies.

As far as I know, there are nine Indonesian investors in Germany. They pay taxes, have created jobs and therefore contributed to the German economy. We have not optimally explored this strength.

Some of our state-owned oil and gas enterprises have expanded overseas, such as in Iraq. But we haven’t seen companies in other sectors follow suit. Our banks, for example, can emulate their foreign counterparts that have penetrated the Indonesian market.

What can we expect from the event?

After the trade show, we hope to increase the volume of our bilateral trade with Germany. The value stands at US$6.6 billion. In the next five years, the figure could jump to $10 billion, if we could build access to the market. That’s based on our analysis here.

We hit $9 billion in the past but the value then steadily declined due to various reasons, including the relocation of German investment to Vietnam, Cambodia, Laos and so on due to labor costs. In the manufacturing sector, labor costs still matter. However, we can offset the cost if we shift to digitalization.

We actually have a clear benchmark in setting our target in Hannover Messe. We have regularly taken part in the International Tourism Bourse in Berlin. We were once selected as a partner country and the president paid a visit. The outcome is real. The tourist industry contributed $17 billion to the country’s foreign exchange reserves last year. It means that it’s not impossible to boost our trade after participating in an international trade show and following it up with intensive promotion.

How does the division of labor between Jakarta and the embassy work?

The embassy lobbied the organizer and the German government to win our bid to become the partner country. We also advise Jakarta regarding the selection of companies and start-ups eligible for the event. The embassy is also responsible for road shows in three cities across Germany. The government in Jakarta will arrange road shows in 15 countries outside Germany that have regularly turned up for the trade show, like the United States, Japan, China, Korea, India, France, Spain and Sweden.

How has the political agenda at home, such as elections and new Cabinet formation, impacted preparation?

There has been no impact. The most important thing is selecting the companies that will represent Indonesia at the event. We will curate hundreds of companies and select 100 champions in November.

Applications to participate can be submitted starting in December, so we will have enough time.

How will the trade show strengthen the relationship between Indonesia and Germany?

We are looking forward an unprecedented Indonesia-Germany vocational center, which will help Indonesia’s transition to Industry 4.0. More than 1,000 German nationals are in Indonesia working as trainers in vocational schools and polytechnics across the country. The problem is that there is no specific institution to administer the cooperation, while Malaysia and Thailand have one and Vietnam is in the process of establishing one.

Ideally, the center designs a curriculum that covers digital industry, production technology, business and management and the German language. It should also provide consultancy on how to improve vocational education and training that schools and the industry need the most.

In the long run, the center will impact on our industry. In Malaysia, such a center has long been in place, therefore no wonder many Malaysian products are accepted in Germany.

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