International Conference on Indonesian Development

Toespraak | 16-09-2013

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Your Excellencies, ladies and gentlemen,

Over a hundred years ago a remarkable bond developed between a Dutch feminist and a Javanese princess. The princess was Raden Ajeng Kartini and the Dutchwoman was Estella Zeehandelaar. The book From Darkness to Light contains some of Kartini’s letters to Estella. In one of her first letters Kartini wrote, ‘I have so longed to make the acquaintance of a ‘modern girl’, who works not only for her own well-being and happiness, but for the greater good of humanity.’ In the correspondence that followed, the two young ladies – they were about your age – discussed women’s rights, work and marriage – hot topics also in those days.

It is good to see that over a century later, young Dutch and Indonesian people still discuss social issues. I am proud that the oldest branch of the PPI is here in the Netherlands, and that a new generation of Indonesians is keen to study here.

You represent a booming economy, and the Netherlands admires your country’s success. The Indonesian economy has been doing very well, despite the present malaise. Last year you overtook the Netherlands in the rankings of the world’s largest economies. And in other development aspects too, Indonesia has made substantial progress over the past fifteen years. Poverty is declining, the middle class is growing and stable, democratic institutions have been built. And your country has become an important player on the world stage, for example as a member of the G20.

And there seems room for even more growth. The McKinsey Global Institute predicted that by 2030, the Indonesian economy could rank seventh in the world. But you can only achieve this potential by tackling major challenges. It’s time for the next step in Indonesia’s development, towards an upper middle-income country. A country that has eradicated poverty and can provide good education, health care and public transport to all its citizens.

And that’s where you come in – the young people of Indonesia. Your challenge is to achieve sustainable and inclusive growth. To help the economic focus shift from the export of raw materials to more value-added activities for the domestic market, like services, manufacturing and high-tech. To ensure that products meet increasingly high quality standards. And that the same applies to the social and environmental conditions under which they are produced. That’s no small task. But as a longstanding partner I see plenty of opportunities for us to tackle those challenges together. For us to work together on the next step in Indonesia’s development.

Overall development is probably best helped with business and innovation. We have found that government, businesses and knowledge institutions are all equally important for success. So cooperation is crucial. This triple helix model of partnership is one of the topics of this conference. In the Netherlands we have expanded this model by adding civil society. We call it the Golden Diamond. Let me give you three examples of how cooperation using the Golden Diamond model can help Indonesia towards upper middle-income status. Three examples that correspond with key challenges on the path to further development.

The first challenge is good water management, an area of wide-ranging cooperation between the Netherlands and Indonesia. Dutch companies are sharing extensive knowledge and experience with their Indonesian counterparts in water management projects, ranging from sanitation to irrigation, and protection against flooding. Dutch NGOs, universities, businesses and the government have joined forces to assist Indonesia grow more crops with less water. And we are working together on coastal protection and development. In Jakarta, two Dutch consortia are aiding the Indonesian authorities in efforts to prevent flooding caused by land subsidence. Dutch companies are helping to protect it by designing water works and putting structures in place to maintain them. Thanks to the project, the lives of Indonesians are safer, and we are gaining valuable knowledge about the kinds of flood risks we might face in the future.

The second challenge is creating the right balance between economic growth and environmental protection. So that future generations also benefit from Indonesia’s abundant natural resources. And so that Indonesian farmers get a fair price for their products. The Dutch Sustainable Trade Initiative uses new and innovative models to involve smallholders in the supply of sustainable palm oil. Right now yields are too often low, and deforestation a serious problem. The new approach involves building a coalition of banks, producers, smallholders, purchasers and governments. Innovative financing models are being developed to help farmers replace their oil palms with higher yielding varieties. And farmers will be trained so as to increase productivity while reducing environmental impact. This will double yields and give farmers a much better livelihood. It will also increase the supply of sustainable palm oil. That in turn will reduce the pressure to clear rainforest for more palm oil production, so there’ll be less deforestation. In order to make a difference, this will be a large-scale initiative. At least 250,000 farmers in three areas in Indonesia will be involved.

The third and final challenge has to do with knowledge exchange and education. Starting with high-quality education tailored to the labour market. This is a common challenge. In the Netherlands our science and engineering education may be good, but it doesn’t attract enough Dutch students to meet our needs. It’s crucial that Dutch and Indonesian students find fitting jobs after graduation. So that you can add value to our economies.

Exchanging students is part of the solution. Over a thousand young Indonesians study in the Netherlands each year, half of them on scholarships. The number of Dutch students going to Indonesia for internships has increased sharply over the past few years. And there are over 250 partnerships between Indonesian and Dutch universities. They result in joint research, double degree programmes and an active exchange of knowledge.

And that exchange is also part of the solution, so I am supporting knowledge partnerships. Take the collaboration between institutes in Bandung and Wageningen to enhance horticultural production. Or the efforts of Agriterra and Wageningen to promote innovation in the dairy industry in Western Java through farmers’ cooperatives. Or our training programme to help Indonesian fish producers to access European markets by complying with EU food safety standards and regulations. By pooling our knowledge like this we can generate more business and innovation.

Those three examples present three challenges on which the Netherlands can work together with Indonesia. Water management, sustainable and inclusive growth, and education and knowledge. I hope that the rising generation – and that means you – will build on the cooperation between the Dutch and Indonesian governments, businesses, civil society and knowledge institutions. Because there are many more areas of mutual interest. Take health, logistics, agri-food and horticulture, sectors in which Dutch companies excel and longstanding cooperation with Indonesian counterparts. If your government can create an attractive business environment for innovative domestic companies and foreign investors, it will boost the international competitiveness of Indonesia’s producers. Economic growth will be accelerated and become more sustainable.

My aim is to deploy Dutch support and trade activities to our mutual benefit. Dutch expertise can help you to develop ports and construct water works. In return, the Dutch private sector will gain a toehold in your market. But there’s more to it than that. I encourage investment and trade activities that benefit both people and the environment, create employment opportunities and where possible involve the transfer of knowledge and skills. Sustainable, inclusive growth is in our interests and in the interests of Indonesia.

In the future, businesses and government need to focus more and more on the quality of what we deliver to our societies. And not just on end products. We also need to take responsibility for the wider impact on society and the environment. It is encouraging that in both our countries, young people are more and more aware of sustainability issues. If I were to ask you whether the challenge in national development is in the race to the top or the race to the bottom, there would be little doubt about your response. Moving up a level in the race to the top benefits the lower parts of society in greatest need of jobs and income. Indonesia is already a front runner with respect to decent work. I encourage Dutch and Indonesian partners to make decent work agendas and safe labour conditions part of their efforts for inclusive growth.

I am convinced, ladies and gentlemen, that your generation can take the next step in your country’s development. That we can work together in Indonesia’s transition to an upper middle- income country. And I hope our young people will work not only for their own well-being and happiness, but also for the greater good of humanity. Just as Raden Ajeng Kartini wished, back in 1899.

I hope you have a productive conference.

Thank you so much.