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Hanover (German news agency) – Chancellor Olaf Scholz (SPD) calls for more speed in the negotiations on a free trade agreement between Indonesia and the European Union. He is committed to finally bringing the agreement, which has been discussed since 2016, over the “finish line”, he said on Sunday evening in his opening speech at the Hanover Fair.
“This would create a common economic area with well over 700 million people in one fell swoop.” Overall, Scholz also campaigned for stronger economic cooperation with the island state, which is the so-called “partner country” of the Hanover Fair this year. “Indonesia is the largest island kingdom in the world, the fourth most populous country in the world, and in the near future one of the ten largest economies in the world,” said the Chancellor. It is a country right in the middle, “in the heart of one of the most dynamic regions in the world, strategically located in the center of the Indo-Pacific, between China, India, Oceania and America”.
If one speaks of the 21st century as an “Asian century,” there is “no way around Indonesia,” said the Chancellor. An “important step” was taken in expanding economic relations last year: “With Indonesia, we have entered into one of the very first partnerships in the world for a fair transition to renewable energies.” Indonesia’s willingness to completely decarbonize its electricity sector by 2050 is also groundbreaking. “It’s demanding and ambitious,” says Scholz.
In return, the G7 will mobilize government and private investments in the tens of billions in the coming years “to accelerate Indonesia’s path away from fossil fuels and the ramp-up of renewable energies.” At the same time, the chancellor promised the island state, which will be represented in Hanover by President Joko Widodo, that he would work towards more “local added value” with regard to raw materials. Many of the raw materials that are needed for the transformation to climate neutrality and for digitization are currently being imported from China, although they are often not extracted from the earth there, but in countries such as Indonesia, Chile or Namibia. “So in countries that often benefit far too little from their natural wealth of raw materials.” The aim is to locate more processing stages where the raw materials are stored in the ground, according to the SPD politician. This not only creates “greater prosperity locally”, but also ensures that in the future there will be “more than just one supplier”. “That’s why, in my view, this combination of more local added value and greater diversification belongs in modern free trade agreements,” said the Chancellor.
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