Speeches, etc.

Margaret Thatcher

Press Conference in Indonesia

Document type: Speeches, interviews, etc.
Venue: Wisma Negara, Indonesia
Source: Thatcher Archive: COI transcript
Editorial comments: 1530-1615.
Importance ranking: Major
Word count: 3285
Themes: Defence (general), Higher & further education, Monetary policy, Privatized & state industries, Energy, Trade, Foreign policy (Asia), Foreign policy (International organizations), Foreign policy (USA), Labour Party & socialism, Terrorism

Dr. Sukano, Ladies and Gentlemen of the Press:

May I thank Dr. Sukano for taking the Chair at this Press Conference. I did not know until a moment ago that when he was in England he actually lived in my constituency—but there was no private arrangement about him taking the Chair; he just told me as I came in today.

As you know, my visit to Indonesia will end in an hour or two. It is the very first visit by a British prime minister and this is therefore the right moment to sum up the two and a half days I have spent in Indonesia, mostly in the capital of a country of enormous size, but also, as you know, a rather wonderful visit to Bandung this morning.

I must say that I think Britain has not paid sufficient attention to Indonesia in the past. I hope—and indeed intend—that my visit will be followed up by more ministerial contacts, so that we can get to know each other better and thereby create the right basis for future cooperation.

Yesterday, President Suharto and I had a very wide-ranging discussion of world issues, as well as Indonesia's economic development, to which Britain can contribute more through our industry and technology. Our talks were conducted in an [end p1] atmosphere of mutual goodwill, and I believe my objective of promoting and raising the momentum of our political and economic relationship was amply fulfilled. We have a close identity of view on so many things.

I am particularly appreciative that President Suharto and Madame Suharto spared the time to travel the twenty kilometres outside Jakarta to join me in a visit to the wonderful Indonesian Miniature Exhibition, and I would like to add that this gesture underlined the great friendliness and kindness which I have met during my all-too-brief visit to Jakarta and Bandung.

As you know, we had a fascinating visit to Bandung this morning, especially to the Institute of Technology and to the aircraft factory, where they are achieving great things.

There is a great deal of future cooperation between Britain and Indonesia, especially in the realm of science and technology, and I was asked particularly about a number of things while I was at the Institute of Bandung.

Perhaps most heart-warming of all was the remarkable welcome we had from all the children and the students. We shall never forget it. It was very moving indeed.

Now, in our bilateral talks we have, as I indicated, discussed many things: Indonesia's agricultural and industrial development, areas in which we in Britain might help, for example, communications of all kinds whether rail, air or telecommunications; food technology; aerospace; education, especially training in the English language, and I would like to say that I think the British Council is doing excellent work here. [end p2]

We also discussed the world economy, East-West relations and arms control, and regional issues—notably ASEAN, Viet Nam/Cambodia and the Hong Kong Agreement.

The theme of our entire discussion was the need to maintain political stability and economic progress through cooperation between nations and groupings.

The European Community—shortly to be enlarged and greatly strengthened as a democratic grouping by the accession of Portugal and Spain—is one example of increasing that area of stability, but so is ASEAN, and I wish it well; and as you know, we make a practice of cooperation between the Community and ASEAN.

I am confident that Indonesia, as a major partner in ASEAN, will play an increasingly important role in ASEAN's work, just as I am confident that a resurgent Britain will now develop political and trading links with Indonesia to a much greater extent. There is an enormous amount to do between us to realise our full potential, not merely to serve the wider interests of our citizens—important as those things are—but also to promote business and jobs. Trade brings us together and identifies our interests, and I am sure that trade between Indonesia and Britain will increase as a result of the very friendly and warm atmosphere created by my visit here. We are clearly the best of friends and there is no sounder basis on which to construct future collaboration.

Those, I think, are the positive feelings which come out of this visit. My only regret is that it had to be so short. Thank you. Your questions. [end p3]


Madam Prime Minister, I understand that you yourself have asked questions about East Timor to President Suharto and also other members of your party to our Ministers, especially our Foreign Minister.

Will all these discussions, Prime Minister, do you think, lead to your Government changing its position on the question of East Timor?

And my second question, Madam Prime Minister: do you see the analogy of East Timor and the Falklands and if so, have you then learnt something from the discussions you yourself and other members of the party have had with Indonesian officials?

Prime Minister

No, I think perhaps you are very well aware that before I came I was asked about East Timor and said this was a matter for Indonesia and Portugal and the United Nations, and not for Britain.

I asked President Suharto about the position in East Timor and in particular the position about the International Red Cross. He assured me that the International Red Cross not only had access to East Timor, but was very welcome there. No analogy with the Falklands.


Prime Minister, could you say whether you and Dr. Habibie identified any particular field where Britain and Indonesia will cooperate in high-tech? [end p4]

Prime Minister

Well, I have been asked while I was here in particular about food technology, also in particular about the development of immunology. There are a number of areas in defence where we are already cooperating and hope to extend that cooperation, but when we do cooperate on technology, Dr. Habibie and the people at the Institute of Technology were very anxious that it should be done by way of transfer of technology—not merely supplying the goods, but supplying some of the know-how as well, and having a good deal produced over here.

The areas which I indicated were aerospace, food technology. We also have quite a lot of education technology—indeed, I think that your Minister of Education came over at one time to look at our Open University, and see the way we were doing things. But we hope, Dr. Habibie and I, to consider between now and his visit in June more specific areas of cooperation and perhaps we shall have more to say about that when he visits London in June.


During the talks with Britain and Suharto, both sides agreed on the need of stabilising the oil price. What steps should be taken according to your opinion to maintain the stability of the oil price in the future? [end p5]

Prime Minister

It is not easy to stabilise the price of a particular commodity. OPEC has tried by having limited production, but it is not always easy to achieve it and therefore, from time to time, the price has either risen or indeed fallen.

We had a particular problem in Britain. We are not members of OPEC, as you know, but there is an arrangement in Britain under which the Government, through the British National Oil Corporation, purchased 51%; of the production of the North Sea, and we have been doing so at the OPEC price. That meant that we were losing considerable sums of money, as we were not able to re-sell that oil for the OPEC price.

It is a sphere in which we now feel it will be better if Government were not involved and so we are in fact breaking up the BNOC—terminating the BNOC—and therefore, from now on, the price for the remaining three months of its life will be the market price, but naturally, one hopes that the market price will be as stable as possible.

A great deal will depend on the view the market takes. As you know, at the moment, world consumption is slightly above world production. The reason is because many people have been using up their stockpile of oil and they are waiting for the price to be right to start rebuilding those stocks. We none of us know when that will occur. We naturally hope in Great Britain that it will soon start to occur, because it will be a factor which will help to stabilise the price of oil.

[end p6]

Question (Chris Moncrieff)

Prime Minister, what is your view of the description of you by senior Opposition politicians in London as the enemy abroad in view of some of your remarks about British trade unions during your talks?

Prime Minister

I did not come all the way to Indonesia to discuss comments about me by someone at home.


As Viet Nam has overrun successfully almost the Kampuchean resistance and Viet Nam insists on the status quo in Kampuchea or a political solution in favour of them, would you think that the ASEAN security against the Soviet hegemony is now becoming more crucial?

Prime Minister

I am not quite sure of the drift of your question, but let me tell you our view of the Viet Nam/Cambodia situation.

We support ASEAN completely and we believe that there will be no true peace until Viet Nam has withdrawn completely from Kampuchea, and we support the present coalition in Kampuchea.

I am not quite sure what your question was, but I think that is about the right answer. [end p7]


The Prime Minister of Malaysia, Dr. Mahathir, has had talks with the Swedish Prime Minister, and it seems it has resulted in an economic, technical and scientific agreement to improve trade between their two countries. I wondered whether that was not the type of agreement you would like to have won.

Prime Minister

An agreement to improve trade. Frankly, I would rather have the trade than a general agreement and that is why, when we are talking about, for example. Science and technology, I think one needs to be particular about things, much more specific.

I went to Malaysia and I believe that the last difficulties in the relationship were removed, and I hope trade will improve but I hope it will improve not by way of a general agreement—I have signed so many general agreements in my time. I much prefer in the end to demonstrate cooperation when it comes to signing specific contracts.


Dr. Mahathir said afterwards that Malaysia was diversifying its trading partners instead of depending on its traditional ones…   .(inaudible)

Prime Minister

Well hardly, because we have not exactly been a traditional supplier in the last two or three years have we, so diversification is good news.

[end p8]

Question (David Walter, ITN)

Reverting, just for a moment, to the Labour Party…

Prime Minister

I do not see why you should. Look! We are in Indonesia. We are having a press conference with our Indonesian guests. My interest at the moment is not in the Labour Party, and I am sure you will understand that I do not feel I can say anything constructive about it.



Prime Minister

Maybe, but let us have our Indonesian guests first.



Prime Minister

Yes, I did think that the students who had been trained in Britain, many of whom are now teaching others, the quality of their training was very good, and I think that they appreciated that fact, and I just regret to say that I cannot promise enormous increase in aid for students at the moment.

We do have a certain amount, as you know, of technical cooperation and we have a certain amount of grant for that. I cannot promise immediate increases.

You are aware that quite a lot is done through the British Council.

[end p9]


(very low level, but regarding interest rates)

Prime Minister

As you know, we have a consensus international agreement on the rates of interest that we all charge, and the point of having that consensus agreement is so we do not have competitive subsidies and competitive interest rates. Nevertheless, where they do occur we obviously consider matching them, and sometimes in certain projects which qualify for aid, you in fact give a specific grant to things that qualify for development on the aid and trade budget, which you know all about.


(inaudible) (more room for Indonesian goods in Britain)

Prime Minister

We have a very open market in Britain. I think what you are referring to are the quotas which are operated through the European Community, especially there is a quota for example in plywood, and there is a quota in textiles. The Multifibre Agreement comes up to be negotiated next year and may I point out that in Britain we are the biggest importers in Europe of your plywood.


Madam Prime Minister, as the host country to the summit meeting of the seven most industrial countries in summer last year, do you feel that it is your moral obligation to be [end p10] influential that a solution especially concerning high rates of interest and debt loans be recognised?

Prime Minister

Yes, we did discuss that last year and undoubtedly will discuss it again at the Bonn Summit this year. As you know, we agree that it is right that the United States should do as she is doing, take steps to get down her deficit. President Reagan sent many proposals to the Congress; they are now being discussed in the Senate and in the House of Representatives. It will be some time before we know the amounts or direction of the reductions in public expenditure. It will be some time therefore before we are able to calculate what the United States deficit is likely to be and by how much it has gone down. But all of the signs are that it will go down, because strenuous efforts are being made to that end, first in a down-payment last year and second, in the proposals now. That can only be good for international interest rates, because at the moment the height of them, because of the size of the deficit, is still drawing in large capital sums to the United States, some of which could be spent elsewhere, and also it is keeping other people's interest rates higher than they would otherwise be and lower interest rates certainly are a prerequisite for maintaining increasing growth.

[end p11]


During your visit to Bandung, you made a statement that defence is a third key area in which Indonesia and Britain can cooperate. The subject, I understand, was also raised during your speech at the dinner here.

Could you say what field of defence Indonesia and Britain are going to cooperate?

Prime Minister

No, I am not going to say, because one does not in fact discuss in public the defence cooperation to any great extent. When any contracts are made, you doubtless will know about them.

Question (Reuters)

Did you discuss the question of the increasing Soviet use of Cam Ranh Bay and other Vietnamese facilities …   .in Vietnam, and secondly, do you share ASEAN's concern over the communist threat to the Philippines?

Prime Minister

The answer to your first question is “No” . Of course, one is concerned about communist action in the Philippines and of course one does have a word about it wherever one is in this area—not only in this area, but outside as well. [end p12]

Question (BBC & Financial Times Correspondence)

Britain has been rather left behind in cooperating with Natania (phon.) in particular and in other projects here. Did you discuss any cooperation or technical cooperation of a solid nature with Natania—France, West Germany, the United States and Japan already have agreement with Dr. Habibie. Did you also discuss such an agreement and what would it entail?

Prime Minister

No. Dr. Habibie and I have been discussing science and technological cooperation. We have no agreement yet, but we shall discuss the matter further in London when he comes, and we shall be discussing it through the usual channels between now and then.


A couple of the issues that come between Indonesia and its trading partners, particularly European partners, are Indonesian protectionist measures on shipping, insisting that even grant cargo and aid cargo come on Indonesian vessels; but also insist on making counter-trade agreements.

Did you discuss either of these issues and how would that fit into increasing British-Indonesian trade?

Prime Minister

We did not discuss those particular issues. Shipping matters, as you know, are usually discussed within the shipping conference. With regard to services generally, we did discuss [end p13] the general need for a new round of GATT, which as you know, at the moment does not cover services and does not cover a number of things, and I think both Indonesia and ourselves would like—we certainly would like—a new round of GATT, and we shall be pushing that at the Bonn Summit.


Prime Minister, one of the frequent complaints among British businessmen here is that they do not receive enough support, particularly in terms of finance, from the British Government. Would you be able to reassure them on these questions or have you been made aware of the problem here?

Prime Minister

Well, on the whole, you would not expect the British Government itself to finance many deals, except through the two customary operations—one is through ECGD, which is covered by …the rates of interest …by a consensus agreement, and when the consensus agreement is broken, then we do take certain steps; and the other of which is covered in non-defence matters by the Aid and Trade Provision, and I think naturally Indonesia would like increasing amounts under the Aid and Trade Provision which is operated under the Overseas Aid Department and the Trade Department and what we would like would be an agreement which would cover several years. But I cannot naturally offer as much as I think Indonesia would like, but we would like something like a five-year agreement.

You will know that we are part of the Inter-Governmental [end p14] Group on Indonesia, again where these things are discussed.


Madam Prime Minister, after your experience of the flood last night, do you feel that high-tech aid should be offered Indonesia first and should be something the equivalent of what people in London like to call the “Eighth Wonder of the World” —the London Barrier—(The Thames Barrier).

Prime Minister

I can assure you it would be very very expensive.


My second question is this. When do you see the end of what you yourself called the “inhuman and barbaric action” like the Brighton/London bombings?

Prime Minister

We have agreements with various countries. Indeed, I think all countries wish to counter terrorism and we do cooperate as much as we possibly can and the amount of cooperation is steadily increasing. It is of course very difficult by its very nature to eliminate it. The steps we take are as effective as they possibly can be.

Of course, the most effective one is to make strenuous efforts to see that terrorists do not get hold of the means with which to pursue their bombing tactics.

[end p15]

Question (Indonesian Television Network)

Were there any discussions concerning whether British businessmen ever found it difficult to do business with Indonesia and if so, were there any discussions on how to improve business relations?

Prime Minister

I saw quite a lot of British businessmen the other evening at the reception which we did manage to get to in spite of the temporary flood. I did not find any complaints really, only great compliments to our present ambassador and his staff for the excellent back-up they were giving to British businessmen here, and I am sure I am delighted to be able to say that in front of them!