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APEC 2020 & INDONESIA IN THE MIDST OF GLOBAL PANDEMIC
https://www.apec.org/

Hendra Manurung, is currently a doctoral candidate of International Relations, Padjadjaran University, Bandung; Teuku Rezasyah is an Associate Professor of International Relations at the same university

Malaysia was assigned to host the APEC meeting in 2020, and hope the commitment of APEC leaders’ countries to the multilateral trading system. This commitment is important in order to maintain global market and financial stability so that global trade and foreign investment guarantees continue to flow in times of crisis and global economic recession.

The APEC 2020 event theme is ‘ Reimagined: Priorities in the Aftermath of COVID-19’. Indonesia, through its ministry of trade, highlights APEC contribution in the midst of a global pandemic outbreak being relevant to overcome global uncertainty in the current economy and trade outlook.

In fact, for two years in 2018 and 2019, the APEC leaders’ forum failed to reach a final agreement at the APEC leader level to overcome various global challenges.

As the host, Malaysia faces considerable challenges, namely the achievement of the Bogor Goals target which is still not as expected, it is not easy to formulate a new post-2020 APEC vision that can accommodate the interests of the entire APEC economy, and high hopes for a joint declaration at the APEC leadership level.

However, apart from the need to ensure the growth of the digital economy, it also needs a sustainable inclusive economy and the optimal use of digital platforms in financial transactions. Furthermore, it is necessary to ensure and simplify cooperation between the government and the private sector in the Asia Pacific countries region.

Indonesia, China, together with a number of leaders of APEC member countries in the APEC annual meeting in Kuala Lumpur, Malaysia were held virtually to encourage a more open, transparent trade, and strengthen multilateral cooperation. It is hoped that these norms, principles, and steps will greatly support the performance of the global economy which is being severely affected by the COVID-19 pandemic.

President Joko Widodo has prioritized the importance of developing a favorable climate for foreign investment in Indonesia and the Asia Pacific region. It is possible that the Omnibus Law will improve the business climate and support national economic growth, along with regulatory and bureaucratic reforms. This is important considering the flexibility of regulations and the dexterity of the Indonesian bureaucracy in dealing with the current difficult times so that it is ready to open the widest possible door for businessmen and investors through the application of new methods.

The Omnibus Law which massively simplifies various regulations is said to aim to create a quality business and investment climate for business actors, including micro, small and medium enterprises. Although, this decision has sparked resistance, protests, and controversy in the country, however, it is expected that this regulation will be able to reduce overlapping regulations and complicated and complex procedures. The cumbersome licensing bureaucracy was also reduced. Illegal fees that have hindered business and investment entry are eradicated.

This rule also makes it easier for MSME business actors, where they do not need to apply for a permit but simply register the type of business. The entire licensing process is integrated into an electronic system through an online single submission.

Business activities and investing are made easier and less difficult. The formation of a limited liability company is made simpler and there is no longer a minimum capital limitation. Patents and brands are also being processed accelerated. Land acquisition and optimization of land utilization for public interest and investment will be much easier.

The APEC economy is expected to become a pillar of world economic stability by focusing on equitable economic cooperation so that all levels of society can participate and enjoy economic prosperity equally. APEC’s contribution can be achieved by boosting human resources potentials. It is very important to support sustainable economic growth in member countries including Indonesia which is also in line with the vision of the central government.

Suppose Indonesia will play a proactive role as Southeast Asia leading economy in supporting the implementation of the APEC blueprint related to strengthening the global value chain for the 2020 to 2025 periods.

Indonesia’s active role is in accordance with President Joko Widodo’s direction in RPJMN 2020 to 2024 in supporting Indonesia’s economic transformation, from dependence on natural resources shifting to an economy based on manufacturing competitiveness and the provision of high-value-added modern services.

It is certain that Indonesia will cooperate closer with other pioneer countries in the world economy, such as China and the US, in designing a capacity-building program for the APEC economy to gain more benefits from the global supply chain.

It is most likely that Donald Trump will represent the US at APEC 2020 Summit. Trump’s presence will be his second participation after 2017. Trump has been criticized for being less involved in the East Asia Summit in early November as part of the 2020 ASEAN Summit activities held virtually in Hanoi, Vietnam.

Chinese President Xi Jinping promised to open up his domestic market more widely, actively cooperating with all countries, regions, and companies.

Xi Jinping stressed that China’s gross domestic product has reached 10,000 US dollars per year. The number of Chinese middle-class citizens currently reaches more than 400 million people. Various international agencies are projecting that the Chinese retail market in 2020 will penetrate the US $ 6 trillion.

Thus, it is certain that there will be greater demand for quality products, the use of information technology, and the standardization of service quality from around the world.

It is expected that through the signing of a regional economic comprehensive partnership (RCEP) will have an important meaning in global trade and sustainable multilateral cooperation for economic integration in the Asia and Pacific region.

Moreover, with the election of Joe Biden as the 46th US president in early November 2020, it is hoped that the US government will be more constructive and emphasize goodwill in dealing with other countries in the region without conflicting with other economic powers.

RCEP for developing countries can reduce trade barriers to agricultural products, manufactured goods, and components that make up the majority of their exported commodities.

However, the RCEP partnership is considered to have little to do with trade in services and the availability of access for various companies to operate in their respective economies, something the US and other developed countries want.

Also, it is necessary to gradually reduce tariffs and institutional costs, develop a number of import trade promotion innovation demonstration zones, and expand product imports and strengthen high-quality services in all member countries.

Most APEC countries face unprecedented times, demanding bold responses along with the world’s greatest health and economic crisis of a hundred years. For sure, these challenges demand sustaining cooperation, coordination, and collaboration actively without any left behind through market integration, creative innovation, and regional inclusion.

The crisis response remains a pressing concern in many economies, and requires an ongoing focus on ensuring access to essential medical supplies and services, including vaccine availability; keeping supply chains functioning, and avoiding fragmented policy approaches, including in the digital economy and the safe resumption of travel. These would serve to revive all business activities and market demand that would accelerate global economic recovery.

Free and open trade and investment have indeed resulted in greater prosperity within the Asia Pacific along with underscoring the fact that benefits accruing from trade and investment have not permeated across all segments of all society.

Even today, there is much room for us to improve the narrative of trade and investment with a view to bring tangible benefits to all people fairly.

To conclude, APEC’s success key is openness, cooperation, and transparency amongst member-countries to look for Asia Pacific economic recovery sooner or later.

JAPAN-AUSTRALIA DEFENSE PACT IN INDO-PACIFIC
www.idntimes.com

Hendra Manurung, is currently doctoral candidate of International Relations, Padjadjaran University, Bandung; Teuku Rezasyah is Associate Professor of International Relations at Padjadjaran University, Bandung.

It is not difficult to understand why Japan and Australia plan developing defense cooperation for some years previously. Most likely the factor of militarization and deployment of the Chinese navy since late December 2019 in the South China Sea is one of the main triggers.

The defense pact is confirmed to be Japan’s first agreement after 60 years to allow a foreign military presence on its territory, since the status of a defense agreement in 1960 with the United States, which allowed America to place warships, fighter jets, and, thousands of military troops on board, around the territory of Japan.

The challenges and risks posed to the global and regional geostrategic landscape, particularly by or under the impact of the COVID-19 pandemic, as well as the dynamics in major power relations.

At present, all countries in these regions also face non-traditional challenges such as terrorism, smuggling, natural disasters, and cybercrime, which no single country can tackle and overcome on its own, have been widely considered as common concerns by policy-makers regional leaders.

Meanwhile, ASEAN as a regional organization should to be serious on responding to current regional conditions and immediately reducing escalate tensions that may arise and lead to open conflicts. After the US presidential election on November 6, 2020, Joe Biden and Kamala Harris won the election and will be sworn in on January 21, 2021, as the 46th US President replacing previous president, Donald Trump (45th US President, 2016-2020).

The good news of new US leadership is predicted will reduce the US and China trade war globally along with both major powers rivalries in the South China Sea and India and China border disputed conflict killed twenty and injured others, Indian soldiers, recently.

From 1967 to 2020, ASEAN as a regional organization is able to maintain regional cooperation and supposed to be remaining as the primary driving force in steering regional peace and stability to develop further as a central pillar in the evolving regional security architecture years ahead.

The defense pact between Japan and Australia was agreed upon and signed by Yoshihide Suga and Scott Morrison in Tokyo on November 17, 2020 (Kompas, 19/2/2020). The two countries have been negotiating a six-year defense agreement (2014-2020), although this agreement still needs to be ratified by both parliamentarians in Canberra and Tokyo.

This latest agreement is to facilitate more joint military operations and exercises in their respective regions. If needed in a situation of urgency, it is possible for the Japanese military to protect Australian troops and vice versa.

The pact, called the Reciprocal Access Agreement, provides a legal framework that allows troops to visit each other’s countries and conduct joint training and operations. These developments have further strengthened the defense relationship between the two US allies.

The move will also be Japan’s first agreement to include a foreign military presence on its territory since signing a troop status agreement in 1960 with the United States. Tokyo works closely with Washington D.C, enabling the US to deploy warships, fighter jets, and thousands of troops in and around Japan as part of a military alliance on a regional security home-base.

It is implemented by deploying around fifty thousand US soldiers and its 7th fleet armada. Perhaps, Australia also might be able to send two thousand to five thousand military troops, warships, and frigates to securing Japanese territories.

Japan and Australia previously established defense cooperation in 2007, a first for Japan with a country other than the US. Then in 2013, the two countries agreed to share military supplies mutually, and in 2017 the cooperation boosted to include the procurement of military ammunition after Japan then relaxed import restrictions related to the transfer of weapons equipment.

http://amscip.org

Essentially, the two countries, Australia and Japan indeed do not explicitly mention China’s presence in the region as a major and real threat in the Defense Pact. However, this defense agreement was carried out to strengthen both countries’ defense cooperation in response to the expansion of China’s military presence in the East China Sea, South China Sea, Hong Kong, and beyond. Obviously, these two countries are targeting China.

In the South China Sea, Beijing has been accused of militarization in disputed territorial waters, while in the East China Sea, Japan and China have disputed over ownership of the island of Senkaku. On the other hand, Canberra is also arguing with Beijing over restrictions on the export of a number of Australian exporting products to China.

As with other defense pacts, this agreement is a right and part of state sovereignty to maintain regional peace and security and the survival of their national interests in the region.

However, if in the end, this defense pact will lead to the deployment of military force, then of course this can create tension in the situation and can trigger an escalation of open conflict in the Asia Pacific region.

Previously, the Japanese government had stepped up defense under former Prime Minister Shinzo Abe, by purchasing stealth fighters and other modern military weapons, as well as encouraging Japanese military cooperation and adjusting the compatibility of military weapons with America.

In addition to discussing the defense pact between Japan and Australia, they also discussed cooperation in overcoming the coronavirus and hydrogen technology. Japan aims to become the third-largest carbon-free economy by 2050.

During the meeting, Morrison also discussed energy and climate change with Japanese businessmen and indicated that carbon capture and storage and low-emission technologies would be part of the domestic solution. Australia has agreed to achieve zero carbon emissions within the stipulated time.

Morrison has rejected calls for a 2050 target, vowing to do so when it can explain the economic costs to the Australian people. Australia is heavily dependent on coal and gas exports. Korea, the US, and the UK have designated 2050 as zero carbon emissions as the UK has urged Australia to reduce carbon emissions.

During his visit, Morrison also met with the president of the International Olympic Committee, Thomas Bach, who is trying to push Queensland to host the Summer Olympics and Paralympics in 2032.

Japan and Australia are currently having a less than harmonious relationship with China. With Japan relations deteriorated due to Japan’s wartime territory of China and sovereignty dispute in Senkaku, a chain of islands in the East China Sea regions known as Diaoyu in China. The Japanese administered the island; however, Chinese military surveillance ships were frequently near the island. Meanwhile, Australia clashed with China over Prime Minister Morrison’s appeal in April 2020, explicitly asking for a thorough comprehensive transparent investigation into the global outbreak of the coronavirus and upsetting China to continue with restrictions on imported products from Australia.

Japan has embarked on a vision of the “Free and Open Indo-Pacific” of economic and security cooperation as opposed to Chinese influence, and recently Japan hosted foreign ministerial discussions among countries known as the “Quad” which consists of from America, Australia, and India.

These four countries are trying to invite countries from Southeast Asia and its surroundings to reduce the expansion of Chinese influence in the Indo-Pacific region.

This bamboo curtain country defends its decisions and behavior in regional seas as peaceful actions and denies violating international rules and deliberately ignores the 1982 UNCLOS. China also considers the formation of the Quad as the embryo of NATO birth in the Asia Pacific which aims to fight it frontally.

Warships and aircraft from the four “Quad” countries kick off the annual joint military exercise Malabar in the Bay of Bengal, India on November 3, 2020.

The joint military exercise is being carried out less than a month since mid-October 2020 following a highly symbolic Quad meeting in Tokyo with foreign ministers from the four most powerful democratic countries in the Indo-Pacific region.

Australia is rejoining the exercise for the first time in 13 years, since its participation in 2007.

The Malabar exercises are not officially linked to the Quad forum, but they are clearly a counterweight to Beijing’s expanding military and political influence in the region.

The Quad’s joint military exercises in Malabar have the veiled intention of thwarting Chinese influence.

The military activity is divided into two phases, namely the first phase starting from 3 to 6 November 2020, followed by the second phase at the end of November.

These military exercises also include anti-submarine and anti-aircraft practical exercises designed to improve interoperability between the military forces of the four nations.

This joint Malabar military exercise certainly provides an opportunity for the navies of the four like-minded nations, sharing a common vision of a more stable, open, and prosperous Indo-Pacific, to operate and train together in achieving regional stability.

To conclude, it is still relevant to highlight ASEAN’s role in the meeting involving these countries to keep reminding those intentional ambitions, that, as stated in the ASEAN Chairperson’s Statement at the last Summit 2020, “not to use threats or force” in resolving problems in the region. When talking about ASEAN and optimizing its influence, Indonesia clearly is still recognized as prioritizing a major role among global major powers.

ASEAN+5 RCEP BENEFITS FOR INDONESIA
President Joko Widodo and Minister of Trade Agus Suparmanto at the signing of the Regional Comprehensive Economic Partnership agreement of the ASEAN Summit from the Bogor Palace, SETNEG/Biro Pers Setpres

Writer: Hendra Manurung (Hendra Manurung is currently pursuing a doctoral degree in international relations at Padjadjaran University, Bandung)

On 15 November 2020, the Regional Comprehensive of Economic Cooperation known as RCEP signed by Indonesia President Joko Widodo. It will cover ASEAN member-countries with its five partner countries, such as Australia, China, Japan, South Korea, and New Zealand. But it is rejected by India. It is expected that ASEAN RCEP will benefit Indonesia’s various export products.

In fact, these various benefits ranging from the increased gross domestic product (GDP), boosting exports, and attracting foreign investments coming to Indonesia and more.

The negotiations, which initially started with 16 countries, ended up being signed by 15 countries, involving 10 ASEAN countries and 5 partner countries, namely China, South Korea, Japan, Australia, and New Zealand. As is known, India withdrew from negotiations in 2019.

RCEP is still open to India, if India is interested in re-joining, as RCEP will remain open to India when it is ready to rejoin as the original negotiating party.

This also strengthens the declaration put forward by the RCEP trade ministers when holding the RCEP Summit Preparation previously on 11 November 2020.

RCEP is still considered as a mega-regional free trade agreement covering Southeast Asia, East Asia, and Oceania.

All countries of RCEP understand the domestic economic challenges India is facing when it withdraws from the RCEP negotiation process last year.

Further, based on Indonesian Fiscal Policy Agency study in 2019, stated that Indonesia could increase GDP by 0.05% during the 2021-2032 period if it participated in RCEP.

However, if Indonesia does not participate in RCEP, then the national GDP might experience a decline of 0.07% during the same period, from 2021 to 2032.

RCEP will also provide welfare gain for Indonesia around US$ 1.52 billion.

Table 1 Indonesia Balance of Trade, Oct. 2019-Oct 2020 (in millions US$)

Period Result Progress
October 2019 US$ 122,4 surplus
November 2019 US$ – 1.396 deficit
December 2019 US$ -78 deficit
January 2020 US$ -636,7 deficit
February 2020 US$ 2.512,8 surplus
March 2020 US$ 715,7 surplus
April 2020 US$ -372,1 deficit
May 2020 US$ 2.015,7 surplus
June 2020 US$ 1.249 surplus
July 2020 US$ 3.238,4 surplus
August 2020 US$ 2.353,4 surplus
September 2020 US$ 2.390,4 surplus
October 2020 (temporarily) US$ 3.606,8 surplus

Source: Badan Pusat Statistik

Table 2 Indonesia’s export and import of non-oil and gas (in millions US$)

Countries Export Import
China US$ 2.860,3 US$ 2.798,1
The United States US$ 1.638,1 US$ 609
Japan US$ 1.064,3 US$ 731,3
India US$ 874,4 –
EU-27 16 billion Euro 10.2 billion Euro
Singapore – US$ 706,5

Source: Badan Pusat Statistik

When compared to free trade agreements initiated by other countries, such as the Trans-Pacific Partnership (TPP), North America Free Trade Agreement (NAFTA), to the EU-27, the incorporation of 15 countries in RCEP is quite significant.

However, RCEP remains a global dynamic in world trade. RCEP without India represents cumulatively 29% of world GDP, 27.1% of world trade, 29.3% of world FDI and 29.6% of the world’s population.

The existence of RCEP should be able to be the best opportunity and opportunity for Indonesian export products to boost exports, attract investment, and increasing the competitiveness of national economic products in the region.

Suppose, this welfare gain can be defined as the surplus that consumers and producers get from a transaction. If from the consumer perspective, welfare gin is obtained when the price that consumers can pay is greater than the factual price in the market, while from the perspective of producers, welfare is obtained if the price they are able to offer to the market is lower than the factual price in the market.

Indonesia has the potential to avoid the trade balance deficit by US$ 491.46 million. Even so, this potential deficit might be balanced by maximizing the surplus and global supply chain needs through the backward linkage and forward linkage aspects.

Moreover, in order to attract foreign investment to Indonesia, Indonesia needs to do lots of homework regarding to national reforming policies and reforming the domestic bureaucracy.

The business and investment climate in Indonesia has the same attractiveness and can even be higher than in other countries.

Apart from the foreign investment side, to get benefits from the trade gain, Indonesia should be aware and more careful in utilizing RCEP as a benchmark for efforts to develop and to improve the national domestic supply chain and increase national productivity.

It is necessary to explore which potential sectors which still need to be facilitated in terms of increasing productivity and trade competitiveness in penetrating international markets in these areas.

There must be serious efforts by the Indonesian government together with all stakeholders so that the domestic business climate in this sector can be improved more efficient and more attractive so that investment from RCEP can be directed to that sector. In fact, Indonesia must also identify carefully which export products are more competitive for trading in the region.

Indonesia should be able to prepare the advantages of export products with high-quality standards and affordable competitive prices that can compete with other countries mostly in accessing the international market continuously.

Those countries that are most ready to implement RCEP, such as China, for example, are countries that already have and implement more trade agreements previously than Indonesia. This is because these countries may have carried out internal reforms first.

Indonesia should anticipate intense competition between countries over the implementation of a regional partnership agreement so that Indonesia is not merely a potential market for various products export partner countries.

In Southeast Asia, Thailand, Vietnam, and Malaysia perhaps are still better prepared than Indonesia. This is because the country has more complex trade agreements and has been implemented effectively to date.

Indonesia is still lagging behind because of the ease of doing business reform. Even though there is now a Job Creation Law, it must be ensured that its implementation is beneficial for all domestic stakeholders before RCEP can be effective after it has been ratified by all countries.

Apart from the need to work hard to realize increased exports, attract investment, and increase economic competitiveness in the region, RCEP is also expected to be able to create higher certainty of business activities in the region to normalize trade and investment flows, especially in the midst of the COVID-19 pandemic.

In the next 50 years, Indonesia needs to prepare a bumper to protect the sustainability of the domestic industry from the negative impact of free trade which is likely to be unfair.

The translation of the RCEP agreement text is targeted for completion within two months before ratification. Previously, it was necessary to carry out a comprehensive impact analysis by the government and the DPR.

A comprehensive agreement such as the RCEP should have consequences for the content of rules that must be adopted in the regulatory framework of the national economy. Obviously, this will have an impact on the narrowing of the government policy space and state sovereignty to protect the interests of the Indonesian people.

All domestic stakeholders must be involved in the decision-making process for the ratification of the RCEP agreement, including small and medium scale entrepreneurs.

Without any clear preparation and blueprint, the resilience of the domestic industry will in fact be battered, while competing with various cheaper imported products.

The bumper is in the form of a non-tariff policy where this effort is common in other countries in the midst of free competition. However, Indonesia needs to be careful and limited in implementing it so as not to lead to trade disputes with other countries.

Another bumper is related to the precautionary principle and the need for stages in ratifying the RCEP. Not all points of the agreement need to be ratified if they are deemed to be detrimental to the domestic industry. Thus, the ratification process must involve many related parties and be discussed openly.

Trade expansion between countries can only be done if a country has its export products that are ready to be marketed. Currently, around 72% of exports in the global market are manufactured products, while Indonesian exports still rely on commodities such as palm oil and coal.

If Indonesia has not been able to shift to the manufacturing sector, it is certain that Indonesia will only be flooded with imported products or simply become a producer of raw material sources and not shift from traditional markets.

The challenges are even more difficult amid the global pandemic which has hit various domestic industrial sectors, especially manufacturing.

To conclude, the advantage obtained through joining RCEP is how Indonesian export products are able to drive themselves to be more productive and competitive. The government and all business actors need to be more aggressive and quick to make structural adjustments in optimally utilizing RCEP opportunities.

Indonesia – EAEU relations: developing trade and economic cooperation

Hendra Manurung,  doctoral student, international relations, Padjadjaran University; Arry Bainus, professor, international relations, Padjadjaran University. Published as a submission to the MIWI Institute. Bandung, 14 September 2020.

Indonesia strengthens economic cooperation with countries in Eastern Europe and Central Asia which are members of the Eurasian Economic Union (EAEU), through the process of establishing a Free Trade Agreement (FTA) between Indonesia and EAEU. The path to this process was highlighted at the inaugural meeting between the Indonesian delegation and the Eurasian Economic Commission (EEC), the executive body of the EAEU (Indonesia Ministry of Foreign Affairs, July 10, 2020). The meeting was a follow-up to Indonesia’s proposal to form a Joint Feasibility Group (JFG) in the framework of the formation of the RI-EAEU FTA which was approved by the EAEU Trade Ministers on May 18, 2020.

East Europe and Central Asia, often also called Eurasia is a prospective market for leading Indonesian products. It can be done through the process of deepening trade and economic cooperation with Indonesian traditional markets, as well as seeking to open new markets for Indonesian products in prospective countries. The Eurasian Economic Union is an international organization for regional economic integration. It has an international legal personality and is established by the Treaty on the Eurasian Economic Union. It provides for free movement of goods, services, capital, and labor, pursues coordinated, harmonized, and single policy in the sectors determined by the Treaty and international agreements within the Union.

Further, the two parties discussed a number of issues in the Terms of Reference (TOR) of the Joint Feasibility Study Group (JFSG), including Objectives, Scope, JFSG Methodology, Timeline, and Publication of Terms of Reference and Joint Reports. The meeting agreed to review various inputs, exchange drafts, including a meeting plan to finalize the terms of reference.

The inaugural meeting was a step forward since the RI-EAEU FTA plan was initiated in 2017. The formation of the RI-EAEU FTA will encourage the expansion of Indonesia’s export market and increase Indonesia’s trade cooperation with EAEU. EAEU consists of Russia, Kazakhstan, Belarus, Kyrgyzstan and Armenia, which are rich in natural resources, agricultural products, and have technological advantages with large market potential, namely a population of more than 180 million, and GDP according to PPP of US$ 4.4 trillion or GDP per capita US$ 24,800.

In the international market, it is believed, Indonesia has a huge asset to develop a quality and sustainable economy. The markets and productive population of Indonesia reached about 150 million people will optimize the bargaining power of its own and will continue to be capitalized in developing economic cooperation with other countries for mutual benefit.

Indonesia’s economic diplomacy will continue to be encouraged and oversee Indonesia’s outbound investment policies abroad for the expansion and diversification of the Indonesian product market, as well as increasing the competitiveness of Indonesia’s industry at the international level and in the Asia Pacific region. At least, there are 285 Outbound Investment Indonesia today with a value of US$ 14.30 billion

In 2020, a number of economic cooperation negotiations will be a priority, such as the ratification of the IA-CEPA; ratification of the I-EFTA CEPA; RCEP signing; intensification of PTA / FTA / CEPA negotiations with African, South and Central Asian countries as well Pacific; exploring the FTA with the Eurasian Economic Union (EAEU), and encourage the implementation of economic agreements that have been signed with partner countries.

Economic diplomacy will also be continuously focused on enabling quality foreign investment to support Indonesia’s sustainable national development priorities, infrastructure development, human resource development, strengthening downstream industries, and the development of the outer, frontier islands, including the Natuna Islands.

Asian political stability and its dynamics of economic growth is a prospect for Russia to be engaged further. It is related to how Russia re-establishes political and economic influence progressively in the region in maintaining her eastward-focused integration drive, including building a southeastwards bridge to China and the Asia Pacific. In this context, therefore, the cooperative nature of Russian policies is the condition sine qua non for the establishment of the Eurasian Economic Union in 2015. Russia is perceived to consistently contribute its role as a unifier of the Commonwealth of Independent States (CIS).

Roman A. Romanov, representative of the Ministry of Foreign Affairs of the Russian Federation stated that, the progress of cooperation between the two countries especially in the economic, security, military, humanitarian, and cultural. During 2019, Indonesia and Russia have reached trade amounted to US$ 2.45 M, and is expected to increase after the signing of a strategic partnership (Indonesia Ministry of Foreign Affairs, Aug. 25, 2020).

Meanwhile, on the 14th ASEM Foreign Ministerial meeting in Madrid, Spain, Indonesian Foreign Minister, Retno Marsudi and Kazakhstan’s Foreign Minister, Mukhtar Tileuberdi met and discussing the efforts of the two countries in exploring opportunities for economic cooperation (Indonesia Ministry of Foreign Affairs, Dec. 17, 2019). Indonesia and Kazakhstan recorded a significant increase in trade value from US$ 60.3 million in 2018 to US$ 317.85 million in the January-October 2019 period. However, there is still a lot of potential for cooperation between the two countries that need to be explored, including in the banking, halal industry, agriculture, energy, and strategic industry.

Further, Jakarta also hoped that Astana would render its support as a member of the initiator of the Eurasian Economic Union (EAEU) towards the initiative of forming the Free Trade Agreement Indonesia – EAEU. Suppose that the cooperation within the EAEU framework is expected to further advance the regional economy, especially in Europe and Asia continent. Also, Indonesia expressed its wish for both countries to further explore the potentials of cooperation at the 2nd Joint Commission on Economic Cooperation. The Joint Commission is expected to open new frontiers of economic cooperation, especially in increasing business-to-business contact.

Kazakhstan also requested Indonesia to elevate its participation in the Islamic Organization for Food Security to a full membership. They also invited Indonesia to attend the Conference on Interaction and Confidence Building Measures (CBM) in Asia in 2020, in which Kazakhstan would hold chairmanship in 2020-2022.

Indonesia together with the Eurasian Economic Commission (EEC) signed a Memorandum of Cooperation in the framework of enhanced cooperation between Indonesia EAEU (Eurasian Economic Union). The signing was done by the Minister for Trade, Enggartiasto Lukita, and the Minister for Integration and Macroeconomics of the EEC, Sergey Glaziev, on the sidelines of the Trade Expo Indonesia in ICE BSD City, Tangerang (Indonesia Foreign Ministry, Oct. 18, 2019). The meeting is the implementation of President Joko Widodo in accelerating export done through the opening of new markets for Indonesian products, and EAEU countries are non-traditional (Indonesia Ministry of Trade, Oct. 18, 2019).

In Jakarta, on February 14, 2019, Indonesia pioneered the beginning of trade talks and economic cooperation with five Eurasian countries who are members of the Eurasian Economic Union (EAEU).

Indonesia was chosen to host the 2020 Parliamentary Meeting of the Eurasian Countries or the 5th Meeting of Speakers of the Eurasia Countries’ Parliaments / MSEAP. Indonesia in Southeast Asia has a very strategic position. That is why the Eurasian countries specifically asked Indonesia to host it in 2020.

Furthermore, the countries of the Eurasian region are countries that have prospectus relations with Indonesia from the side of trade as well as the other side of politics and culture.

In the midst of the global pandemic, for Indonesia, Eurasia can be an entry point in conducting and developing trade diplomacy. For example, about palm oil, there is currently a negative campaign on palm oil initiated by several European countries that are members of the European Union.

Indonesia and the EAEU have agreed to sign a memorandum of cooperation (MoC) to enhance economic cooperation through bilateral trade and foreign investment. The cooperation is mostly focused on trade and investment. Memorandum of Cooperation is a form of agreement to establish a Joint Working Group to discuss ways and means to increase trade and investment between the two parties. Indonesian Minister of Trade, Enggartiasto Lukita, signed the MoC with the Minister for Integration and Macroeconomics of the Eurasian Economic Commission (EEC) Tatyana D. Valovaya.

At this meeting, the two ministers agreed to increase bilateral cooperation regarding the establishment of a joint working group. Therefore, these ministers instructed the technical officials to immediately finalize the MoC. This meeting is also a follow-up to the previous meeting which took place in December 2017. Previously, EEC had also signed a similar MoC with several ASEAN countries such as Singapore, Thailand, Vietnam, and Cambodia. EEC is a unitary government body for economic integration in the Eurasia region (EAEU) which was formed in 2014. EAEU has members from countries in the Eastern European and Central Asian regions such as the Russian Federation, the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, and the Republic of Kyrgystan.

The trade value between Indonesia and EAEU in 2017 reached US$ 2.79 billion. In the same year, also, Indonesia’s exports to the EAEU amounted to US$ 1.25 billion. Indonesia’s main export products are palm oil (US$ 386.75 million), machine tools (US$ 178.16 million), coffee (US$ 78.97 million), palm seeds (US$ 77.22 million), and margarine (US$ 50.92 million).

Meanwhile, Indonesia’s import value from EAEU in 2017 was US$ 1.54 billion with the main products including semi-finished steel (US$ 419.18 million), mineral and chemical fertilizers (US$ 322.45 million), wheat and merlin (US$ 246.16 million), and aluminum (US$ 82.89 million).

It is hoped that the formation of a joint working group will encourage trade and investment relations between Indonesia and the EEC, the elimination of trade barriers, and collaboration in various sectors which are mutual interests of both parties.

Indonesia also realized in achieving high economic growth and the quality is now facing the challenge of protectionism, narrow nationalism, and a variety of false populism campaigns.

Indonesia considers that this negative trend must be transformed into positive energy. The rivalry is important to turn into cooperation and the trust deficit must be replaced by a strategic trust.

In the midst of increasing protectionist attitudes, Indonesia will build a coalition to continue to promote the paradigm of mutual benefit, justice, and not zero-sum. The keyword is collaboration. The collaboration will create opportunities, create new centers of economic growth, and can find solutions to global challenges.

It is also important for Indonesia and the countries that are members of Eurasia to uphold applicable international law as high as possible, especially in realizing world peace and global stability, especially in the Asia Pacific region.

Source: https://miwi-institut.de/archives/572

EMPOWERING INDONESIA’S DEFENSE DIPLOMACY IN ASIA PACIFIC
Presiden Rusia Vladimir Putin dan Presiden Indonesia Susilo Bambang Yudhoyono (https://en.kremlin.ru/)

Writer: Hendra Manurung (Hendra Manurung is currently pursuing a doctoral degree in international relations at Padjadjaran University, Bandung)

Indonesian Defense Minister Prabowo Subianto visited eight countries since being officially inaugurated by President Joko Widodo on 20 October 2019. On 23 October 2019, he visited Malaysia, Thailand, the Philippines, Turkey, China, Japan, France, and finally Russia. Prabowo carried out a number of missions. It began with the release of Indonesian citizens who were held hostage by the Abu Sayyaf group in the Philippines to increasing strategic cooperation in the field of bilateral defense.

However, the intensity of Prabowo’s visit invited criticism from several groups such as DPR members and defense military observers but received support from President Joko Widodo. The President emphasized that Prabowo’s working visit was carried out in the context of carrying out and intensify Indonesia’s defense diplomacy abroad.

One of the objectives of the Minister of Defense is to strengthen and modernize the main tools of the Indonesian weaponry system, by exploring the possibility of procurement from defense equipment producing countries that cannot yet be fulfilled by the domestic defense industry as well as offering Indonesian weapons system products that are already capable of being produced by the domestic defense industry, such PT. Pindad Bandung and PT PAL Surabaya to other consumer countries.

Indonesia Defense Diplomacy

Efforts to seize and defend Indonesian independence involve all components of the nation in various ways. For example, the army and the people take up arms on the battlefield, and diplomats are fighting at the diplomatic negotiating table with diplomats from other countries, for example in the General Offensive on 1 March 1949.

This Indonesian heroic military action in reclaiming Dutch-controlled Jogjakarta was also intended to show the international community that Indonesia and the TNI still existed. The success of the Indonesian military attack then became ammunition for diplomats to thrill the negotiating table.

As a result, the Netherlands recognized Indonesia’s sovereignty in a Round Table Conference on 27 December 1949. This is because diplomacy was originally intended to eliminate conflict, ease tensions, avoid war, and end the war (Simamora, Opportunities, and Challenges of Defense Diplomacy: 2013).

Indonesia also had the experience of having a formidable defense weaponry system during the struggle against Dutch colonialism and after proclaiming independence on August 17, 1945. Among them, the ownership of various types of modern combat aircraft at that time, such as the TU-16-KS bomber, the Mig-15 fighter plane / 17/19/21, Ilyuhsin, and attack helicopters. Also, the Indonesian warship, the destroyer class KRI Irian, which became the largest ship in the Southeast Asia region, were all purchased from the Soviet Union (currently is the Russian Federation). The defense equipment was used by the Indonesian armed forces for propaganda to reclaim West Irian from the hands of the Dutch, 1962 to 1963.

The superiority of Indonesian defense equipment in the Asia Pacific region is used optimally as a major support for diplomacy negotiation against the arbitrariness of Western countries against the territory of the country that was once colonized.

However, apart from the shrewdness of President Soekarno who took advantage of his closeness to the Soviet Union as a bargaining power to garner support from the United States, diplomats used it well until West Irian was finally captured. Thus, defense diplomacy has been carried out by the country’s leaders since the beginning of independence and during the war after independence.

Defense diplomacy is actually a new vocabulary in the world of international relations. The term defense diplomacy first appeared in the UK Department of Defense’s Strategic Defense Review which was published in 1998. The main focus of SDR’s version of defense diplomacy aimed at the countries of the former Soviet Union and former members of the Warsaw Pact is to carry out reforms in the security sector and conflict prevention. For this reason, as explained by Cottey and Forster (in Sulayman: 2016).

Defense diplomacy can be defined as the use of armed forces and related infrastructure during peacetime as a main supporting tool to pursue the main objectives of foreign policy and national defense.

Obviously, Article 1 Paragraph 1 of Law Number 3 of 2002 concerning State Defense explicitly states that national defense is all efforts to defend the sovereignty of the Republic of Indonesia.

The post-Indonesian proclamation, as the largest archipelagic country in the world that has a commitment and concern for the implementation of international world order and lasting peace, Indonesia certainly avoids using any hard power in facing threats from other countries. Indonesia places diplomacy as the first line of defense. This is also parallel with Indonesia’s defense doctrine which is defensive, not offensive.

However, defense diplomacy to maintain and achieve national interest cannot be separated from how much national power one has. One of the nine national powers, referring to Morgenthau, is military capabilities. Mearsheimer said the military is the actual power for a country.

Therefore, military power needs to be increased in attack and defense capacity in line with the need to strengthen defense diplomacy in international relations. Indonesia was able to carry out high-profile diplomacy which was very calculated during the Old Order era (1945-1966), one of which was inseparable from the power of defense equipment it had through the support and military assistance of the Soviet Union.

In the early days of reform after the fall of the New Order on 20 May 1998, the condition of the national defense equipment was appalling. At that time, Indonesia could not maintain and modernize defense equipment due to the Washington D.C embargo decision which was lifted in 2005. For this reason, the government is determined to strengthen our defense equipment. One of them is the minimum essential forces (MEF) which are targeted to be achieved 100 percent by 2024.

Indonesian defense diplomacy mission of the current defense minister showed his goodwill to many countries, one of which is to strengthen bilateral defense relations and cooperation strategically. This includes enhancing bilateral relations through defense cooperation and boosting military capacity to contribute to peace mission operations in countries facing conflict.

Various shortcomings in the procurement of defense equipment in the past are valuable lessons not to be repeated, for example, the dependence on defense equipment in one particular country.

The eight countries visited can illustrate that the Indonesian government is building strategic defense cooperation, including efforts to increase the modernization of defense equipment. Everything is done through the procurement of modern, efficient, transparent, and scalable defense equipment. However, it is also offered for domestic products to be used by other countries to support accelerate the growth of the domestic defense industry.

In the early days of reform after the fall of the New Order on 20 May 1998, the condition of the national defense equipment was appalling. At that time, Indonesia could not maintain and modernize defense equipment due to the US embargo which was lifted in 2005. For this reason, the government is determined to strengthen our defense equipment. One of them is the minimum essential forces (MEF) which are targeted to be achieved 100 percent by 2024.

In the midst of the United States and China rivalries in the South China Sea region from 2017 to the present time, the Indonesian defense diplomacy mission done by Prabowo showed his goodwill to many countries, one of which is to strengthen defense relations positively. This includes enhancing bilateral relations through defense cooperation and increasing military capacity to contribute to peace mission operations in countries facing conflict.

Various shortcomings in the procurement of defense equipment in the past are valuable lessons not to be repeated, for example, the country dependence on defense equipment in one particular country.

The eight countries visited can illustrate that the Indonesian government is building strategic defense cooperation, including efforts to increase the modernization of defense equipment. Everything is done through the procurement of modern, efficient, transparent, and scalable defense equipment. However, it is also offered for domestic products to be used by other countries to help accelerate the growth of the domestic defense industry.

Intensive care and how to start a road map towards defense industry independence must indeed be initiated and implemented by all Indonesian stakeholders of the national defense system. This is confirmed to be in line with the presidential instruction to reduce imports and dependence on defense equipment from major powers in the Asia Pacific region.

However, preferably, for defense equipment products which the domestic defense industry cannot yet provide, it is better if the purchasing mechanism from abroad should be pursued in the interest of a strong national defense and not easily underestimated.

Therefore, in the procurement of defense equipment, both from within and outside the country, Indonesia must prioritize four principles or the so-called politics of procurement of the main tools of the national weapon system, namely: efficiency, geopolitics, geo-economy, geo-strategy, budget efficiency, and transfer of military weaponry technology, and the ability to sell Indonesian weaponry to various countries.

INDONESIA – UK COOPERATION POST BREXIT: CHALLENGES & OPPORTUNITIES

 

Source: https://thejakartapost.com/

Writer: Hendra Manurung (Hendra Manurung is currently pursuing a doctoral degree in international relations at Padjadjaran University, Bandung)

Brexit has made Britain will be more open to the world and independent, particularly in implementing its foreign policy from London, and mostly in strengthening closer relations with other countries, including with Indonesia continuously.

Britain’s exit from the European Union made it more globalized. The global UK means new relations with the European Union and closer bilateral relations with other countries, including Indonesia

Post-Brexit in June 2016, the UK is one of the important trading partners in Europe and a major foreign investor in Indonesia.

Brexit offers enormous economic opportunities for Indonesia after officially left the European Union on 31 January 2020, after forty-seven years joining since 1973.

It was after being delayed four times. The decision was very historic for the government of British Prime Minister Boris Johnson due to his success in realizing the British people’s decision in the Brexit referendum on 23 June 2016.

It reflects the will of the majority of UK citizens and is bound to create a new economic and political order in the UK and Europe.

Previously, the European Parliament approved the agreement to withdraw Britain from the European Union (Brexit) on 31 January 2020. However, the parliament warned that Britain should not make too many demands related to negotiations on economic affairs on the grounds of maintaining good relations in the future.

Despite concerns, there will be economic turmoil in Europe during the transition period for Britain’s exit from the European Union at the end of 2020. During the transition period, Britain and other EU countries will continue to apply the same business rules to try to negotiate a broader trade agreement.

England is an important priority for strengthening Indonesia’s economic diplomacy in the European region. The two countries agreed to increase economic cooperation in potential fields such as trade and investment, creative industries including digital technology in the financial sector mostly financial technology, energy, especially renewable energy, education and human resource development, maritime, and others.

This was stated during the visit of the British Minister for the Asia Pacific, Heather Wheeler to Jakarta in January 2020, which is seen as a reaffirmation of both commitment to partnership and friendly relations between Indonesia and the UK (Kemlu.go.id, 14/1/2020). Apart from bilateral issues, efforts to strengthen bilateral cooperation of the two countries were also discussed on global and regional issues of mutual interest.

It is a very good signal to boost the intensity of mutual beneficial cooperation in both countries in various fields in order to achieve economic growth and people’s welfare. Minister Heather Wheeler’s visit to Indonesia is the first time since taking office since July 2019.

This is important in relation to how to improve bilateral trade performance, including investment and education through the Trade Review mechanism. This is a concrete step in preparing comprehensive economic cooperation between both countries after Brexit in June 2016, so that it can provide greater economic benefits for the two countries.

Post-Brexit, Britain will no longer be bound by European Union rules in developing closer relations with other countries. Thus, the UK is able to more freely increase the volume of trade with Indonesia from both directions.

After Brexit, Britain can strengthen economic cooperation with Indonesia, reduce trade barriers such as tariffs, and so on, and expand market access between the two countries.

For twenty years Britain was the largest importer of Indonesian timber among the European Union countries.

Post-Brexit, the UK will continue to import according to the FLEG-T VPA scheme or an agreement between the European Union and Indonesia regarding the sale of sustainable timber in accordance with the regulations of the buying European country.

Britain and Indonesia are already doing business on WTO terms, so trade relations between the two countries remain the same even after Brexit. The two countries have signed an agreement similar to the EU treaty on legal timber, to ensure sustainability. This was followed by launching a Joint Trade Review, to find out where future opportunities together lie.

Brexit has also provided an opportunity for Britain to open up again to immigrants from other countries. Recently the UK implemented a policy that allows international students to live and work for two years after completing their studies in Western European countries.

The positive impact of Brexit will benefit Indonesia in the trade sector. This is because the export opportunities for business actors are increasingly open, especially CPO commodities to the UK and they no longer depend on the European Union.

The negative impact is that the economy of the Blue Continent will be depressed. Under these conditions, it will automatically have an impact on Indonesia because the European Union’s demand for domestic products will decrease.

Indonesia perceives that in this Brexit situation, of course, Great Britain must rebuild all its trade relations with many countries again, because previously it could be in unity with the European Union. So this is also an opportunity and opportunity for Indonesia or other countries that have traditionally traded with the European Union.

Apart from Brexit, there is some geopolitics development in the world which might also raise concerns in the Indonesian national economy. Among them are the outbreak of COVID-19 throughout the world, the trade war between the US and China, COVID-19 pandemic and the discovery of the vaccine, decline of global multilateralism, and the risk of US geopolitical competition with its allies with Iran, Syria, and Russia in the Middle East. Thus, Indonesia and Britain should always be aware of these dynamics of world economic growth.

The spread of the Coronavirus has a more dangerous impact on the economy than Britain’s departure from the European Union or Brexit. Up to the present time, still, there has been no definite effort to control the outbreak of viruses originating from Wuhan, China at the end of December 2019.

Obviously, it is clear that there will be real differences indirect positive trade relations between Indonesia and the UK, compared to trade relations that tend to be conventional as has been done together with the European Union.

“No country is able to overcome this crisis alone. In this connection, we have no other option but to count on the WHO to be a platform of cooperation among countries,” stated by Retno L.P Marsudi, Indonesian Foreign Minister at the Video Conference Ministerial Meeting for Alliance for Multilateralism.

WEBINAR EU27: Uni Eropa Pasca Brexit

KOMUNITAS INDONESIA UNTUK KAJIAN EROPA (KIKE) MENGUNDANG ANDA

Pada Webinar Nasional
“EU 27 : UNI EROPA PASCA BREXIT”

Rabu-Kamis,18 – 19 November 2020
Pukul 09:00 – 16.00 WIB
Via zoom

Pembicara Utama :
H.E. Vincent Piket
(Duta Besar Uni Eropa untuk Indonesia & Brunei Darussalam) I
Head of EU Delegation
“EU Response toward Brexit”

Aswin Ariyanto Azis, S.IP., M.DevSt.
Pengkaji Studi Kawasan Eropa
Ketua Prodi Hubungan Internasional Universitas Brawijaya
“Brexit dari Kacamata Non-European (Asia ; ASEAN)”

Muhadi Sugiono, M.A.
Ketua Umum KIKE
“EU27 Pasca Brexit: Overview”

Webinar terdiri dari seminar pembuka dan 6 panel seminar pendukung yang menghadirkan 20 Akademisi dengan sub-tema sebagai berikut:
– Brexit dan Eksistensi Uni Eropa
– Transformasi Governance Uni Eropa
– Hubungan Internasional Uni Eropa

Forum terbuka untuk umum.
Segera registrasi melalui : http://bit.ly/WebinarEU27

Sampai bertemu di webinar!

Instagram Kami: kike_ices

Dear Colleagues and Friends,

Indonesian Community for European Studies (ICES)
Invites you to a National Webinar entitled:

“EU27: European Union Post Brexit”

Which will be held on
Wednesday-Thursday, November 18th-19th 2020
at 08.30 am – 04.00 pm (Jakarta Time)
via Zoom

Our Main Speaker:
H.E. Vincent Piket
EU Ambassador to Indonesia & Brunei Darussalam
Head of EU Delegation
“EU Response toward Brexit”

Aswin Ariyanto Azis, S.IP., M.DevSt.
Head of International Relations Department University of Brawijaya
“Brexit from Non-European Perspectives”

Muhadi Sugiono, M.A.
Chairman of ICES
“EU 27 After Brexit Overview”

There’re also 6 panels with 20 speakers supporting various sub-themes in European Studies, including:
– Brexit and the Existence of the European Union
– European Union Governance Transformation
– European Union International Relations

This event is open to the public.
Register now through this link: http://bit.ly/WebinarEU27

We’re looking forward to your participation.

Instagram: kike_ices

PURSUING SUSTAINABLE COOPERATION: INDONESIA – EFTA CEPA (IE-CEPA)

 

https://www.gatra.com/

Writer: Hendra Manurung (Hendra Manurung is currently pursuing a doctoral degree in international relations at Padjadjaran University, Bandung)

The European Free Trade Association or EFTA is an inter-governmental organization established to promote free trade and economic integration for the benefit of its member countries (Switzerland, Norway, Liechtenstein, and Iceland) and their partner countries.

Indonesia and the EFTA Comprehensive Economic Partnership Agreement (IE-CEPA) is a comprehensive trade agreement due to both markets access inclusiveness, trade and investment facilitation, and capacity building cooperation.

IE-CEPA signed on 16 December 2018 in Jakarta. It is expected that through the Comprehensive Economic Partnership Agreement signed by Indonesia and the European Free Trade Association will bring many mutual benefits for both sides in the future.

The IE-CEPA agreement itself suppose will boost market access to EFTA for fishery products, industry such as textiles, furniture, bicycles, electronics, and auto tires, and agriculture including coffee and palm oil.

The Ministry of Trade of Indonesia also held a Roadshow for the Indonesian Trade Agreement with EFTA countries related to the Comprehensive Economic Partnership Agreement that was completed in Makassar, South Sulawesi (http://ditjenppi.kemendag.go.id/, 26/9/2019).

For Indonesia, the European Free Trade Association (EFTA) considered as the 23rd group of non-oil and gas export destination countries and the 25th largest country of origin for non-oil and gas imports.

After going through nine complex stages that took almost 8 years, began in January 2011 to Nov. 23, 2018, finally conclude. The IE-CEPA negotiations were finally declared substantively completed by the negotiators through Joint Announcement at a meeting in Denpasar, Bali from October 29 to November 1, 2018.

Thereafter, with the signing of the IE-CEPA, a new milestone in bilateral relations between Indonesia and the EFTA countries has begun. This is due to a number of benefits that Indonesia and EFTA will get, through the IE-CEPA agreement which was declared in Geneva, Switzerland on 23 November 2018.

The IE-CEPA Agreement benefits for Indonesia are enormous due to Indonesia’s market access expansion to EFTA countries and accelerating the competitiveness quality of Indonesian products.

The cooperation between the five countries, involving Indonesia, Switzerland, Iceland, Norway, and Liechtenstein will not harm each other. In fact, there are many benefits that can be obtained, particularly with the zero-tariff policy which is applied to almost 99 percent of Indonesian products exports to EFTA countries.

The Indonesian Ministry of Foreign Affairs virtually is intensifying discussions on the ratification of the Indonesian Agreement – the European Free Trade Association (EFTA) Comprehensive Economic Partnership Agreement (IE-CEPA) in the Tourism Services Sector in October 22, 2020 (kemlu.go.id, 27 Oct. 2020).

In the goods sector, Indonesia benefits from almost 99 percent zero tariffs. Even so, this was done in stages with various deadlines.

In detail, there were also tariff eliminations on 6,333 tariff posts or about 90 percent of the total Norwegian tariff posts. This figure covers 99.75 percent of the value of Norwegian imports from Indonesia.

Tariff elimination also occurred at 8,100 tariff posts in Iceland or around 94.28 percent of the total existing tariff posts. This figure covers 99.94 percent of Iceland’s import value from Indonesia.

There is also the elimination of tariffs on 7,042 tariff posts in Switzerland or about 81.74 percent. This figure covers 99.65 percent of the Swiss import value from Indonesia.

Indonesian export products that receive preferential rates include palm oil, fish, gold, footwear, coffee, toys, and textiles. There is also furniture, electrical equipment, machinery, bicycles, and tires.

Profits in the service trade sector also vary. Starting from the cross border where Indonesian citizens will get information and education from a distance. Indonesia can also increase the growth of e-commerce in the country and for the needs of exports abroad by optimally utilizing digital platforms.

On the consumption abroad section, the Indonesian tourism sector benefits from an increase in the number of tourists from EFTA member countries. Not to mention, the increase in capital flows from EFTA member countries to Indonesia will boost the pace of infrastructure development.

For the commercial presence, it will be increasing capacity building for generating Indonesian human resources quality through the presence of EFTA experts. An increase in the number of Indonesian workers also will be sent to EFTA countries.

Indonesian workforce certification will also be recognized by EFTA countries. Open market access for workers openly is accessible in the category of Intra Corporate Trainee, Trainee, Contract Service Supplier, Independent Professional, and Young Professional.

Indonesian product opportunities in the EFTA market are also promising and challenging. The results of the analysis of Indonesia’s potential exports with the EFTA countries (ITC, 2018) highlighted that these products with the greatest export potential from Indonesia to Switzerland are jewelry from precious metals, coffee, and footwear.

Additionally, Indonesia has the highest supply capacity for palm oil. On the other hand, the product with the strongest potential demand in Switzerland is immunology.

Products with the greatest export potential from Indonesia to Norway are nickel matte, sports footwear, and coffee. Indonesia also has the highest supply capacity for seats of cane, osier & similar products, while the product with the strongest potential demand in Norway is nickel matte.

Products with the greatest export potential from Indonesia to Iceland are shrimp, crude coconut oil, and coffee. Indonesia also has the highest supply capacity for palm oil & fractions, while motorized vehicles to transport people are the product with the strongest potential demand in Iceland.

On the investment side, this cooperation is profitable. IE-CEPA is expected to create an open, stable, and predictable business climate for investors. Increased investment will open wider opportunities for the business world, creating jobs that will improve people’s social welfare gradually.

Investments from developed countries will also have a positive impact in terms of technology and knowledge transfer, so as to increase the competitiveness of domestic commodity products and services in the international market.

The investment sectors offered by Indonesia to EFTA through IE-CEPA include fisheries, agriculture, and manufacturing of food products, textiles, chemicals, pharmaceuticals, and domestic renewable energy development.

For consumers, the elimination of these tariffs will certainly make the price of goods cheaper and of higher quality. Product choices are increasingly diverse.

Moreover, domestic business actors will also benefit more from the import duties for imports of capital goods and raw materials.

Trade facilitation commitments are also included in the IE-CEPA agreement, which will make trade regulations and customs procedures simpler and more transparent.

To conclude, with the lower prices of domestic raw materials, production costs can be reduced optimally, thereby increasing the competitiveness of various Indonesian exporting products and services abroad. (Hendra Manurung is currently pursuing a doctoral in international relations at Padjadjaran University, Bandung)

INDONESIA – VISEGRAD COUNTRIES ECONOMIC COOPERATION

Writer: Hendra Manurung (Hendra Manurung is currently pursuing a doctoral degree in international relations at Padjadjaran University, Bandung)

https://www.dw.com/
https://www.dw.com/

Indonesia attempted to boost the potential for cooperation with four Visegrad countries on 8 October 2019. The Visegrád group which is called the Visegrád Four or V4 is a sub-regional organization of Central Europe which consists of four countries, namely Czech, Hungary, Poland, and Slovakia.

The Visegrad countries group cooperation began on 15 February 1991. The V4 group is substantially formed to further strengthen economic and political integration within the European Union.

Vice Indonesia Foreign Minister, Fachir stated at the 2019 Indonesia-Visegrad Group Business Forum in Serpong, 17 October 2019, in the sidelines of the 2019 Trade Expo Indonesia: “Strong relationship among the Indonesian and V4 business actors will affirm Indonesia’s existence in the region that is deemed strategic as a trading hub that connects West Europe, Central Europe, and East Europe.” (https://kemlu.go.id/).

Business forum activities are one of the priority programs of President Joko Widodo’s vision to further strengthen economic diplomacy.

The economic interaction between Indonesia and the Visegrád region so far is still very limited, even though with an average economic growth of above 4 percent, the countries in this region have great potential for cooperation.

The prospect of cooperation with Visegrád countries is considered to be more promising with their rapid economic growth at an average of 4.1 percent, far above the average economic growth of the European Union (EU) which is approximately 2 percent.

The combined economic size of the V4 countries is equivalent to that of the 5th largest economy in Europe, and through the Visegrád Group, these four countries have an increasingly prominent bargaining position within the EU.

The magnitude of the economic potential of Central Europe has not been fully explored by Indonesia. For this reason, the Indonesia-Visegrád Business Forum will be an excellent opportunity for Indonesia to learn about and take advantage of opportunities for economic cooperation in the four countries, as well as to find solutions to some of the challenges it faces.

However, both sides keep optimistic and positively regarding the value of exports and imports between Indonesia and the V4 countries that accumulatively kept increasing during the last five years (2014-2019), with bilateral trade volume reaching US$ 1 billion in 2018.

 

In mid of October 2019, the business forum held and attended by 55 Indonesian companies and 48 companies from Visegrad countries which emphasize several elements that could be synergized continuously, namely technological advances, labor, and market size.

The business forum activities were then filled with business matching events between Indonesian entrepreneurs and V4 countries, most of who are engaged in food, apparel,  assembly, information technology, pharmaceuticals, human resources, energy, and infrastructure.

It can be done through increasing Indonesian manufactured products export. The volume of trade that has been achieved between Indonesia and the four Visegrád countries is equal to US$ 1 billion US dollars in 2018 (Antaranews.com, 8/10/2020).

Suppose Indonesian entrepreneurs and V4 countries’ strong partnership will further strengthen Indonesia’s foothold in the European region. Visegrad is considered strategic as a trade center hub connecting Western Europe, Central Europe, and Eastern Europe.

The Indonesian government also encourages the labor and technology services sector to be developed in economic cooperation with Visegrad countries.

This relation also aims to enhance cooperation in the sector indicated by the signing of six memorandums of understanding (MoU) by the Indonesian company and its partners from Visegrad, for the provision of professional and skilled labor on the sidelines of the Business Forum Indonesia-Visegrad in 2019.

Increased sector cooperation was represented by the signing of six memorandums of understanding (MoU) by Indonesian companies and their partners from Visegrad, to provide a professional and skilled workforce.

At the signing of the MoU, everything was about human resources related to work services due to Visegrad countries necessary.

As a group whose economy is driven by the industrial sector, including the automotive and shipbuilding, the four Visegrad countries, especially Hungary and Poland which had been employing workers from Indonesia.

The number of Indonesian workers, so far, is still small, only reaching hundreds of people. However, Indonesian workers are considered to have advantages over a number of workers who come from other ASEAN countries.

In general, Indonesian workers are considered to have a good character who is more loyal and professional, and a number of companies that employ them in Poland and Hungary are more comfortable with the presence of Indonesian workers in their countries.

Workshop Penyusunan Publikasi Uni Eropa Pasca Brexit
Ilustrasi cover buku
Ilustrasi cover buku

Keluarnya Inggris dari Uni Eropa masih menjadi kajian yang menarik untuk dianalisa bersama. Terdapat berbagai aspek yang perlu dievaluasi atau bahkan diprediksi untuk melihat masa depan kawasan ini dengan Uni Eropa sebagai aktor suprastruktural yang mengelola 27 negara anggotanya.
Oleh karena itu, pada hari Selasa, 12 Mei 2020 yang lalu, diselenggarakan Workshop untuk merancang publikasi ilmiah yang dapat berkontribusi pada kajian Uni Eropa. Workshop dengan tema ‘Peluang dan Tantangan Uni Eropa Pasca Brexit’ ini dilaksanakan melalui media daring. Kegiatan ini berhasil menghadirkan 21 peserta berasal dari berbagai latar belakang profesi dan institusi.

Dalam sambutan pembukaannya, Ketua Umum KIKE, Muhadi Sugiono berterimakasih atas komitmen para akademisi dan praktisi dalam menyusun publikasi ilmiah ini. Karya ilmiah ini diharapkan tidak hanya dapat menjadi luaran pribadi, namun juga dapat menjadi referensi buku ajar pada studi Kawasan Eropa di berbagai universitas di Indonesia. Tersebarnya karya ilmiah di kalangan praktisi dan khalayak umum juga akan menjadi prestasi sendiri dimana itu berarti kajian Eropa perlahan mendapat tempat dan perhatian di masyarakat. Kesadaran terhadap pentingnya Kajian ini diharapkan dapat tumbuh dan mewarnai kajian-kajian lain yang telah ada sebelumnya.
Workshop ini terbagi menjadi beberapa sesi. Sesi pertama berupa pemaparan draft tulisan dari masing-masing peserta. Selanjutnya para dewan pakar KIKE diberikan kesempatan untuk memberikan masukan atas presentasi tersebut. Hendra Manurung selaku ketua Dewan Pengawas dan Muhadi Sugiono secara bergantian memberikan masukan spesifik bagi peningkatan kualitas tulisan. Di akhir acara, sosialisasi terkait sistematika penulisan dan pengutipan disampaikan agar tulisan tersusun dalam format yang sama.

Seluruh tulisan ini nantinya akan disusun dalam tiga kategori tema bahasan. Pertama, yaitu bab Brexit dan Eksistensi Uni Eropa. Pada bab kedua, akan mengupas tentang Transformasi Governance Uni Eropa. Di bagian akhir, Hubungan Internasional Uni Eropa diprediksi dari berbagai sudut pandang.
Karya ini direncanakan rampung pada bulan Juni 2020 dan diharapkan dapat dinikmati pembaca sebelum tahun 2020 berakhir.(fvi)