Tag Cooperation

GERMANY IN THE INDO-PACIFIC: MAINTAINING COOPERATION WITH INDONESIA
Jakarta, Sitz der ASEAN

Writer: Hendra Manurung (Doctoral candidate in international relations, Padjadjaran University, Bandung)

Asia is the most dynamic growth region worldwide and will continue to consolidate this position in the 21st century. At the same time, Asia is faced with problems of global significance. German foreign policy takes account of both dimensions. The geopolitical power shifting in the Indo-Pacific had a significant impact on Germany: the economies of the European and Indo-Pacific regions which are also closely linked to each other through global trade and shipping chains. Important trade routes pass through the Indian Ocean, South China Sea, and the Pacific Ocean. Suppose, if a conflict occurs that can affect regional security and stability, all of this will certainly also have an impact on Germany political economy interest. Until now, the Indo-Pacific has not had a clear definition of geographic area. Each actor has a different definition. However, Germany recognizes the Indo-Pacific region as the entire territory formed by the Indian and Pacific Oceans.

Germany emphatically supports the EU’s efforts to become an ASEAN strategic partner and also working towards a free trade agreement between the EU and ASEAN as a whole. While France and Italy as the EU member states have now joined Germany in becoming ASEAN development partners.

Germany aim is to strengthen relations with this important region and to expand the cooperation in the areas of multilateralism, climate change mitigation, human rights, rules-based free trade, connectivity, digital transformation and, in particular, security policy. More than half of the world’s population lives in countries formed by the Indian and Pacific Oceans. In the last few decades, countries such as Indonesia, Vietnam, China or India have experienced rapid economic growth. In the midst of a global pandemic, currently, the region is a contributor to 40% of the world’s gross domestic product. With this increase, it is expected, this region has an important role in the economy and politics. Simultaneously, strategic competition is increasing for influence in the region. The Indo-Pacific will become major trending to the development of new international order in the 21st century. Germany wants to expand closer cooperation with countries in the Indo-Pacific.

Currently, the Indo-Pacific region is still facing the challenge of tug of influence and interests between the superpowers and the socio-economic impact of COVID-19. The ASEAN Outlook on the Indo Pacific serves as a guideline for maintaining regional peace and stability. It is expected that Germany can continue to support ASEAN centrality and participate in building a safe, peaceful and prosperous Indo-Pacific region.

The Indo-Pacific region is a priority of German foreign policy. Thus, upon adoption of the guidelines on September 2, 2020 through the German Federal Cabinet of Foreign Ministers, Heiko Maas stated as follows:

‘Prosperity and geopolitical influence in the coming decades will depend on the cooperation Germany has with countries in the Indo-Pacific region. There more than all regions of the world will take place strategic decisions regarding the future arrangement of international regulations. Germany wants to participate in shaping this arrangement so that decisions that occur will be made on the basis of international regulations and cooperation and not on the rights of the great powers’.

 

Further, through this strategy, Germany will actively participate in the establishment of a new international order in the Indo-Pacific region. The Covid-19 pandemic and its effects have shown once again that the rest of the world stands in front of world challenges that can only be overcome if countries will cooperate with one another continuously. An important goal is to strengthen the structure of international cooperation, especially to tie close relations with ASEAN countries, where Berlin also wants to improve cooperation with them in the future, particularly with Jakarta.

In March 2019, the German parliament delegation met the Indonesian Ministry of Foreign Affairs to discuss developments in ASEAN and the Indo Pacific. Several issues that are of concern both bilaterally and regionally include issues related to the Sustainable Development Agenda (SDGs), palm oil, the development of smart cities cooperation, the Jakarta Declaration and projections of the future of ASEAN and the economies of its member countries in the next 10 years (2019-2029). Strengthening the regional architecture and the economic recovery of the Indo-Pacific region after COVID-19 is the main focus for increasing cooperation between Germany and Indonesia. Germany’s commitment as a partner to the Indo Pacific countries to face these challenges is manifested in sustainable practical cooperation in the political, economic and socio-cultural fields.  According to the Indonesian Ambassador to Germany, Havas Oegroseno, Indonesia has great potential to become a partner country in the dual-platform in 2021 and 2023. Although economic conditions have deteriorated in almost all countries including Indonesia, there are at least three interesting economic figures, including 1) Indonesia’s digital economy has generated by around 11% from the previous year. In 2019, Indonesia’s digital economy reached US$ 40 billion and in 2020 amounted to US$ 44 billion, 25% of this increase came from the health sector; 2) during a world economic recession, Indonesia export figure was higher than in the same month in 2013; 3) The increase in investment in Indonesia, especially for domestic investment. During the pandemic period, Indonesia received sixteen investment commitments primarily for diversion and diversification.

For Indonesia which adheres to a free and active foreign policy, this cooperation also emphasizes that Indonesia is very open to expanding cooperation and funding assistance for cooperation programs from various parties, including with Germany. The development of bilateral cooperation with Germany needs to be a priority. The Indonesian government is also ready to offer land to become the centre for German industrial estates, in addition to having prepared around 100 hectares of land. Several other attractive incentives have been prepared by Jakarta, particularly for the development of the German automation and digital innovation sector in Indonesia sooner or later.

For Germany, even in a pandemic like today, industrial technology still remains the central platform for innovation and industrial transformation solutions. However, due to the COVID 19 pandemic, it was decided to postpone the Hannover Messe 2020 exhibition to 2021. The biggest industry exhibition is planned to be held on 12 to 16 April 2021. Indonesia as a partner country for this exhibition is privileged. This is because Deutsche Messe AG (DMAG) as the organizer of the exhibition gave Indonesia the opportunity to become a partner country twice, in 2021 for exhibition on digital platforms, and in 2023 on live platforms. This makes Indonesia the longest partner country in the history of the Hannover Messe.

Indonesia and Germany as fellow members of the G-20 have implemented a form of joint responsibility towards current global important issues, especially related to climate change. This initiative is also a form of synchronization between the challenges of developing urban areas and a commitment to address environmental problems. On March 4, 2021, Indonesia’s determination to carry out green reform in the field of urban infrastructure development has received support from the German Government. Indonesia and Germany agreed to collaborate on “Indonesia – Germany Initiative for Green Infrastructure”. This cooperation is directed at urban area transformation and innovation projects that aim to reduce carbon emission levels in Indonesia. Through this cooperation, Germany will provide funding support of € 2.5 billion, or approximately the equivalent of Rp 41.25 trillion. This funding will be provided in stages over five years in partnership from 2021 to 2026 with the KfW bank, which is the German National Bank for development funding, as well as with GIZ. Four provinces were selected for the implementation of this initiative, namely: West Java, Central Java, East Java and Bali. Each province has a flagship project which is certain to be funded by this initiative. These projects lead to Indonesia’s sustainable green economy and infrastructure.

During the last ten years since 2010, the Indo-Pacific region has gained a more important role both economically and politically. Berlin is currently setting its political economy future with the Indo-Pacific countries. One of the biggest global challenges, but also in the Indo-Pacific region includes fighting against climate change and fighting marine pollution. Germany wants to work together with Indo-Pacific countries to find better solutions to the problem.

There are many areas in which Germany would like to cooperate more closely with the countries of the region, both in the area of strengthening state law and human rights and in the areas of cultural, educational and scientific exchanges. The political security sector, of course, also has a special position and attention for Berlin.

Economic relations must also be developed among other things, through the completion of the European Union free trade agreements with other Indo-Pacific countries. Additionally, through the diversification of cooperative relationships, dependence on one party can be avoided. Further themes such as digitization, networking or technology usages with a vision for the future are of critical importance to Germany’s ability to compete globally. Public communication on free access to information and protection against fake news is also included.

The policy guidelines for the Indo-Pacific region adopted in 2020 by the German government are needed at this time to maintain the country’s geo-economic conditions in the region. With these guidelines, Germany wants to facilitate a European strategy towards the Indo-Pacific. Therefore, the European political approach strategy emphasizes and prioritizes strategic factors connected to closer cooperation, including with the EU region.

In January 2019, China questioned the Indo Pacific concept that Indonesia was proposing to adopt by ASEAN. China does not reject the Indo-Pacific concept that emphasizes principles of openness, inclusiveness, transparency, respect for international law, and the centrality of ASEAN, but also not comfortable with the concept. The Indo-Pacific concept was first popularized by the United States to compete with China’s influence, which is aggressively running trillions of US dollars’ worth of infrastructure projects through the Chinese Belt and Road Initiative. After the US, several countries including Indonesia are trying to develop their respective concepts regarding the Indo-Pacific, to ensure peace, stability and prosperity in Southeast Asia amid the tug-of-war of the constellation of world major powers.

For Germany and Indonesia and other countries in the Indo Pacific, the main challenge for developing the Indo-Pacific concept at this time is to form the foundation of the current concept of an inclusive region. The ASEAN Indo-Pacific concept must not embed the concepts of other countries or blocs. Equality should be part of the AOIP concept because of the principles held in the region. Indonesia treats every country equally.

Germany is one of just a few countries in the world that has combined its numerous measures, both existing and planned, in the Indo-Pacific region to create a coherent political framework. It is important to emphasize that these are guidelines for the entire Federal Government, underlining its common desire to engage to an even greater extent as an influential actor and partner in the Indo-Pacific region and to help maintain the rule-based order in place.

Gemeinsam mit Deutschland und Indonesien das wirtschaftswachstum sowie rrieden und stabilität und sicherheit in der Indopazifischen region fördern.

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.

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.