Tag Indonesia

INDONESIA-EFTA CEPA 2021: IMPLEMENTATION IN TRADE & INVESTEMENT
EFTA Secretary-General meets Indonesian Deputy Minister of Trade in Geneva to discuss on EFTA–Indonesia Comprehensive Economic Partnership Agreement on April 30, 2021(CEPA)

Writer: Hendra Manurung is currently a doctoral candidate in International Relations at Padjadjaran University, Bandung, West Java

Switzerland, Liechtenstein, Norway and Iceland as EFTA countries are ideal partner due to their high purchasing power markets as well as having the value of large foreign investment to most developing countries. It can be used as an entry point for Indonesia’s trade advantages in goods, services and investment in continental Europe, and the potential export destination with products complementary. 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.

Indonesia is currently offering EFTA countries commitments in 5 (five) potential investment sectors, namely: 1) agriculture, 2) mining, 3) manufacturing, 4) energy, 5) clean water supply. Indonesia and the European Free Trade Association Comprehensive Economic Partnership Agreement, known as IE-CEPA are targeted to be rolled out in semester II-2021. Indonesian Ministry of Trade and the Chamber of Commerce and Industry of Indonesia continue to finalize the implementation of investment and trade in the four countries that are members of the European Free Trade Association or EFTA.

The four countries are Switzerland, Norway, Iceland and Liechtenstein. In the trade sector, Indonesia will get a 0 percent tariff on the elimination of 7,042 tariff posts or 81.74 percent of the total tariff posts from Switzerland and Liechtenstein, 8,100 tariff posts (94.28 percent) from Iceland, and 6,388 tariff posts (99.94 percent ) from Norway. Through the IE-CEPA cooperation forum, it is likely that Indonesia’s industrial and business sectors can generate exports and gain foreign investment from Europe to support the acceleration of national economic growth. Previously, on March 22, 2021, the Indonesian government and the People’s Representative Council of the Republic of Indonesia officially passed the Draft Law on the Comprehensive Economic Partnership Agreement between the Republic of Indonesia and the EFTA States aka the Comprehensive Economic Partnership Agreement between the Republic of Indonesia and EFTA Countries). In the trade sector, Indonesia can take advantage of a 0 percent rate to boost exports of competitive products to the four EFTA countries.

The Swiss government imposes tariffs of 0 percent for a wide range of gold products and jewellery, textiles, footwear, two-wheeled vehicles, and essential oils. While the government of Iceland, has imposed a tariff of 0 percent for the products of Indonesian export commodities, such as coffee products, footwear, fish oil, fish, shrimp, paper, and furniture.

Moreover, in the investment sector, the Indonesian government has offered commitments in 5 (five) potential investment sectors consisting of 182 sub-sectors. The five strategic sectors include agriculture, mining, manufacturing, energy, and the provision of clean water. Until now, Indonesia has ratified IE-CEPA through Law Number 1 of 2021 concerning the Ratification of IE-CEPA. Currently, Indonesia only has to complete 2 (two) derivative regulations, namely a) regulations of the minister of trade and b) regulations of the minister of finance.

Indonesia-European Free Trade Association Comprehensive Economic Partnership Agreement or Indonesia-EFTA CEPA or IE-CEPA is economic cooperation between Indonesia and the EFTA group of countries consisting of Iceland, Liechtenstein, Norway, and Switzerland. Indonesia’s agreement with an EFTA country is Indonesia’s first comprehensive economic agreement with a country in Europe. In addition to increasing exports, investment and market access to the European continent, IE-CEPA is expected to raise the profile and positive campaign for Indonesian palm oil products globally and encourage the acceptance of sustainability standards for Indonesian palm oil (ISPO) by Switzerland.

In the future after the enactment of the National Bill on IE-CEPA, the government will make supporting regulations to implement IE-CEPA in the form of a Minister of Finance Regulation regarding the procedures for imposition and determination of import duty rates, as well as a Regulation of the Minister of Trade regarding the provisions of a certificate of origin. This comprehensive agreement consists of 12 chapters, 17 attachments, and 17 additional documents from the appendix covering issues of trade in goods and services, investment, protection of intellectual property rights, procurement of government goods and services, and cooperation and capacity building. The IE-CEPA Agreement is Indonesia’s first trade agreement with countries on the European continent. In addition, the Government of Indonesia should immediately prepare strategic steps through coordination efforts with relevant ministries and agencies, as well as stakeholders to implement IE-CEPA which is targeted at the beginning of the second quarter of 2021.

Henceforward, with the passage of the draft law into National Law, the Indonesian Parliament has carried out the constitutional mandate because IE-CEPA and the Omnibus Law is expected able to promote economic transformation and improve public welfare, particularly in promoting post-Covid-19 national economic recovery. IE-CEPA is the initiation of negotiations between Indonesia and EFTA countries starting in 2005 through the establishment of a joint feasibility study, which was followed by negotiations since 2011. Negotiations were suspended in 2014 and reactivated in 2016. The IE-CEPA was signed on 16 December 2018 in Indonesia by the Indonesian Minister of Trade and Ministers representing EFTA countries. This agreement also covers issues of trade in goods and services, investment, protection of intellectual property rights, procurement of government goods and services, and cooperation and national capacity building.

In 2018, the IE-CEPA negotiations have been going on intensively for 8 years since 2010, where the longest CEPA negotiations have ever had by Indonesia to date. Indonesian business actors should seriously optimize the CEPA with the EFTA countries that have been struggling for a long time because based on a survey some of the free trade agreements have stalled or are not being properly utilized. The IE-CEPA negotiations lasted for eight years before finally being declared substantively concluded by negotiators at a meeting in Bali on 29 October to 1 November 2018, and declared final by the Ministers on 23 November 2018 in Geneva, Switzerland. Previously, Indonesia had signed a CEPA with Chile in December 2017 in Santiago. In fact, in 2019 most international events also covers dangerous clashes between major powers in the Middle East and in South Asia. Missile strikes, proxy attacks and challenges to freedom of navigation in the Persian Gulf in mid-2019 raised the possibility of Iran going to war with Saudi Arabia and other regional powers, and potentially with the United States. While India and Pakistan as neighbouring countries also disputed over Kashmir and escalated to open conflict. In Asia-Pacific, these two countries are nuclear-armed states. Henceforth, in both cases, the situation eventually calmed, but not as a result of traditional crisis management. Therefore, in 2019 there were no gains and some further setbacks in nuclear arms control. The USA withdrew from the 1987 Treaty on the Elimination of Intermediate-Range and Shorter-Range Missiles (INF Treaty) and Russia formally suspended its obligations under it. Uncertainty continued about whether the Moscow and Washington bilateral 2010 Treaty on Measures for the Further Reduction and Limitation of Strategic Offensive Arms (New START) would be extended beyond its current expiry date of February 2021. Additionally, discussions on denuclearization between the Democratic People’s Republic of Korea (North Korea) and the USA lost traction during 2019 and by the end of the year, the Iran nuclear deal (2015 Joint Comprehensive Plan of Action) was largely non-functional. Amid the threat of sanctions by European countries to Belarus in the midst of 2021, the arrest of Roman Protasevich, one of the Belarussian dissidents who have been a constant thorn in Lukashenko’s side. Protasevich was pulled off the plane, along with several other Belarusian and Russian nationals. Vilnius has become a hub of opposition to Lukashenko’s rule, with Lithuania rejecting Lukashenko’s legitimacy and providing support and protection to exiles. However, sooner or later, it turns Belarus will become Europe’s North Korea issue.

Switzerland has gained the support of the Senate on December 20, 2019, and followed by a public referendum on March 7, 2021, to implement the IE-CEPA. In IE-CEPA negotiations, Switzerland agreed to accept the certification of sustainable palm Indonesia, the Indonesia Sustainable Palm Oil (ISPO). As for Norway and Iceland has completed their ratification on December 13, 2019, and January 29 2020. Liechtenstein is still in the process of ratification.

Indonesia has full confidence through the implementation of the IE-CEPA implementation in the Comprehensive Economic Partnership Agreement. In the future, it will bring Indonesia’s economy to be stronger, more competitive, and attractive to investors from EFTA’s developed countries. The government needs to take strategic policies to face global challenges which are currently full of uncertainty and promote economic recovery after the Covid-19 pandemic. One is through the Agreement’s IE-CEPA.

INDONESIA-FRANCE RELATIONS: STRATEGIC OPPORTUNITIES IN THE INDO-PACIFIC
Source: Ambassade d’Indonésie en France (2020)

Writer: Hendra Manurung is currently a doctoral candidate in international relations at Padjadjaran University, Bandung

In an international context marked by uncertainty and the increase in unilateralism, France’s priority is to propose an alternative: a stable, multipolar order based on the rule of law and free movement, and fair and efficient multilateralism. The Indo-Pacific region is at the heart of this strategy. This strategic region has major global importance in terms of biodiversity and climate change, particularly considering the demographic and economic weight of the area as well as the energy intensity of its natural resources. For France, the Indo-Pacific space is a geographic reality. France is present in the region via its overseas territories, and 93% of its exclusive economic zone is located in the Indian and Pacific Oceans. The region is home to 1.5 million French people, as well as 8,000 soldiers stationed in the region.

France is likely to intensify our mobilization in regional organizations, starting with ASEAN, which aims to remain at the heart of the construction of a multipolar Asia, and of which we are now a development partner, as well as in the Indian Ocean Rim Association, the Indian Ocean Community, the Pacific Community, and the Pacific Islands Forum. Henceforward, France’s strategy for the Indo-Pacific has become one of its priorities for international action since launched by the President of the French Republic during his Garden Island speech in Sydney, Australia in May 2018. In 2021, three years later, the strategy’s implementation is now producing tangible results and major progress in France’s commitments in the region. Paris wants to be more involved in the resolution of regional crises, in the securing of the main shipping routes and in counter-terrorism efforts, including terrorist financing, radicalization and organized crime. Further, it wants to strengthen the ties that bind the countries of the region on the basis of converging visions and shared interests, including with Indonesia, Australia, India, Japan, Malaysia, New Zealand, Singapore, South Korea and Vietnam, while deepening its relations with China, in the strategic framework that is now that of Europeans concern.

The Indo-Pacific has also become France’s strategic geopolitical and geo-economic reality. The global economy’s centre of gravity has shifted from the Atlantic to the Pacific. Six members of the G20, such as Australia, China, India, Indonesia, Japan and South Korea are located in the region. The maritime trade routes linking Europe and the Persian Gulf to the Pacific Ocean, via the Indian Ocean and South-East Asia, have become very important. The region’s growing share of world trade and foreign investment means that it is at the forefront of globalization and tremendous digital technology advance.

The enhancement of bilateral relations between Indonesia and France is pursued in order to achieve the mutual benefit interests and welfare of the people of the two countries, as well as to strengthen relations in various fields, particularly defence, trade, investment, tourism, culture, industry, economy, digital technology, as well as international cooperation.

Indonesia and France bilateral relations have been going on for 70 (seventy) years and have been well established since September 1950, and now both countries continue to improve as identified from the cooperation in various sectors. This cooperation is also evident from a number of dialogue activities and visits between officials of the two countries, both in a bilateral and multilateral framework, as well as mutual support in various nominations/candidacies in international organizations. Since 2011, right on the 60th anniversary of diplomatic relations between Indonesia and France, the two countries have agreed to forge a strategic partnership. Lion Air bought 234 Airbus aircraft in 2013. Although Airbus is a European program, the planes are made in Toulouse and France is recognized for its technologies and its innovative abilities. Last September 2014, Telkomsel chose Thales Technologies and Arianespace to launch its Telkom 3S satellite by 2016. The two countries agreed to establish a Strategic Partnership during the official visit of Prime Minister François Fillon to Indonesia from 30 June to 2 July, which focused on five areas of cooperation, namely: 1) Trade and investment, 2) education, 3) industry defence, 4) socio-cultural / people-to-people contacts, and 5) handling the impacts of climate change.

Henceforth, as one of the strategic economic cooperation partners, the government always maintains and improves bilateral relations with France that have existed for 70 years (1950-2020). In the midst of the global crisis due to the Covid-19 pandemic, maintaining close relations between one country and another need to be maintained sustainably, likewise the emphasis on the relationship between the government and the business world in one country with other countries is also becoming more important. Indonesia and France need to strengthen economic cooperation to face the challenges caused by the Covid-19 pandemic. Among other things, by always maintaining dialogue, including maintaining the flow of goods, especially food, medicine and medical equipment. In June 2020, Indonesia appreciates the assistance to develop health infrastructure in the Covid-19 pandemic that occurred due to the collaboration between Agence Française de Development (AFD) and PT Sarana Multi Infrastruktur (SMI).

This strategic partnership cooperation continues to be well established, until in March 2017, President François Hollande visited Jakarta and held a bilateral meeting with President Joko Widodo. The two leaders agreed to continue to strengthen bilateral cooperation between Indonesia and France, particularly in the fields of the creative economy, education, maritime affairs, sustainable cities development, energy, defence, and infrastructure. Shortly thereafter, President Joko Widodo also met President Emmanuel Macron, who officially became President of France on 14 May 2017, at the G20 Summit meeting in July 2018 in the City of Hamburg, Germany.

Indonesian government has always been committed to prioritizing public health and reviving the economy, prioritizing cooperation with various parties, implementing good government governance and reducing inefficient bureaucracy, and eliminating overlapping regulatory rules.

French entrepreneurs investments have entered into several lines of business in Indonesia. Especially since the visit of the French President to Indonesia on March 29 2017, there have been a number of bilateral agreements in the maritime and fisheries sector, creative economy and sustainable urban development. In addition, France which is well-known for the Eiffel Tower is one of Indonesia’s main export markets in Europe. Indonesian main commodities consist of palm oil, electrical machinery and equipment, rubber, footwear, furniture, and so on. France is also an important partner in development and environmental cooperation. In the first quarter of 2020, the investment disbursed by France to Indonesia was US$ 754 million, an increase from US$ 702 million in the same period in 2019.

Meanwhile, in terms of investment, Indonesian Investment Coordinating Board noted that the realization of French investment in Indonesia reached US$ 16.89 million for 255 projects (2019). This is a significant increase compared to the same period in 2018 which was valued at US$ 13.10 million for 186 projects. At present, Indonesia’s national development is related to the development of the implementation of Indonesian policies in the face of the Covid-19 pandemic, including the Exit Strategy, the National Economic Recovery Program and the Omnibus Law.

In the field of education, the French government together with Indonesia formed a joint working group cooperation forum, which includes, among other things: the double degree program at Masters and the Joint Supervision program at Doctoral Strata which is co-financed. The number of Indonesian students in France is 425 people, which is the highest in the last five years, from 2011 to 2016. Meanwhile, vocational secondary education cooperation has been established through a number of apprenticeship/internship programs in France attended by several vocational school teachers.

The defense cooperation between Indonesia and France is strengthened recently due to the two countries awareness in independence of managing the defense sector, including military tools and personnel maintenance.

Thereafter, as strategic partners, the relations between the two countries have been going well and open up great opportunities to increase defense cooperation. Indonesia needs to strengthen cooperation with France in an effort to strengthen and modernize the main tools of the defense system and advance the national defense industry. It is expected that the mutual cooperation will be established and benefit mutually in accelerating the progress of the defense industry in Indonesia as well as strengthening the Indonesia military defense system through technology transfer, increasing the use of local content and also increasing human resource capacity, as well as French collaboration to make Indonesia a key part of global production in defense equipment products. In the field of defense cooperation, bilateral cooperation between the two countries is based on the 1996 Memorandum of Understanding between Indonesian Ministry of Defense and the French Ministry of Defense in the fields of: cooperation in military equipment, logistics and defense industries. This cooperation was further enhanced through the holding of Military Bilateral Talks between the Indonesia military forces (TNI) Headquarters and the French, namely the AP French Headquarters, namely for the fields of education, information exchange, and dialogue forums.

Meanwhile, for socio-culture, there were a number of Franco-Indonesian associations in France that were particularly active in the arts and culture sector. These associations also contribute to improving good relations, especially people-to-people-contact, between French and Indonesians. On the other hand, there are also a number of universities in France that have Indonesian language programs, which are an asset in introducing Indonesian culture in France. In France every year there are a number of cultural and tourism promotion activities carried out by Indonesia and the local government of France.

During the visit of French President Francois Hollande to Jakarta in March 2017, Indonesia and France signed 5 (five) memoranda of understanding, namely: in the field of urban development sustainability, tourism, defense, science and research, and the exchange of research personnel. Furthermore, with regard to maritime cooperation, Jakarta has requested Paris cooperation in fighting IUU fishing, including making Illegal, unreported and unregulated (IUU) fishing into transnational organized crime.

Meanwhile for the creative economy sector, cooperation in the fields of cinematography, film, fashion and the digital economy will continue to be developed. Further, in the tourism sector, France sees Indonesia as a very large archipelagic country so that transportation needs to be developed and will also increase the number of tourist visits.

Indonesia and France also have a very strong cooperation closely on various international issues, including the issue of Palestinian independence, world peace forces, and against extremism and terrorism. The two countries agreed to fight for this achieving Palestinian-Israeli peace through the concept of two state solutions. Indonesia and France as contributors to the peacekeeping force world under the United Nations, agreed to increase cooperation, including increasing the capacity of the French language for Indonesian peacekeeping forces. The existence of a peacekeeping force is a commitment between France and Indonesia to jointly eliminate conflicts in the world. The spread of tolerance values and eliminate xenophobia as a joint effort to eradicate extremism and global terrorism.

France perceives Indonesia with 270 million inhabitants, which has citizens of the world’s largest Muslim majority country, capable of presenting a tolerant and plural diversity. This is an inspiration for France, namely upholding the principles of freedom and tolerance to eliminate terrorism without discrimination.

It is expected that France together with Indonesia will be able to cooperate more and make new breakthroughs towards significant partnerships in the fields of defense, economy, politics, security, as well as socio-culture. Both countries cooperation supposes are not only beneficial for bilateral interests in short and medium-term, but also regional and international interests, including through mutual support in international forums continuously.

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 – EAEU Relations: Closer Economic Cooperation
Source: Indonesia – EAEU relations: developing trade and economic cooperation

Writer: Hendra Manurung is currently a doctoral candidate in international relations, Padjadjaran University

Economic diplomacy relates to the use of a state’s economic tools to safeguard its national interests and pursue its national goals, which encompass economic activities of its international relations, including strategies designed to secure trades, generate investments, lend aid, and negotiate free trade agreements or comprehensive economic partnership agreement. Henceforth, in the international system, economic diplomacy pertains to the full spectrum of diplomacy relating to economic activities in the pursuit of a country’s policy objectives in general and economic goals in particular. The economic diplomacy follows a policy direction laid down by President Joko Widodo, whereby 70-80 percent of all resources should be dedicated to more effective and efficient efforts on economic diplomacy, amid a world full of uncertainty and the upsurge of protectionisms posing challenges to many countries.

Moreover, Indonesia’s economic diplomacy should turn the aforementioned challenges into opportunities. In retrospect, for example in 2008 and 2009, the fact that the financial crisis threatened to pose a downward spiral of the global trade and economic growth, had played a vital role in forming collectively international economic responses. In the midst of global pandemic and world economic growth slowdown, it represents how relevant and important international cooperation is to overcome global problems. Taking lessons learned from such experiences, in the face of current global and regional challenges, taking into account the potential fragility of the international economic system, it is important for Indonesia’s economic diplomacy to underscore the need for strong frameworks for multilateral norms setting through, among others, enhancing international economic partnerships.

Henceforward, Indonesia economic diplomacy needs to gauge the current globalization and shifting power balances between the West and China with Russia in a holistic manner, as these developments have created new conditions for governments in all parts of the world to adopt more active economic diplomacy. Also, there has been a paradigm shift from traditional practices of state-to-state economic diplomacy to a more comprehensive approach of multi-dimensional economic diplomacy. Not only does it encompass commercial diplomacy through trade and investment promotion, it also encompasses the expansion of national trading and investment purview, the recalibration of global strategies, including the interlinked mutual reinforcement between economic interests and such underlying factors as geo-politics, development cooperation, and propensity towards the global economy. Jakarta’s efforts to boost foreign trade and attract more FDI will, and must always, be directly interlinked to the grand design of Indonesia’s foreign policy and diplomacy. The interconnection between international trade and diplomacy is absolutely vital, for a stronger economic diplomacy is not simply commercial diplomacy that can be merely accomplished through promotion.

Indonesia’s diplomacy is actually expanding prospective with the aforementioned interlinkage. Indonesia’s diplomacy has been seen as previously focused more on regional and global political issues, whereby Indonesia as a middle-income country has been continuously playing significant roles and showing its strong leadership at regional and international stages. It also necessitates the recalibration of strategies to pervade the need for a specific grand strategy for a more concerted economic diplomacy. Hence, a stronger economic diplomacy must go hand in hand sustainably with the national related-stakeholders strategic vision of regional and global geo-politics and gravitational trends of the global economy. Furthermore, in this regards, economic diplomacy is inseparable from global politics. In the meantime, as Indonesia foreign policy and diplomacy economy sustainable should be collaborative synergy and must not be away from the people, strategies in economic diplomacy must also correlate with the basic needs and interests of the nations.

Indonesia and the EAEU countries show a strong commitment to preparing for a stronger long-term partnership, especially in overcoming the challenges of the global economy and the decline in economic growth after the COVID-19 epidemic. In 2020, Indonesia has strengthened economic cooperation with countries in the Eastern European Region and Central Asia that are members of the Eurasian Economic Union (EAEU), through the process of forming Indonesia and EAEU FTA. Indonesia together with the EAEU countries formed a Joint Feasibility Group in the framework of the formation of Indonesia-EAEU FTA which was approved by the EAEU Trade Ministers on 18 May 2020.

This is the formalization of the establishment of the FTA Indonesia and the EAEU has been initiated in 2017. The formation of the Indonesia-EAEU FTA will certainly be able to 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 October 2019, Indonesian government and the Eurasian Economic Commission signed Memorandum of Cooperation. Furthermore, for Indonesia, increasingly intensive relations with the EAEU are part of a national trade policy strategy to target non-traditional markets. EAEU is in the 24th place for export destinations from Indonesia and 21st for imports from Indonesia. Indonesia’s main exports to the EAEU are palm oil, panel boards, copra, cocoa butter and margarine.. Meanwhile, Indonesia’s main imports from the EAEU are fertilizer, coal and wheat. In 2019, Indonesia’s total trade with the EAEU reached US$ 2.6 billion, with export and import values of US$ 1.0 billion and US$ 1.5 billion, respectively.

Trade in the January-July 2020 period has decreased by 22.16 percent compared to the same period in 2019. Indonesia and EAEU countries free trade are expected to boost the rate of trade and investment between the two.

The aim of this cooperation is to promote comprehensive cooperation between Indonesia and the member countries of the Eurasian Economic Union towards a higher volume of trade and joint investment, the elimination of trade barriers and closer collaboration in areas of mutual interest.  The areas for both sides cooperation, as follows: regional economy integration, trade policy, economic and macroeconomic growth in the member countries of the Eurasian Economic Union and Indonesia, customs regulations and trade facilitation measures, technical regulations and standardization, sanitary and phytosanitary implementation measures, financial markets, transportation, energy, agriculture, regulations on business competition and anti-monopoly policies, industries, intellectual properties, information technology and the digital economy, trade in services and investment, protection of consumer rights, entrepreneurship development including MSMEs, other fields of mutual interest.

Moreover, the Renminbi currency also has been deliberately allowed to weaken by the Chinese governments’ since August 2019, in which, Beijing’s decision was made as a strategic retaliatory response to restore its trade advantages and negate the effects of the next round of import tariffs. This Chinese policy responds to US President Donald Trump’s decision regarding the dynamics of US bilateral trade relations with China, particularly in the imposition of an additional 10% on Chinese goods worth US$ 300 billion or €269 billion, effective in September 2019. If this US policy implemented, then almost all US imports from China will be subject to high tariffs. Currently, the US imposes a 25% tariff on US$ 250 billion worth of Chinese exporting products.

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. In addition, the trade sector for the national leading export commodity of palm oil must also take advantage of various trade and investment economic cooperation to build momentum for economic revival and boost Indonesia’s competitiveness during and after the global pandemic, especially with countries that are members of the Eurasia Economic Commission. EAEU is a single market with five members, namely Armenia, Belarus, Kazakhstan, Kyrgyzstan, and the Russian Federation. In 2019, the EAEU group of countries has a population of approximately 183 million and per capita gross domestic product of US$ 27 thousand.

In 2018, Indonesia and the EAEU trade volume reached US$ 2.85 billion, with Indonesian exports to the EAEU amounting to US$ 1.04 billion and imports amounting to US$ 1.81 billion. In general, the trade trend from 2014-2018 increased by 3.37 percent. Indonesia’s main exports to EAEU countries in 2018 were palm oil and its derivatives, US$ 403.19 million; copra coconut, palm kernel or liquefied oil, US$ 69.32 million; margarine, US$ 49.62 million; amino oxygen, US$ 42.71 million; and natural rubber, US$ 34.85 million. Meanwhile, Indonesia’s main imports from EAEU countries are semi-finished iron/steel products, US$ 513.09 million; mineral or chemical potassium fertilizers, US$ 421.63 million; wheat and muesli, US$ 291.65 million; coal and other materials and other solid fuels, US$ 130.24 million; and non-mineral or chemical nitrogen fertilizers is US$ 75.02 million.

Indonesian government committed seeks to make foreign investors comfortable by minimizing various trade and investment barriers. Indonesia is continuously to strive to improve relations trade with the EU by minimizing various trade barriers and investment with partner-countries in the EU. By minimizing barriers, the ease of access to the Indonesian market with its superior export commodities will boost global markets significantly. Indonesia and the EU have a common interest in working together and enhance further cooperation to overcome global challenges on issues such as climate change, poverty, regional conflicts, reducing social exclusion and safeguarding multilateral institutions, including the UN reform.

 

INDONESIA & CHINA FM VISITS TO SE ASIA
Wang Yi meets President Joko Widodo (http://indonesian.cri.cn, 15/1.2021)

Writer: Hendra Manurung is currently a doctorate candidate in international relations at Padjadjaran University, Bandung, West Java

After World War II (1945-1990) until the current digital revolution 4.0, the international community experienced the Pax Americana momentum. A period of global development and international peace has taken shape, with the United States as a superpower and the international political system leading to unipolar and arrogance of interests alone.

During Wang Yi’s visit to Indonesia on January 13, 2021 (kemlu.go.id, 14/1/2021), 5 points of understanding were reached, namely 1) coping with the pandemic, 2) deepening pragmatic cooperation in various fields, 3) encouraging regional cooperation in East Asia, 4) maintaining peace and stability in the South China Sea, and 5) together to maintain and encourage multilateralism.

So far, Indonesia and China have discussed and exchanged ideas about the global situation, particularly in facing the challenges of the COVID-19 pandemic. Regarding the issue of health cooperation, the Indonesian government emphasized the importance of the sustainability of regional health cooperation. Especially in the framework of ASEAN cooperation as a follow-up to China’s various commitments in handling the global pandemic, such as the US$ 5 million commitment to support the Public Health Cooperation Initiative: Program on Public Health Emergency Preparedness Capacity or PROMPT, and a US$ 1 million commitment to the ASEAN COVID-19 Response Fund.

Since the beginning of the pandemic in March 2020, Indonesia and China have collaborated in health cooperation both to provide diagnostic, therapeutic, and vaccine tools. In addition, the two countries are also committed to increasing the independence of the drug industry, medicinal raw materials, and medical devices in Indonesia.

In the midst of a pandemic and a sluggish global economic situation, Indonesia’s exports to China in 2020 increased by 10.96 percent. One of the products that experienced a significant increase was steel exports to China, which was the result of the downstream industrial process in Indonesia.

Therefore, in order to achieve balanced and mutually beneficial trade, Indonesia underlines the importance of joint efforts to overcome various obstacles in bilateral trade, in particular, to expand and open up Chinese market access for Indonesia’s leading exports such as palm oil, fishery products, tropical fruit, and swallow’s nest.

Both countries agreed to encourage boosted foreign investment and mutual cooperation in infrastructure development through partnerships that are quality, environmentally friendly, and which can absorb Indonesian workers.

Jakarta appreciates Beijing for the cooperation in handling problems of Indonesian crew members working on Chinese-flagged ships, including support for the return of Indonesian crew members from November to December 2020. In addition, it also encourages solutions for the return of stranded crew members, settlement of labor rights, and improvement of conditions, safe and conducive work, and law enforcement implementation through mutual legal assistance.

Chinese Foreign Minister Wang Yi to Russia (2018) (http://www.kremlin.ru/events/president/news/57207)

On the other side, regarding regional and global cooperation, it is necessary to implement the ASEAN Outlook on the Indo-Pacific (AOIP), as well as Indonesia’s determination to continue to maintain ASEAN centrality in its implementation. It is very important to maintain stability and peace in the region, to keep the South China Sea as a peaceful and stable sea. All countries need to respect and implement international law, including the 1982 UNCLOS.

While in Indonesia, Chinese Foreign Minister Wang Yi has also reviewed one of the synergy implementation projects of the Indonesia Global Maritime Fulcrum and the China Belt and Road Initiative and a meeting with the Coordinating Minister for Maritime Affairs and Investment in Lake Toba, North Sumatra, as well as carrying out a courtesy visit to President Joko Widodo.

Hence, it needs to be a shared priority of China and Indonesia are both large developing countries and important new economic powers, where strengthening cooperation between the two countries has strategic significance and global influence continuously (http://indonesian.cri.cn/20210115). China is willing to work with Indonesia to carry out the mutual beneficial understanding reached by the heads of the two countries, push forward bilateral relations to achieve greater progress by prioritizing joint prevention of the pandemic, and developing mutually beneficial cooperation without harming Indonesia’s political economy interests in the region, of course.

Wang Yi’s visit is part of a series of visits by the Chinese Foreign Minister to several ASEAN countries and in the framework of celebrating 70 years of Indonesia and China diplomatic relations.

Chinese Foreign Minister Wang Yi initiated his Southeast Asian tour at the beginning of this week beginning from 12 to 13 January 2021, after he closed a six-day tour of Africa the previous week (thediplomat.com, 15/1/2021). Wang’s trip is pursued at stabilizing South China Sea region, strengthening maritime cooperation with Southeast Asian states, and expecting positive results from its Belt and Road Initiative development. That’s why Wang Yi chose to visit Myanmar, which assumed the roles of the coordinator of China-ASEAN relations and co-chair of consultations on the Code of Conduct, known as COC, in 2021, as well as Brunei, which holds the rotating ASEAN chairmanship for 2021. As China wants to accelerate the COC negotiations, better policy coordination with these two countries would be beneficial. Beijing is trying to upgrade its political economy relations with Jakarta and Manila by providing vaccine availability and stronger bilateral economic cooperation benefits along with maintaining regional peace and stability.

Meanwhile, January 20, 2021, will see the change in US administration with President-Elect Joe Biden swearing-in as the 46th US President, things remain tensed among various world major powers conflicting interest from Middle East, Africa, Europe, and the Asia Pacific to how will Joe Biden administration decide and behave strategically in responding to any international relations issues dynamics.

Under the leadership of Joe Biden from 2020 to 2024, it is likely that the position of the United States as a superpower will soon improve its ambitious presence in various parts of the world, especially in the Southeast Asia region. This is done by Washington D.C regarding the emergence of a real threat to Beijing’s maneuver ambition to dominate and control the South China Sea region through its baseless nine-dashed line claims.

Washington DC policymakers have considered the possibility of sharp rivalries between the US and Chinese powers in the Southeast Asian region. This has happened since Hillary Clinton became US secretary of state with ‘Pivot to Asia’ diplomacy along with US President Barack Obama’s Rebalance Policy in 2010.

China must maintain stability and embodiment in the South China Sea region to respect international law, including the implementation of UNCLOS in 1982. Otherwise, it will escalate conflictual tension and open conflict with the US.

Therefore, the Southeast Asia region may become a central point of economic growth in the Asia Pacific region as it has become a crucial point for the struggle for influence from the US and China followed by the deployment of massive military forces in the South China Sea region since 2018.

Since most of the Southeast Asian countries rely heavily on foreign trade and investment, building closer economic ties with China would be the best choice for them to put their economies back on their feet. In fact, the 10 countries of Southeast Asia collectively became the biggest trading partner for China for the first time in 2020, overtaking the European Union. In the new context of the slowed spread of COVID-19 after vaccine rollouts, the implementation of BRI projects will be accelerated to boost employment and economic development in Southeast Asian countries.

A shift in the world political constellation which has been dominated by the United States, European Union, and China is likely to sharpen Beijing and Washington D.C.’s interests in the region. This is related to the possibility of deploying US military power under Joe Biden’s administration to the Southeast Asia region in response to China’s massive militarization in the South China Sea.

Moreover, the rivalries of the US and China in the South China Sea region are also a manifestation of Indonesia’s regional interests and maintaining a free and active foreign policy orientation, and optimizing Indonesia’s role in maintaining world peace.

Thereafter, in the midst of the global pandemic, suppose Indonesia will rise to a world major power by taking political economy advantage and utilizing the global situation of the shifting constellation of the US, the EU, and China in the international political and economic system.

Hence, the South China Sea regional situation is likely to continue to heat up with the growing importance of the region’s economic development, in which about 60 percent of world trade passes this maritime route.

Small regional countries with a tendency to an alliance with the US, such as the Philippines, may be used by the US to trigger the destabilization of the South China Sea area, which of course has great potential to disrupt China’s trade flow.

Certainly, China will be very ambitious to defend its political economy interests under the US new President Joe Biden administration. So far, the countries in Southeast Asia that have an alliance with China are generally small countries, such as Cambodia, Myanmar, and Laos. China needs friends who are trusted and calculated in the region, such as Indonesia. Jakarta should negotiate and take the benefits and benefits while remaining alert to the threat of China’s unilateral claims in the South China Sea.

China must be invited to invest heavily and transfer technology without harming Indonesia’s interests. The existence of China should be optimally utilized to strengthen the resilience of Indonesia’s industry from upstream to downstream.

Indonesia as the third largest democratic country in the world with a geostrategic and geopolitics position in the Indo-Pacific region is much likely to be a reliable stabilizing actor with strong and solidify its regional strategic role as a peacebuilder in the Asia Pacific.

WHO’S DRONES UNDER INDONESIAN WATERS
Source: http://english.sia.cas.cn, 21 July 2017

Writer: Hendra Manurung is currently a doctoral candidate in international relations at Padjadjaran University, Bandung, West Java

In early January 2021, the Indonesian public was greatly shocked by the discovery of an underwater drone caught by fishermen by late December 2020, off the coast of the Selayar Islands, South Sulawesi.

The initial discovery of the drone was caught by local fishermen at Masalembu Madura on 20 December 2020 which was equipped with a surveillance camera and had Chinese characters (Kompas, January 5, 2020). Previously on March 3, 2019, also found a drone with Chinese characters and clearly written Shenyang Institute of Automation, Chinese Academy of Sciences.

Recently in 2018 (https://sputniknews.com, 2 August 2018), Shenyang Institute of Automation of Chinese Academy of Sciences or known as CAS, recently completed test flights of Xiangying-200 unmanned helicopter and it has now entered its acceptance stage. Xiangying-200 was jointly developed by Shenyang Institute of Automation and several units of CAS. It’s 8.7 meters long, 2.5 meters high, and can carry a payload of 150 to 200 kg. The key components such as the control system, power system, and transmission system are all domestically developed. It indicates that the independent research and development ability of China’s large unmanned helicopter has been further improved.

However, the shocking news was only widely discussed by the Indonesian public in early 2021. The drone with a series of sensors on its nose has a length of 2.25 meters the length of the two wings is 50 cm, the length of the rear antenna is 93 cm, while the body structure is made of aluminum with weighs 175 kilograms (Kompas, 5 January 2020).

During peacetime, a sea-glider is a small drone operated by the manufacturing country with the aim of being able to operate under the depths of the sea, and is useful for collecting marine data for the national interest by the decision-makers of the making countries. This underwater drone is equipped with sophisticated sensor instruments to monitor temperature, salinity, ocean current velocity, and various other marine conditions.

Further, the discovery of the drone in the form of a sea-glider is currently being examined by the Indonesian Navy. It is likely that a thorough investigation process will take at least a week to a month. A number of cases of finding underwater drones or sea-gliders in Indonesia since 2019 should never be underestimated and must be investigated comprehensively, and opened as widely as possible to the Indonesian public, who and which countries actually own the underwater drones. At least, there are three cases of findings of underwater drones or sea-gliders in Indonesia, namely: 1) Tenggel Island, Bintan Region (3 March 2019). At drone found Chinese characters written Shenyang Institute of Automation, Chinese Academy of Sciences; 2) Masalembu, Madura (20 January 2020). Found things like drones equipped with camera and Chinese characters; 3) Selayar waters, South Sulawesi (26 December 2020). A fisherman found a sea-glider. Indonesian Navy has not found any characters of the characteristics of the writing originating from the country of manufacture.

From now on, the Indonesian government must never be afraid of China’s expansive ambitions to control and dominate the South China Sea territories. To the last drop of blood, the Indonesian nation supports the sovereignty of Indonesia’s territorial territories.

Obviously, the location of the discovery of a number of cases of an underwater drone or sea-glider findings in Indonesia over the last two years is precisely in the location of a trade prone route in the South China Sea.

A domestically developed underwater glider set a new world record by reaching a depth of 6,329 meters, breaking the previous record of 6,003 meters held by a U.S. vessel, according to the Chinese Academy of Sciences.

Furthermore, this underwater glider drone named Haiyi, which means sea wings in Chinese language (海逸), went underwater aboard the deep-sea submersible mother ship Tansuo-1 (坦索1) during a mission in the Mariana Trench in early July 2017.

Although oceans cover about 71 percent of the Earth, many parts, especially deep-sea areas, are still unexplored. By reaching 6,000 meters, Haiyi allows Chinese scientists to explore 97 percent of the maritime territories.

Haiyi, developed by the Shenyang Institute of Automation under CAS, is used in monitoring vast areas of the deep-sea environment, such as seawater temperature, salinity, turbidity, chlorophyll, and oxygen content.

During the recent mission, Haiyi dived down 12 times and traveled about 130 kilometers, collecting high-resolution data for scientific research.

The underwater glider, which carries lots of detectors, has a simple cylindrical body, with two small wings making it look like a small plane, and a long tail, plus an antenna to send signals to drone country-maker.

Different from other underwater robots, the glider does not have a propeller but uses a different method to move in the water. In its body, there is an oil bag that works like a fish bladder and a moveable battery.

The glider also has a special coat made of light carbon fiber material to protect it from the huge pressure in the deep sea. When it glides down to 6,000 meters, the pressure could reach 60 MPa, which is similar to holding 60-tons of weight on your palm.

Based on China Daily, in Oct 2014, Haiyi swam 1,022.5 kilometers nonstop in 30 days during a test, setting a record in China for the longest time and distance covered by an underwater glider.

The underwater drone found in Indonesia is similar to a missile and is a type of sea-glider. This object is made of aluminum along 2.2 meters with two wings and a 93-centimeter long antenna. There is also an instrument similar to a surveillance camera on the body of the tool.

From 2018 to 2021, the escalation of tensions in the South China Sea is still happening, triggered by rivalry and friction in the ambition of expanding the interests of China VS the United States.

These Sea-gliders are usually used by the producing countries for the benefit of the underwater research of the producing countries. This underwater drone can dive to a depth of 2,000 meters. In the sea, this type of drone can record data on temperature, salinity, and direction of seawater currents, oxygen levels, sea fertility, and the sound of fish. The data collected is then sent via satellite when this underwater drone appears above sea level. The device is estimated to be able to withstand deep-sea surveillance operations for up to two years or seven hundred and thirty days.

These underwater drones are widely used to search underwater oceanographic data and are also used for various national interests of producing countries, both for industrial purposes and strategic military interests.

For industrial purposes, underwater drones can be used for various offshore drilling activities to search for marine resources.

Meanwhile, for strategic military defense purposes, this underwater drone is operationalized in finding water depth points and detecting seawater concentrations, thus, submarine operations cannot be easily detected by sensors of warships above sea level.

This unmanned underwater vehicle (UUV) is indeed included in the category of underwater research tools. UUV was found in a non-functioning condition, but it has not expired. There are internal technical obstacles in this underwater drone operational system.

It is estimated that the UUV already has an operational dive time of more than 25,000 hours or close to three years or 995 days. Most likely this underwater drone began operating in November 2017.

Never underestimate the case found in Selayar Islands, which are most likely the underwater drones produced by the bamboo curtain country. This type of underwater drone can be categorized as an unmanned underwater vehicle.

Until now there has been no official statement from the country that makes underwater drones that have been found to be in Indonesian territorial waters. It is particularly related to the aims and objectives desired by country maker production.

Obviously, the deliberate use of underwater drones in the territorial waters of other countries is categorized as an instrument to support spying and intelligence activities.

In fact, in the world of modern intelligence, various tactical and strategic instruments are deliberately used to operate in silence without arousing the suspicion of other countries. All attributes relating to certain country affiliations are intentionally omitted. The goal is not to be exposed and not easily accused by other countries when the instrument has been discovered.

If the state being spied on is an intelligence agent from a certain country that is carrying out intelligence operations, the sending country will never acknowledge the intelligence operational activities in order to maintain good relations between governments.

Indonesian public is eagerly very much waiting for the findings by the Indonesian Navy on the operation of foreign countries’ underwater drones. Indonesia must continue to strengthen national defense and improve the quality of the sea, air, and land defense.

The Indonesian government must be vigilant and ready to respond to the intelligence activities of major countries that deliberately carry out spying operations in the South China Sea area which must be responded to and anticipated.

In the midst of the spread of a new variant of the COVID-19 outbreak, in observing the dynamics of international relations in the South China Sea, it is necessary to become a concern and a policy priority by Indonesia that ‘Lupus est homo homini, non homo, quom qualis sit non novit’ or known as ‘homo homini lupus’ (drama entitled Asinaria by Titus Maccius Plautus, 254-184 BC), is real. Where, humans (country) are not humans (countries), but wolves for others, who are ready to prey on and rule at any time.

Neither friend nor foe lasts longer than the achievement of ambitions and interests in the international system.

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.

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.