Editions : October-December 2015

JOURNAL | POINT OF VIEW By: Beginda Pakpahan

There has not been a whiff of solid global governance since political and economic power began shifting from the West to the East during the past decade. Global economic growth is now driven by the Asia-Pacific region. China, India, South Korea and the 10 countries of the Association of Southeast Asian Nations (Asean), among others, have enjoyed rapid development, rising economic growth rates and the inflow of capital, as the United States worked to come out of its economic malaise – which it has – and the European Union faced, and continues to face, a crisis in the euro zone.

It should not come as a surprise, therefore, that Washington shifted its attentions from its historic trans-Atlantic relationship to the Asia-Pacific through the Obama administration’s “rebalancing” policy, with a key focus on both economic and security issues.

Indonesia occupies a unique place within this new landscape as a large, emerging economy with a young population. So how can Indonesia contribute to regional and global governance in our multipolar world, and how should it act?

This essay argues that Indonesia should strategically push Asean to be an axis of symmetrical interests when dealing with major countries in Southeast and East Asia, and globally. Indonesia can combine its role as the unofficial leader of Asean with its previous efforts to be involved in regional and global initiatives and institutions, including the G20 and the United Nations.

President Joko Widodo is pushing a policy of Indonesia as a “maritime axis,” projecting the country as a driver and focal point for development between the Indian and Pacific Oceans. This could help Asean as an axis of symmetrical interests via cooperation with external partners in Southeast and East Asia and beyond, and enable Indonesia to help shape new global governance.

A central player?

It should be beyond debate that Indonesia must maintain its “free and active” foreign policy as a foundation of its international relationships. The country can consolidate its economic and political capital within the G20 and other international organizations, and be a consensus builder and bridge between the interests of developed and developing countries.

For example, Indonesia was an active player in the United Nations Framework Convention on Climate Change (UNFCCC) and took part in governance reform within the International Monetary Fund and in the development of a domestic global regulatory framework within its own Ministry of Finance.

Indonesia has actively helped to shape a new economic architecture by boosting the financial resources of the IMF. Indonesia contributed around $1 billion to the IMF to help boost its financial capacity in dealing with the global financial crisis several years ago. Additionally, Indonesia announced its developmental agenda within the G20 and could promote cooperation between developed and developing countries to reduce income disparity and inequality. Indonesia is also an active player in pushing for a new protocol for emissions reductions under the UNFCCC by 2020 and the promotion of green business.

Empowering Asean

Indonesia can influence its Southeast Asian partners to shape Asean to be an axis of symmetrical interests. It means that Indonesia and other Asean countries can use the regional grouping for cooperation between it and its external partners, including China, Japan, the United States and Australia. Indonesia is seizing its role and opportunities within Asean through an assertive agenda. 

Indonesia can use its capabilities to strengthen Asean and lead crucial initiatives to cooperate with the region’s external partners on a symmetrical basis. For example, Indonesia influenced an Asean foreign ministers meeting in Brunei to encourage China to discuss a code of conduct in the South China Sea, a progressive diplomatic step. As a core interest, Indonesia can try to influence Beijing to solve the divisive territorial disputes between China and Asean members Malaysia, Vietnam, the Philippines and Brunei in the South China Sea and support the creation of the code of conduct.

Indonesia can propose that China and the claimant Asean countries agree to joint sovereignty on their overlapping claims and establish a joint council on managing and monitoring them. Within this joint council, they can discuss and negotiate joint development and exploration activities. They can arrange collective monitoring and patrols to preserve peace and secure sea lines of communication in Southeast Asia.

Across many decades, Indonesia has been a neutral mediator through Asean, most recently between Thailand and Cambodia in dealing with the Preah Vihear temple dispute. Thailand and Cambodia had bloody military clashes in 2011 over the temple complex along their joint border, which an international tribunal had ruled back in 1962 belonged to Cambodia. Indonesia reduced tensions through mediation and an on-the-ground monitoring program.

On the economic front, Indonesia could attempt to persuade fellow Asean countries to remain open to the establishment of a consensus on the proposed Regional Comprehensive Economic Partnership. The China-backed RCEP is competing with the Trans-Pacific Partnership, backed by the United States, with Singapore, Malaysia, Brunei and Vietnam willing to negotiate with Washington.

Indonesia, if the Joko administration chooses, could try to convince fellow Asean members that the RCEP is more important for the region’s economies than that American-backed partnership. Having coherence and centrality regarding the RCEP would avoid fragmentation within Asean, and it is essential for Indonesia and Asean to reach a workable consensus regarding the RCEP before they negotiate with external partners. The RCEP would allow Asean members to trade with China, Japan, Korea, India, Australia and New Zealand, possibly creating the largest free trade area in the world. The RCEP could accelerate the flow of investment into Asean countries by harmonizing investment regulations and improving infrastructure.

In December 2014, China’s economy surpassed that of the United States based on purchasing power parity: $17.6 trillion to $17.4 trillion. Two months earlier, the Asian Infrastructure  Investment Bank (AIIB), initiated by China and supported by Asian countries, was established in Beijing. It is seen as a financial rival to the Japan-led Asian Development Bank and the US-dominated World Bank.

Interestingly, American allies Britain, France, Germany and Italy signed on as founding members of the AIIB in March 2015, and Australia and South Korea have applied to join. As of June, there were 57 prospective founding member nations of the AIIB. This erodes America’s sphere of influence in the Asia-Pacific region because its allies and commercial partners have joined the AIIB. There are significant implications for this economic shift and distribution of power among global and regional actors in the new international landscape – including for Indonesia and its neighbors in Southeast Asia.   

But it also includes possibilities. Indonesia, which chaired and hosted the Asia-Pacific Economic Cooperation (APEC) forum in 2013, could be a crucial economic and political bridge between Asean and the rest of the Asia-Pacific. Seven Asean countries are members of APEC, however, Cambodia, Laos and Myanmar are not. Indonesia can be a liaison between them and the other APEC economies. Additionally, Jakarta could propose development projects within the shared region between Indonesia and Western-Pacific nations. The forthcoming Asean Community could help accelerate and deepen cooperation among the region’s countries and its neighbors.

Window of opportunity? 

With achievements gained and future challenges, Indonesia has contributed and can continue to contribute positively to global governance. The involvement of Indonesia in global financial reform through the G20, its participation in the creation of global environmental governance and its active involvement in the Asia-Africa Conference and the Asian-African Strategic Partnership are concrete examples of the country’s contributions to shaping a new brand of global governance. President Joko addressed several crucial points in global governance during his speech at the opening of the 60th Asian-African Conference in Jakarta in April. He urged reform within the United Nations and global financial institutions, the creation of a new global economic order and interregional cooperation between Asia and Africa against threats of violence, conflict, radicalism (for instance the Islamic State in Iraq and Syria) and drugs.

Interestingly, Joko’s maritime axis vision emphasizes Indonesia as the driver and focal point for new development in the Indian and Pacific Oceans. The vision has five pillars for rebuilding Indonesia’s maritime culture, given its 17,000 islands. Among them, Indonesia seeks to preserve and manage its sea resources based on sovereignty over sea-based food products. Second, it will build infrastructure and develop maritime connectivity by establishing sea tolls and deep-sea ports, and improving its shipping industry, logistics and tourism. Third, Indonesia will exercise maritime diplomacy on sources of maritime conflict such as territorial disputes, illegal fishing, piracy, violation of sovereignty and sea pollution. Fourth, it will strengthen its maritime defense power to protect its territory.

Additionally, the development of Asean itself as an axis of symmetrical interests is important for Indonesia because it urges the grouping to position Southeast Asia as a neutral regional stabilizer. Indonesia must lead Asean countries to concretize an agenda to deal with regional challenges and shape the evolving regional architecture in Southeast Asia. This, hopefully, will mutually reinforce Indonesia’s maritime axis vision. There is a window of opportunity for Indonesia to be a regional player and, eventually, an Asian powerhouse.

 

 

Beginda Pakpahan is a political and economic analyst on global affairs at the University of Indonesia. The views expressed here are his own. 

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