Lack of Infrastructures: A Barrier to Indonesia-Philippines Trade

On a clear day in mid-1947, RI-002, a Dakota C-47 aircraft, then the star of the fledgling Indonesian air force, landed at the Nielson Airport in Makati, Philippines with a load of quinine and vanilla owned by the Siliwangi Division. This was the first official export of Indonesia to the Philippines in the 20th century.

The aircraft was a US World War II military surplus bought with the savings of the former American serviceman who piloted the aircraft, Robert Earl Freeberg. The leader of the plane’s Indonesian crew, Petit Moeharto Kartodirdjo, who would later serve as Indonesian air force attaché to Manila, and would later join the PRRI rebellion, passed himself off as the co-pilot, although he had yet to learn how to fly.

The Dutch consul in Manila instigated the confiscation of the shipment and the arrest of the pilot and crew. But they were bailed out by Filipino sympathizers, notably Mindanao political firebrand Salipada Pendatun. Eventually a Philippine court ordered the release of the shipment. There was a ready buyer and the money, perhaps a few hundred pesos, went into the war chest of the Indonesian revolution.

Not as dramatic was the start of diplomatic relations between the two countries. Sixty-five years ago this week, the Philippines opened a consulate in Jakarta. The anniversary would pass unnoticed if not for the efforts of Philippine embassy chargé d’affaires Robert Manalo, commercial attaché Alma Argayoso and their colleagues to ensure that the event isn’t unremembered and unsung.

They’ve organized activities to promote economic exchange between the two countries, which, incidentally, are regarded as the two most promising economies among the members of Asean.

Earlier this year, Southeast Asia expert Karen Brooks rhapsodized, “Giant Indonesia soared during the last half decade, boasting high growth, low inflation, an extremely low debt-to-GDP ratio, strong foreign exchange reserves, and a top performing stock market. But it is the Philippines, the region’s other archipelago, that is now providing the biggest upside surprise. The Philippine economy expanded by 6.6 percent in 2012, and was among the fastest growing economies in the world in the first half of 2013, expanding by 7.6 percent.”

Recent stats, however, are sobering. The Indonesian economy grew by 5.0 percent in the third quarter this year, the slowest in five years and down from the second quarter growth of 5.1 percent. The Philippines fared better with a 6.4 growth in the second quarter. Both economies, marked by high rates of poverty, are vulnerable to global trends of a trade slowdown and a rise in interest rates.

It would help both if they traded more with each other. According to commercial attaché Argayoso, last year this amounted to $3.62 billion, with Indonesia enjoying a significant balance of trade advantage.

Actually the value of Philippine imports from Indonesia is more than three times that of its exports to this country. On investment relations, there’s not much speak of either. In sum the reality is but a small fraction of the potential.

There’s talk about the products of both countries being so much the same that trade can’t grow. That’s barking up the wrong tree. In fact between the two, there’s such a dearth of infrastructures that not much trade is possible.

In contrast, Indonesia’s economic relations with Malaysia, Thailand and Singapore are served well enough by existing infrastructures. Hence, the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) is so much ahead of the Brunei-Indonesia-Malaysia-Philippines East Asean Growth Area (BIMP-EAGA).

President Joko Widodo has pledged to go on an infrastructures building spree that will boost economic activities in all Indonesia, including the eastern part that borders the Philippines. Here’s hoping the Philippines does something similar at its southern backdoor.

Lack of infrastructures is a nasty economic disease. But it’s nothing that political will to invest can’t cure.

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By Jamil Maidan Flores Posted in El Indio

A Template for the Crafting of Foreign Policy

My impression is that even during the New Order era, there was never a lack of debate on foreign policy. In seminars, media and think tank people often expressed views that didn’t support those of the foreign ministry. In the ministry, diplomats brought competing ideas to the attention of their superiors.

The debate eventually rose to the level of the directors-general vying for the approval of the foreign minister.

Worth a revisit is the crafting of a policy on Timor-Leste when it was still Indonesia’s 27th province. At a late stage of the process, there was a three-way debate on the issue of East Timor involving Nugroho Wisnumurti, then the country’s permanent representative to the UN in New York; Hassan Wirajuda, then Indonesia’s permanent representative to the UN in Geneva; and then foreign minister Alatas himself.

Each of them had an “intellectual constituency.” Nugroho spoke for all who took a legalistic approach to the issue of East Timor; Hassan advocated a more pragmatic approach, which he would later on call the “policy approach”; while Alatas took the middle ground. After much discussion, Alatas assigned Hassan to draft the policy paper on East Timor.

Hassan then wrote a policy paper following a format he learned in graduate school. The first part consisted of the history of the issue—not a detailed one but certainly a comprehensive history that includes a consideration of the various sub-issues (human rights in East Timor, for example).

This was followed by an analysis of the current situation, the challenges and the opportunities and “trends” emanating from it. A trend is a series of probable events from the current situation to a future one, considering the impact of the regional and global environments. Out of this analysis and consideration of the trends, five policy options were developed.

The first option was essentially for the status quo. Had this been chosen, Indonesia would have simply insisted that East Timor remained as Indonesia’s 27th province, and that was it. The second option was for the early holding of a referendum on the political destiny of East Timor, and if through this referendum the people of East Timor chose to separate from Indonesia, the separation would be carried out in orderly fashion.

The third option was for wide ranging autonomy to be granted to East Timor and after seven years, a referendum would be held in which the people of East Timor would decide whether to remain or to separate from Indonesia. Meanwhile the Indonesian government would try to win the hearts and minds of the East Timorese so they’d vote to stay with Indonesia.

The fourth and fifth options were variations of the third. The option recommended was the third. The rest of the paper dwelled on how this option could be carried out successfully.

The third option, although initially adopted by the Indonesian government, was not fully carried out. In the midst of the Asian Crisis of the late 1990s, President Suharto stepped down and his successor, Bacharuddin Habibie, took the second option.

The point is that if a debate on foreign policy could take place under authoritarian rule, there should be more of it in a democratic Indonesia. During the transition to democracy, Hassan Wirajuda, who had become foreign minister, could finally expand the debate to include other stakeholders—members of parliament, the media, the academe, the youth, etc—through “foreign policy breakfasts” and other forms of consultation.

The practice has since been discontinued, but I understand that the new foreign minister, Retno LP Marsudi, intends to revive it. That’s good news to foreign policy buffs in Indonesia.

The more views brought into the debate, the greater will be the public support for the resulting policy. It will then be a people-driven foreign policy.

By Jamil Maidan Flores Posted in El Indio

Summits Are a Hassle but Can We Live Without Them?

The great sucking sound that people in Jakarta heard last week was no cause for alarm. It was just the diplomatic community heaving a collective sigh of relief on receiving news that President Joko Widodo decided to attend the G-20 summit in Brisbane, Australia after all.

So this week, the president spends time attending three summits: first, the Apec Economic Leaders’ Meeting (AELM) in Beijing; then the 25th Asean Summit and related summits in Nay Pyi Taw, Myanmar; and finally that G-20 summit in Brisbane.

The word is that the president hesitated about going to the G-20 summit because he doubted if he could bring home anything concrete from the meeting that would redound to the benefit of the Indonesian people.

But all’s well that ends well: he changed his mind and decided to go. That’s great not only for Indonesia but also for the rest of the world. As former Indonesia Investment Coordinating Board Chairman Mahendra Siregar explained in a seminar of the Foreign Policy Community in Jakarta last week, the G-20 needs Indonesia as badly as Indonesia needs the grouping.

I’ve had the privilege of closely observing the first four summits of the G-20 and I am convinced that there’s no voice in that forum as strong and limpid as Indonesia’s in advocating uninterrupted financial flows for development. Nor is there a voice more passionate than Indonesia’s in calling for reform of the international financial architecture.

During those early summits the G-20 brought forth a massive stimulus of $1.1 trillion, decided to reform IMF quotas and corresponding voting rights, delivered the world from the plague of protectionism, took action against tax havens and set up the Financial Stability Board.

In each of these collective efforts, Indonesia was there punching for the twin causes of reform and development. It was Indonesia that sought and got a place for Asean at the G-20 table.

Observers say the G-20 is no longer as potent as it used to be. That well may be. But it can have a second wind. The G-20 finance ministers and central bank governors have been putting together a set of measures that would plug the tax loopholes that many multinationals are now enjoying with impunity. That just might work.

Every G-20 member is bringing to Brisbane concrete action plans for boosting economic growth. The idea is to achieve two percent increase in the global GDP that will translate into “tens of millions of jobs.” That’s always worth a try.

Meanwhile, at the level of the Indo-Pacific region, Apec is launching initiatives to cut red tape on business licensing and on the movement of goods across borders, to close the Internet development gap, to fight corruption, to promote the trade on clean energy. And, yes, also to foster maritime cooperation. Those are the very things that Indonesia wants.

As to the Asean and Asean-related summits in the middle of this week, we know that the fiercest cavil against Asean comes from circles in Asean countries. There are also valid criticisms. But as the Philippine ambassador to Asean, Elizabeth Buensuceso, once quipped, “Try living without Asean!”

Myanmar once thumbed its nose at Asean democratic values. Since then it has learned that such smugness isn’t profitable. It’s now doing a fine job as Asean chair.

In the Asean summits this week, Indonesia can push for greater economic integration, a more robust maritime cooperation and more zip in the snail-paced consultations toward a Code of Conduct in the South China Sea—to name a few of its neighborhood concerns. Without Indonesia pushing for these concerns, Asean, infuriatingly, won’t move any faster.

That’s what summits are for. They’re expensive. Inconvenient. But without them, in this interdependent world, nothing much will move.

By Jamil Maidan Flores Posted in El Indio

The IS Siren Song Online title: Drown Out the IS Siren Song with a Clarion Call by Jamil Maidan Flores

In that wide swath of land that straddles the border between Iraq and Syria, some 31,000 jihadists are fighting under the black banner of the so-called Islamic State (IS).

Some 15,000 of them are foreign fighters from 80 countries, mostly European. As of early this year, they included some 200 Malaysians, 100 Indonesians and dozens of Filipinos.

These are estimates, of course, but there’s little disagreement on their accuracy, give or take a few hundreds. Give or take a few scores, in the case of the Southeast Asian fighters.

Most of them are young, some with a bright future ahead of them. In spite of air strikes by the US-led coalition that kill hundreds of them in a single sortie, they increase in number every day. In the United Kingdom alone, as many as five young Muslims leave everyday to go Syria and fight under the black banner.

In Indonesia, authorities say they’re disrupting the travel plans of would-be IS jihadists. They’re choking the flow of terrorist funds. Yet there’s reportage that some militant factions have sworn allegiance to the IS.

What makes the so-called Islamic State, a blood-drenched mockery of a caliphate, such a strong magnet to idealistic young fighters?

There are the usual suspects: the collective memory of the humiliation that Muslims have suffered in the hands Western colonizers in centuries past, the sense of injustice and the discrimination that Muslims are enduring today in the Western world. The persecution of the Palestinian people, which up to this day stirs deadly resentment all over the Muslim world. The roughness of border guards, the indignities inflicted by security personnel. And the need for a sense of identity that can only be satisfied by belonging to a mighty and overwhelming movement.

But why the Islamic State particularly and not the rest of the jihadist groups? Maybe it’s because the IS has cultivated an image of itself as effective, disciplined, committed and marching inexorably toward world conquest. Through sophisticated use of social media and dramatic show of cruelty, it has created a bandwagon effect that attracts not only new recruits from around the world but also defectors from the other jihadist groups already fighting in Iraq and Syria.

The explosive violence of the IS has imbued it with the seductiveness of pornography. It offers to the would-be jihadists the ultimate worldly adventure: the license to indulge in an orgy of carnage and, at least in the case of the male fighters, to wallow in sexual promiscuity with divine permission.

It also offers the ultimate impunity: the jihadist killed in battle goes straight to heaven to enjoy the ministrations of 72 voluptuous virgins. What’s there on social media today that can beat that promise?

The IS may never be defeated until there’s an effective counter-message to its siren song. That message can’t come from the West. It must burst from within Islam, and ride on the voices of decent Muslims everywhere. It would be a pale and futile message if it only said, “Don’t go to Syria.”

It must therefore be a recruiting message. A clarion call to an activity, a movement that requires a new kind of Muslim heroism. Perhaps community work for the poor? A Muslim Peace Corps? But the message must match the sophistication and passion of IS propaganda.

In Indonesia and other Asian countries today, there’s talk of Meaningful Broadband, a program that would bring the force of the Internet into the service of development. There’s nothing more meaningful that broadband can carry than one that’ll reach out to the hearts and minds of the Muslim youth.

It’ll take a great deal of resources, organization and sophistication. And a constructive alternative to fighting in Syria. It’ll take these to drown out the siren song.

By Jamil Maidan Flores Posted in El Indio