Britcham Indonesia - Economy permeates foreign policy priorities

Economy permeates foreign policy priorities

By : Dian Septiari and Apriza Pinandita

Source: The Jakarta Post


Indonesia’s diplomatic corps will further sharpen its focus on economic activities, Foreign Minister Retno LP Marsudi announced on Tuesday, as she pledged a revamp of human resources management and asserted her leading role in coordinating efforts amid global challenges that have increasingly taken on an economic bent.


Economic diplomacy remained the ministry’s number one priority, Retno said as she revealed the direction of Indonesia’s foreign policy for the next five years in her first official press statement after being reappointed last week.


The priority programs, announced under Retno’s signature “4+1 formula”, comprise policies that the minister previously laid out during her annual foreign policy address at the beginning of the year, with the only addition being structural reforms.


The other foreign policy priorities are protecting Indonesians abroad, maintaining the nation’s sovereignty and integrity and expanding Indonesia’s role on the regional and global stages.


The new policy directives were set up just as the World Bank and the International Monetary Fund slashed Indonesia’s economic growth projection amid intensifying global risks, including from the escalating trade war between the United States and China.


“The Foreign Ministry will continue to strengthen the infrastructure for diplomacy and train diplomats to become reliable and of high quality,” Retno said in her address, while emphasizing that the ministry would undergo bureaucratic reform in order to meet the challenges.


On the economic policy front, the minister said Indonesia would make use of its main bargaining points — its large population and domestic market — while continually seeking out nontraditional markets including those in Africa, Latin America, South Asia, Central Asia, the Middle East and the South Pacific.


She said the ministry would push for more partnerships between Indonesian state-owned companies and stakeholders from African countries through investments in infrastructure projects and trade of goods and services.


Indonesia would also speed up various forms of trade negotiations with other countries — from comprehensive economic partnership agreements (CEPAs) and free-trade agreements (FTAs) to preferential trade agreements (PTAs) — and increase the promotion of trade and investments.


It would also seek to better promote the halal industry and double down on efforts to boost the export of top commodities, while also increasing global market access to the lower-middle class through the development of a digital economy.


Indonesia would keep protecting strategic commodities such as palm oil, Retno said, and firmly refuse “any kind of discrimination toward the commodities because it could threaten the needs of many consumers all over the world”.


Part of that strategy would be to revamp the diplomat education system by putting more emphasis on economic expertise, she added.


The ministry would also increase the number of diplomats with legal backgrounds so as to support the country in trade and border negotiations as well as assist overseas citizens embroiled in legal disputes.


The move comes in response to criticism from experts, including Yose Rizal Damuri, lead economist at the Jakarta-based Centre for Strategic and International Studies, who argued recently that the diplomatic corps must improve its institutional capacity to be able to focus more on economic diplomacy.


Yose said the recent appointment of Mahendra Siregar as deputy foreign minister in charge of economy-related policies was a step in the right direction, but insisted that organizational improvements should follow.


However, despite the new mandate of her new deputy, Retno asserted her central role in coordinating all economic diplomacy efforts.


“When the deputy ministers were appointed, I think it was clear that the President had assigned the foreign minister to coordinate economic diplomacy. We know that we cannot work alone, so with the additional duty of coordinating efforts, the Foreign Ministry will cooperate more intensively with other ministries and agencies,” she told reporters after her speech.