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WORLD | 14-10-2022 15:58

Indonesia seeks to capitalise on G20 Summit

Emerging powerhouse nation of 275 million ready to assert itself on the world stage as global leaders prepare for Bali meeting.

On November 15, the heads of the world’s most powerful economies will convene in Bali, Indonesia, for the 17th annual G20 Leaders Summit. Normally, the occasion serves as an opportunity for heads of state and key cabinet ministers to bump shoulders and shake hands in what can appear to the outside world to be nothing more than a 48-hour photoshoot. Against the backdrop of war in Ukraine and paralysing barriers to global trade, however, the outcome of this year’s conference is critical. 

The presidency of the organisation was officially ceded by Italian Prime Minister Mario Draghi to Indonesian President Joko Widodo at last year’s summit in Rome. In the intervening months, the Oceanic powerhouse of 275 million has sought to use the position to showcase its achievements in democratic reformation and economic modernisation, while promoting multilateral solutions to issues of global trade and security. “Recover Together, Recover Stronger” has been adopted as the summit’s motto.

Indonesia and Argentina have enjoyed strong relations since their adoption of formal diplomatic ties in 1956. Today, the Republic of Indonesia is Argentina’s fourth-largest Asian export market, with soybeans comprising the bulk of trade — though as Indonesian Ambassador Niniek Kun Naryatie observes in an interview with the Times, the rapidly developing island nation may soon have a much more consequential relationship with Argentina, and the entire global community.

 

Argentina maintains close economic and diplomatic relationships with a range of Asian nations. In what ways is Indonesia an especially important partner?

To answer that question, you have to first consider the size of Indonesia, and I don’t just mean area or population. You have to go beyond that. You also have to take into account Indonesia’s political, economic, and cultural conditions. When all of these factors are viewed comprehensively, it’s clear that Indonesia is Argentina’s most important partner in Southeast Asia. Not only does Indonesia have more than 270 million people, but we also have a huge middle class. Thanks to this fact, Indonesia is expected to be the fifth-largest economy by 2030. The country consistently records a high positive economic growth rate, which is due to its openness and the fact that we have so many trade agreements. If you’re an Argentine looking to open up a lino business in Indonesia, for example, you would have access to all of the Association of Southeast Asian Nations (ASEAN) trade bloc, and also to other markets through the Regional Comprehensive Economic Partnership (RCEP), which includes 15 members. 

There’s also political predictability and continuity in Indonesia, which makes it very easy to partner with. Since the reformation in 1998, the country has been a stable democracy with smooth transfers of power, something that is very rare in the region. And this continuity is something that is reflected in our foreign policy, which is always focused on humanity and collaboration — for the peace, security and prosperity of the world, not only for Indonesia. Having this approach to foreign policy, regardless of government, makes us a bridge-builder for conflicts in the region, and around the world. For all of these reasons, Indonesia is a very valuable partner.

 

Soybeans are the largest export Argentina provides to Indonesia and this dominates discussions of trade. Are there any other exports that you think should play a larger role in the trade relationship between the two countries?  

Argentina is an agricultural country, so of course we import soybeans in huge quantities. But you also have to look beyond this single product to expand the relationship, which can be done by helping us develop our own agricultural sector. For example, Argentina produces excellent agricultural machinery that could be used to help Indonesia utilise its vast land resources for crops and animal feeding. Of course, Indonesia has a different climate that favours crops like oil palms over soybeans, but Argentina’s superior agricultural technology would still be helpful in developing Indonesia’s agricultural industry.

Apart from that, Argentina has another resource that is greatly needed in Indonesia: lithium. Currently, Indonesia is looking to expand its battery manufacturing capability. Our manufacturers have all of the other ingredients they need, but they don’t have enough lithium. I think there are opportunities for Indonesians and Argentines to use the country’s lithium resources in a way that benefits both sides.

 

What goods or services do you think Argentina could be buying more of from Indonesia?

Indonesia is a major exporter of appliances and automotive parts, both products that Argentina needs. Argentina manufactures cars domestically, but there is still a demand for the spare parts that Indonesia is so good at producing.

There are commodities like coffee and chocolate that are major exports of Indonesia, not only in terms of quantity, but also in terms of quality. I really encourage Argentine businesses to import coffee beans, either green or roasted. Green beans can be roasted domestically in Argentina, using local expertise and according to local preference and demand.

There is also an opportunity for collaboration on infrastructure. For example, Indonesia is a major producer of train cars. We can help Argentina expand its rail infrastructure so that transporting goods by freight within the country will be much cheaper.

 

Global trade and security are expected to be two of the most important issues discussed at the upcoming G20 summit in Bali. How has Indonesia demonstrated leadership on these issues?

Everyone knows that this is a very challenging time for countries around the world. The upcoming summit is the most important forum for big countries, as well as emerging countries like Argentina and Indonesia, to discuss economic and financial issues of global importance. Because of the pandemic and the war in Europe, there are crises all over the world. Inflation is high. Production capacity is down. By focusing on these issues, Indonesia has been able to set an important theme for the meeting: “Recover Together, Recover Stronger.” These are only four words, but they hold deep meaning.

To overcome these challenges, we need to build global cooperation. Recovery efforts can’t just come from the strongest, largest nations. Every country needs to be able to chip in, and Indonesia has shown this can be done.

Indonesia’s president attended the G7 meeting in Berlin, where he was listened to by some of the most powerful leaders in the world. Then, he travelled to Ukraine, and to Russia. Both of these countries are our friends, so we try to contribute by being a broker of peace. We try to communicate that if the war continues, there will be consequences all over the world. The transportation of commodities has been blocked, and critical resources – things like fertiliser that Argentina needs – are more expensive.

In addition, Indonesia has championed the COVAX agreements that have allowed for richer nations and pharmaceutical companies to provide vaccine resources to nations that otherwise would not be able to afford them. We call it “vaccine diplomacy” and it’s just one of the ways Indonesia has demonstrated leadership in the global recovery.

 

Indonesia and Argentina are both emerging middle-power nations. In what ways does that commonality strengthen their diplomatic relationship?

The commonality between Indonesia and Argentina is like that of siblings. Long before I first extended the invitation to President Fernández to attend the G20, we have had the support of Argentina. This support exists because Argentina supports the theme of recovering together and recovering stronger.

Argentina has also demonstrated support for the three specific priorities outlined under the Indonesian presidency of the G20: advancing our global health architecture, facilitating the digital economy transformation, and guiding the global energy transition. These three pillars are very important for both our countries, and for developing countries more broadly.

If you consider the digital economy, for example, it is always the global superpowers who win because they are the ones who set the rules. We have to change this so that the transformation is inclusive and benefits developing countries like ours. We agree on this, and we support each others’ positions. We have a louder voice when we speak together.

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Sam Forster

Sam Forster

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