Good days await Indonesia
Good days await Indonesia. In the continent of Asia, various countries are grappling with small and large crises and troubles: the political and economic crisis in Sri Lanka, the recent floods in Pakistan which have been a massive disaster, alongside the endless political conflicts that have practically paralyzed the country; the political tensions and oppressive dictatorship of the Myanmar military, and most importantly, the economic knots of China are the significant political and economic news of the world.
However, there is a country in East Asia that, despite various problems, some of which are naturally due to the international economic and health crisis following the spread of COVID-19, has caught the attention of experts and its achievements have strongly attracted notice. This country is Indonesia.
Two good years in international politics
The years 2022 and 2023 have been and will be the years of Indonesia’s prominence in international politics. Indonesia holds the presidency of the G20 and will host the major summit of the heads of member countries of this group in Bali this year. This position might initially seem merely formal and artificial, but in fact, considering the hosting of the G20 summit and the presidency of this group during this period, it has provided a remarkable opportunity for a country like Indonesia.
To include its desired demands and programs, and specifically topics related to its interests, in the research, policymaking, and especially the negotiations of the G20 countries. The finance and economy ministers of the G20 countries will discuss topics in their meeting where Indonesia’s intentions and goals will have a special place. As the rotating president of the G20, Indonesia has already become influential.
Joko Widodo, the president of this country, was the first Asian leader to travel to Ukraine in June as the head of the G20 and conducted important negotiations with the Russians and Ukrainians to create the groundwork for ending the war.
One of the specific and interesting issues for a country like Indonesia, which is a collection of islands, is its struggle with the serious consequences of climate change. Like other countries with similar geographical features, Indonesia must simultaneously address the problems arising from changes in rainfall patterns, the intensity of droughts, and the severity of rainfall and floods, alongside the rising sea levels threatening the islands. Strengthening international climate change policies is vital for a country like Indonesia, and it will certainly pressure other G20 members on this issue.
Next year, Indonesia will also take over the presidency of ASEAN, which is a leading position in one of the most important economic and political cooperation organizations in Asia and the world. In a situation where political and economic interactions in East Asia are more influenced by the US-China rivalry than ever, countries like Indonesia dream of a golden opportunity like the rotating presidency of ASEAN and exerting influence on the organization’s policies.
Indonesia’s unique conditions and strategic position in maritime trade interactions have given this country a powerful status. This factor, in itself, is a prominent advantage in interactions with China, the world’s key exporter, and next year, with Indonesia’s presidency of ASEAN, the country’s weight in East Asian political and economic interactions will increase.
Indonesia’s major economic achievements are attractive
Indonesia’s economic growth in the second quarter of 2022 has been enviable. Indonesia’s gross national product recorded a good growth of 5.44% during this period, exceeding the highest predictions about the country’s economy. The growth rate compared to the first quarter of the current year was also 3.72%, which has been a pleasant surprise for Indonesia’s economic experts.
Indonesia has adopted one of the most interesting and attractive economic and trade policies in the production and export of goods over the past two years. By implementing specific and stringent policies on the export of vital goods such as coal and palm oil, the country has influenced the global market and demonstrated its power.
With rising prices and increased exports of processed goods, Indonesia adopted a serious policy of moving away from raw material sales and significantly increased its income. The restriction on the export of raw palm oil and the seriousness in producing final processed goods domestically brought more revenue to Indonesia and also affected the US market.
With the determination of President Joko Widodo’s government, Indonesia decisively pursued the policy of maximizing domestic production and gained significant achievements. This golden and key point has recently captivated many experts and policymakers. Other Asian countries have been inspired by Indonesia and have adopted or will soon adopt similar policies, with Malaysia being one of them.
Rising regional credibility of Indonesia as an economic hub
The economic powers of East Asia now consider Indonesia a relatively equal and serious partner. Indonesia has recently joined the regional trade cooperation agreements of East Asian and Pacific countries, which are agreements designed by the Chinese, and by utilizing them, it will increase the profitability of trade transactions with flexibility in import and export tariffs. Indonesia’s remarkable bilateral trade agreements with South Korea are a prominent example that will significantly improve Indonesia’s position as a partner of a giant like South Korea by eliminating the vast majority of customs duties.
The automotive industries, especially electric vehicles and extensive battery production networks in Indonesia, have found a special position that requires investment from other countries, and large amounts of investment from prominent Korean companies like LG have flowed into this country. Hyundai, as one of the prominent players in the automotive industry, has also found Indonesia a suitable place for large-scale investment.
Indonesia is experiencing an inflation rate of less than five percent, which is enviably low compared to many developing countries and has given the country’s central bank the ability to be flexible in policymaking. In these conditions, the government can more comfortably implement reform policies such as adjusting the large fuel subsidies paid to citizens. Although the news of a 30 or even 40 percent increase in fuel prices is still concerning for Indonesians, the conditions are such that enduring the pressure of such a price change will be easier for them than for other countries.
Indonesia’s production policy and a lesson for Iran
Economic and political analysts have addressed and are addressing the special policies of this country’s government in increasing production capacity and processing various products domestically from various aspects. It should be noted that for a long time, news of the ban on the export of specific raw materials from Indonesia to outside the country has been transmitted and often fades among other news.
The Indonesian government has pursued this policy seriously and step by step, and now the nickel production industry, as a key mineral in the production of batteries and other items whose market has heated up in these specific years after the COVID-19 crisis, is under the influence of Indonesia’s power. The ban on raw nickel exports has multiplied the capacity to attract domestic and foreign investment for this industry within the country.
Meanwhile, Iran, in particular, is losing the great advantage of maximizing processed copper production in the copper industry and is handing over its massive capital to the Chinese, who, more than having copper mines, boast a massive copper processing industry within their country and have gained immense wealth from this path. Iranian copper companies also do not have a transparent track record and spend their massive capital on sports and entertainment, which mostly appears as money laundering, and it is unclear how much tax has been paid by them in these days of sanctions and hardship for the Iranian people.
