Tuesday, May 28, 2024
Update At 10:00    USD/EUR 0,92  ↓-0.0007        USD/JPY 156,89  ↑+0.031        USD/KRW 1.362,68  ↑+2.91        EUR/JPY 170,46  ↑+0.155        Crude Oil 83,02  ↑+0.9        Asia Dow 4.014,53  ↑+28.24        TSE 1.780,00  ↑+6.5        Japan: Nikkei 225 38.849,58  ↓-50.44        S. Korea: KOSPI 2.726,74  ↑+3.75        China: Shanghai Composite 3.124,04  ↑+35.1721        Hong Kong: Hang Seng 18.827,35  ↑+218.41        Singapore: Straits Times 3,39  ↑+0        DJIA 22,07  ↑+0.02        Nasdaq Composite 16.920,80  ↑+184.795        S&P 500 5.304,72  ↑+36.88        Russell 2000 2.069,67  ↑+21.258        Stoxx Euro 50 5.059,20  ↑+23.79        Stoxx Europe 600 522,21  ↑+1.64        Germany: DAX 18.774,71  ↑+81.34        UK: FTSE 100 8.317,59  ↓-21.64        Spain: IBEX 35 11.325,50  ↑+79.5        France: CAC 40 8.132,49  ↑+37.52        

Indonesia´s ambassador to China says political stability the key to prosperity

Interview - December 20, 2012
Mr. Imron Cotan, Indonesia’s ambassador to the People’s Republic of China, says his country has taken an active role in regional politics because its leaders are convinced that the only way to assure continued prosperity is by attaining peace and stability, not only in Southeast Asia, but around the world

In an interview with Vista Reports, Mr. Imron says Indonesia has pursued these goals through its membership in ASEAN (the Association of Southeast Asian Nations), the G-20, the East Asia Summit and APEC  (Asia Pacific Economic Cooperation)  which Indonesia will chair next year.

“We always try to play a contributing as well as a mediating role in terms of international politics by trying to employ all of our strengths and resources in order to maintain stability as well as peace,”   Mr. Cotan says.

“We firmly believe that Indonesia can only prosper and excel into the future if and when we are able to provide and preserve an enabling environment in our region,” he adds.

Indonesia has long been known for taking a mediating role in disputes which have arisen in Southeast Asia, such as this year´s flare-up between China and several ASEAN member states over maritime claims in the South China Sea.  This positioning extends to Indonesia´s participation in larger forums,  such as APEC or the Group of 20 most industrialized nations. 

“We do this with the sole purpose of trying to secure peace and stability in the world, and hence, we will be able to provide prosperity to our people,” the ambassador explains.  “We are not just working for ourselves; we are working for the world.”

In the interview, Mr. Cotan also talks about Indonesia´s relationship with China, the growing trade in goods and services between the two countries and the opportunities for Chinese investors in the flourishing Indonesian economy. 

In particular, he mentions the huge infrastructure projects which have been set out as priorities in Indonesia´s MP3EI, Master Plan for Acceleration and Expansion of Indonesian Economy.

Indonesia is the biggest country in ASEAN, with a population of nearly 250 million. It has one of the fastest-growing GDPs, is a member of the G20, and of course, is a leader within ASEAN, in democracy building, environmental protection, security. It also has a significant position withinAPEC and the UN Security Council. Can you please share your views on Indonesia’s place in the world, specifically in terms of international politics and economy today?

As you mentioned, Indonesia is one of the biggest nations in the world, with around 250 million people. Indonesia is also the largest economy in the Southeast Asian region. We have an abundance of natural resources. We always try to play a contributing as well as mediating role in terms of international politics by trying to employ all of our strengths and resources in order to maintain stability as well as peace. First of all, we focus on our region because we firmly believe that Indonesia can only prosper and excel into the future if and when we are able to provide and preserve an enabling environment in our region. That is why we concentrate on fostering cooperation between and among ASEAN countries and then among ASEAN countries with our counterparts, our dialogue partners: first, China and ASEAN (ASEAN +1) and then ASEAN +3, the three being China, Japan and South Korea.

Then in a larger context, we are very active in preserving and promoting the stability and peace in our own region and indeed, beyond. We also firmly believe that we need to cooperate with the countries grouped in the East Asian Summit, ASEAN Regional Forum, Asia Pacific Economic Corporation and, of course, G20. We do this with the sole purpose of trying to secure peace and stability in the world, and hence, we will be able to provide prosperity to our people. Indonesia has always been active in promoting and contributing power to its own region as well as to the rest of the world. We have long abandoned any ambition to try to dominate the international discourse. We firmly believe that we can achieve our national interests and objectives by cooperating with and among nations around the world.

As a result of the current economic situation, the period we live in has been dubbed the “Asian Century.”  How is Indonesia poised and positioned to really take advantage of that?

We are very glad that Indonesia is part of that current dynamic. Leaders across the world have stated that, indeed, we are currently enjoying the Asian Century.

Recently, I was invited by a noted Australian think tank to try to give them a perspective, as to where Australia stands. They acknowledged certain facts like Australia should be part of Asia. The Australian society is well-positioned to act as a bridge between Western civilization and Eastern civilization. All Asian countries, including Australia, are enjoying economic growth, notwithstanding the crisis, better still with a positive outlook. This assessment has been confirmed by the noted international rating agencies, Fitch and Moody’s. They have issued statements underscoring the fact that Asian countries are enjoying economic growth with a positive outlook despite the fact that the world is still suffering from the lingering effects of the crisis.

So yes, we are proud to be part of Asia and we will continue to contribute to this positive development. That is why we really firmly believe that, along the way, we really need to synchronize our positions. I tend to argue that if we continue along this path of development, we will contribute a lot to the world’s efforts to cushion or mitigate the severe impacts of the crisis confronting us currently. So, conflicts or potential conflicts in this region should be resolved peacefully and amicably in order to maintain this momentum. We are not just working for ourselves; we are working for the world. I tend to argue that Asian is now the engine of the world economy so if we fail, the impact would be devastating. That’s why it is incumbent upon us to maintain momentum and to strengthen our efforts in order to pursue our economic and development programs.

It is against this backdrop that you should see Indonesia. Indonesia is trying very hard to play this role in order to maintain harmony, stability and an amicable environment in this region in hopes of continuing this positive Asian path.

What are Indonesia’s current foreign policy priorities and objectives?

The foreign policy objectives of Indonesia have always been the same. Since the inception of the republic, we have tried to protect the national territorial integrity of Indonesia. We would like to foster the welfare of our people and we would like to contribute to the maintenance of international peace and security.

In order to be able to do this, we need partners and I’m proud to say that we see China as a partner in peace as well as a partner in development. Why is this relationship important? In April of 2005 China and Indonesia signed a Strategic Partnership Declaration that has already been translated into a Plan of Action.  We use this as a milestone to let us know how best to proceed in order to deepen our relationship. This Plan of Action consists of three fundamental elements. We agreed to cooperate in the fields of politic, economic, and social and culture affairs.

Being the second largest economy in the world, after the U.S., China is part of the (world’s) solution. China is not part of the (world’s) problem and that is why we always mention that China is our partner in peace and development. China is the world’s second largest economy with the largest population in the world. So, yes, we would like to tap into that huge potential.

As a matter of fact, China has $3.5 trillion US dollars in their national reserve. It’s is a huge market with 1.5 billion people and they have been enjoying positive economic growth for the last three or four decades. China is an opportunity, not a challenge, and we are hoping to tap into that potential so that Indonesia can progress together with China. China is our partner and we are proud of that.

When I first took over the position of ambassador and was about to go to Beijing, the president instructed me to double our trade volume with China by 2015. Later, that was reduced to 2014. He said that I had to reach at least $50 billion trade volume by 2014. When he instructed me, two years ago, our trade volume was about $26.3 billion. At the same time, we had $22 billion trade volume with the US.

It was hard to believe that I would be able to achieve that target, but, since I received that order from the commanding officer of Indonesia, I have devoted myself to deploying all the resources that we have to (reach) that goal. Every year, we organize around 10 to 12 trade, tourism and investment forums around China, including Hong Kong.

Last year, we managed to top around $62 billion trade volume bilaterally with China, exceeding the expectations of the president. Now, they have instructed me to achieve $80 billion (trade) volume by 2015. I will do whatever is necessary, although I’m sure I will not be there to see that objective because my tenure will be coming to an end around 2014. But, I’m confident that we will be able to achieve this new trade volume target.

When I took over (the office) two years ago, Indonesia enjoyed an investment of about $600 million because of the slowing down of the economy in 2008 and 2009. Last year, we received $1.2 billion in investment and we hope that by the end of this year, we will receive about $2 billion investment from China.

Also, if we talk about statistics, about two years ago, travels between China and Indonesia were only about 260,000 (people). Last year, we received 775,000 visitors from China. And the target is 1 million travellers for next year. We have also increased flight numbers from all around Indonesia to make it easier for people to travel to and from China. This is an example of how we can see the success of our bilateral relationship with China.

Along with tourism, which is a massive market, there are other important investment and partnership potentials. Chinese investments in Indonesia are about half of what it invests in Malaysia, your neighbour next door. Where do you see the potential at this time for Chinese investors to get more involved in Indonesia and its developments?

As I mentioned, Indonesia is a huge market that China can continue to tap into. We have an abundance of natural resources and we have 240 million people, which is a large market for Chinese products. And we have a very stable government as well. We are a democratic country and you can express your opinion freely in Indonesia. President Susilo Bambang Yudhoyono has been in office for seven consecutive years, which shows that we have a stable political system.
Indonesia is very stable; we are a vibrant democracy and an emerging market with plenty of opportunities. In May 2011, the President issued a very bold initiative, the MP3EI, Master Plan for Acceleration and Expansion of Indonesian Economy. Every time I meet with potential Chinese investors, I show them this plan and the mega projects involved in order to show them that their investment will be as successful as they can expect. The plan needs about $600 billion dollars and the Indonesian government has managed to put aside $150-$200 billion dollars, so we need about $400 billion more. This is an opportunity for Chinese investors to invest in Indonesia.
But even if investors decide to invest in other ASEAN countries, like Malaysia, that’s fine because we are all in Asia. By investing in Malaysia, you’ll most likely need Indonesia resources so we’ll are also able to enjoy the investments of our neighbours. For example, Malaysia or Singapore or any other ASEAN members need Indonesia because we have a lot of natural resources as well as expertise. We also have 100 million middle class people that have a lot of purchasing power. So at the end of the day, all ASEAN investments are welcome. As a group, we are always happy to see positive economic growth in the ASEAN region. In fact Indonesia, along with the nine other ASEAN countries, has already pledged that by 2015, ASEAN should become one entity, not only in terms of politics, but also in terms of the economy.

One of the interesting factors of the MP3EI is obviously the focus on the infrastructure, which is of great interest to Indonesia. What specifically is being done to draw Chinese investors to those infrastructure projects in Indonesia? Have there been any particular incentives put into place?

We have put in place many pro-business, pro-growth, and pro-people programs. Indonesia employs a free market economy so you can bring in and bring out Indonesian resources without any hindrance whatsoever. Secondly, the government just issued a new regulation that gives investors a 10-year tax break if you invest more than $100 million dollars in Indonesia, which is a small amount in terms of investments, especially for China. The Indonesian government also guarantees that if they invest in one of the mega infrastructure projects and encounter a loss, Indonesia will compensate that. So, their return of investment will be guaranteed. We are very attentive in that regard. The Chairman of the National Investment Coordination Board has recently established something called the Chinese Desk to specifically cater to Chinese investors. This allows them to invest and to process the investment under one roof, meaning that things like the licensing process is very fast, etc.
In fact, a recent BBC poll stated that Indonesia is the best country to start a new business. So, we are trying to do what we can and while you cannot change Indonesia overnight, we do have an efficient process. Indonesia has to be competitive with the rest of the countries around the world. And right now, we are enjoying this so called Asian Century and we would like to grasp the opportunities while they’re still there. We have to be quick in that regard and we have to adapt to new realities as fast as possible, otherwise, we will be left behind. I think that, with Indonesia’s educated and disciplined work forces, we will be able to compete with the rest of the world.

On a personal note, you have served Indonesia for over three decades.  Prior to becoming Indonesia’s Ambassador to Beijing, you served in the public sector in Indonesia as Director General for Defence Strategy within the Department of Defence. Can you talk a little bit about how your career has really prepared you for your role here? What one achievement are you most proud of here in Beijing?

I’m proud to see that the relationship between Indonesia and China has reached the highest point of our bilateral relations. Again, it wasn’t only me, but I’m very proud that I played a role in that relationship.  And I hope to continue to play a part in that relationship, even after I am no longer the ambassador. I have fallen in love with this beautiful country and its warm hearted people. As a matter of fact, I have been invited to become a professor in two or three universities here in China. This means that they not only consider me as a friend, but also as a family member. So, I’m most proud of that relationship that has blossomed between the Chinese and Indonesian community, at all levels, official or otherwise.

What would you like to say as a final message to the business community, specifically to the 80% of the readers of Bloomberg Businessweek China who are professionals, top executives and business owners?

I would appeal to them to come to do business in and with Indonesia.