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Indonesian President Wants Foreign Policy Focus on Economic Diplomacy

President Joko Widodo wants Indonesia's foreign policy direction and priorities for the next five years to focus on economic diplomacy - Photo by Presidential Office.

JAKARTA (TheInsiderStories) – President Joko Widodo wants Indonesia’ foreign policy direction and priorities in the next five years focus on economic diplomacy. The head of state urges the country would firstly capitalize on the strengthening of its domestic market and use it as leverage to increase its bargaining power on the global level.

“I want 70-80 percent of what we have to focus on economic diplomacy because that is what our country is currently needed. We live in a world full of uncertainty, which poses great challenges to all countries,” the president said when opening the meeting of Indonesian chief representative with the foreign ministry in Jakarta, Thursday (01/09). The meeting was attended by 131 heads of representatives and the foreign ministry’s first echelon.

Widodo added that the protectionist trend also posed new challenges for global trade. Amid this upsurge in protectionism, Indonesia has much to be grateful for, as the economy is still growing at more than 5 percent. We have an incredible asset – a huge, growing domestic market. This will make the Indonesian economy indispensable in geo-economics in the future, the president said.

According to the president, fields that are the country’s priority now include import substitution products and energy as the biggest contributors to the improvement of the current account deficit and trade balance.

“We know that petrochemicals are still imported, 85 percent are still imported. So if we want to bring in investment, look for products related to our imported substitute goods. Petrochemicals are related to methanol for example,” he said.

Then in the energy sector, considering that Indonesia still imports a large amount of energy, both oil and gas. Specifically, the president asked ambassadors to look for investors who have the ability to manage materials that many of Indonesia have, such as coal.

The president also requested that the ambassadors actively seek investors who can turn copra coconuts into avtur. Likewise, crude palm oil as a mixture of diesel through B20, B30, B50, and B100. Thus, Indonesia will no longer export these commodities in the form of raw materials.

If Indonesia can produce B50, the president believes, Indonesia’s bargaining position towards all countries will increase, for example against the European Union which often boycotts Indonesian palm oil.

By increasing investment in these fields, the president hopes that Indonesia’s current account and trade balance will improve. For this reason, the ambassadors’ support for investment is urgently needed.

“The goal is going there. If our current account balance is positive, that’s when we will truly become independent. With anyone, we are brave because there is no dependence on the financial side, the economic side. That is our target in the next five years,” Widodo said.

Previously, foreign minister Retno Marsudi has announced that Indonesia’s foreign policy will be based on the following five priorities: first, economic diplomacy to protect country domestic market from the dumping of products subsidized by foreign entities.

Indonesia will secondly focus on strengthening its traditional markets and entering new markets in Africa, Latin America, Central Asia, South Asia, the Middle East and the Pacific for goods and services, investment and infrastructure development.

“Thirdly, we will strengthen our trade negotiations and investments. Over the next five years, we will accelerate comprehensive economic partnership agreements, free-trade agreements and preferential trade agreements with various countries,” the minister said.

Marsudi added the ministry would also bolster trade and investment promotion and encourage outbound investment.

“It is time for Indonesia to expand outbound investment internationally, in synergy with our national economic interests,” she said.

Fifth, the ministry will optimize its diplomatic efforts to protect Indonesia’s strategic economic interests, including palm oil exports.

“Indonesia’s palm oil interests are fundamental because they determine the fate of about 16 million people, particularly farmers and their families. We will continue to resist any discrimination against palm oil because it not only harms our national interests but also threatens the global population’s need for palm oil,” the minister said.

Lastly, the ministry will continue to bolster Indonesia’s adoption of Industry 4.0, including the digital industry, the creative economy, and human resources development.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com