One of the challenges facing President Joko “Jokowi” Widodo in his second term is to increase investment and boost exports with a view to closing the current account and trade balance deficits. For that purpose, new ministries in the fields of investment, digital economy and the creative economy will be established. Additionally, a new function will be added to the Foreign Ministry dealing with international trade.
Those changes are being made, in Jokowi’s words, because “we have two problems: increasing investment and increasing exports”. Simple as they are, Jokowi’s words are full of meaning and provide ample room for interpretation regarding how to conduct Indonesia’s diplomacy and foreign policy.
The President’s Instruction
Investment and exports have always been part of the diplomacy and foreign policy carried out by the Foreign Ministry through its missions around the world. The question is how to interpret the President’s instruction to “increase investment and increase exports” from the perspective of diplomacy and foreign policy.
From the strategic-conceptual point of view, diplomacy under the leadership of Foreign Minister Retno LP Marsudi for the past five years has been aimed at bringing tangible benefits to the people. This is in line with President Jokowi’s people-oriented policy. In this spirit, diplomacy must correlate with the needs of the people: as we call it “down-to-earth” diplomacy.
This kind of diplomacy is basically the sharpening as well as broadening of the definition of Indonesian diplomacy, which previously was heavy on regional and global politics. It is true that a big country like Indonesia must play a significant role and demonstrate its leadership both at the regional and global levels. Participation in regional and multilateral fora such as ASEAN, Group of 20, Asia-Pacific Economic Cooperation, Asia-Europe Meeting Summit, Indo-Pacific, etc. shows that Indonesia is playing an active role in dealing with regional and international issues.
Many may think Indonesia’s presence in those international fora is merely a diplomatic gesture it deliberately makes to other countries. Nothing could be further from the truth. In every regional or multilateral meeting, Indonesia almost always brings an economic diplomacy agenda to attract foreign investors, with particular emphasis on the digital economy, infrastructure and vocational education and training. Therefore, every rupiah spent on foreign travel will generate tangible benefits to the people. This is what down-to-earth diplomacy means.
President Jokowi has directed the focus of diplomacy in the next five years to investment and export promotion. This is similar to his instruction four years ago when he asked Indonesian ambassadors and diplomats to act as salespersons for Indonesian products. Based on these instructions, the Foreign Ministry initiated “down-to-earth diplomacy” with the economy given a priority.
Using their already-established human resources, budget and institutions, Indonesian diplomats overseas carry out economic promotion commonly referred to as trade, tourism and investment (TTI). The three pillars of economic diplomacy are in line with the essence of down-to-earth diplomacy: bringing tangible benefits to the people. If the Foreign Ministry is entrusted with a new task related to international trade, the down-to-earth diplomacy concept will only be reaffirmed.
With international trade being under the purview of the Foreign Ministry in terms of its operationality and promotion, the efforts to increase foreign trade will be directly connected to the grand design of foreign policy and down-to-earth diplomacy. At this point, Indonesia’s diplomacy is surely growing more down-to-earth.
Connectivity between foreign trade and foreign policy is needed because economic diplomacy is not simply about promoting TTI. Thus, the expansion of the Foreign Ministry’s portfolio is not as simple as giving it a new task and a larger budget. It requires a paradigm change in the conduct of economic diplomacy. Economic diplomacy must be in line with the strategic vision of geopolitics, geo-economic, gravitational tendencies of the world economy, regional and global political stability and ideological competition among countries.
All of those strategic perceptions must serve as a basis for designing the economic diplomacy strategy. If economic diplomacy operates with a sectoral approach, it will risk being isolated from the macro-political context and broader national interests. Changes in the paradigm of diplomacy should not be reduced to a shift in focus from political diplomacy to economic diplomacy, but more on expanding the perspective of economic diplomacy itself.
Conventional economic diplomacy that emphasizes the business-sectoral economy needs to be reinterpreted by expanding it into economic diplomacy with a macro-political perspective so that it supports the conduct of diplomacy in other fields.
The challenge is how to connect business-sectoral economic diplomacy and macro-political diplomacy. For example, economic diplomacy that supports the territorial integrity of Indonesia. The absence of effective occupation by the state of the frontline islands has increased the vulnerability of territorial integrity. So has economic underdevelopment in the area along its land borders.
The welfare gap could lead citizens in the border areas to shift loyalty to neighboring countries, putting territorial integrity at stake. For this reason, economic diplomacy needs to focus on attracting investment in road infrastructure, ports, tourism or special economic zones, so that growth centers will be built on the frontline islands and border areas.
The potential threat of national disintegration in Papua, for example, can be addressed through economic diplomacy and international trade. Papua’s geographical and ethnic proximity with Pacific countries should inspire Indonesia to utilize this Melanesian sentiment to improve trade and economic relations with the Pacific countries. Efforts to connect business-sectoral economic diplomacy (be it investment, trade or tourism promotion) with macro-political and broader national interests come at an opportune time. The down-to-earth diplomacy that Retno has initiated will become even more down-to-earth for the good of the people.
Darmansjah Djumala The writer is Indonesian Ambassador to Austria and the United Nations in Vienna, and a lecturer at the post-graduate program in the Department of International Relations, Padjadjaran University, Bandung. / Global ties: Delegates to the Indonesia-Africa Forum chat, a day ahead of the international conference in Bali’s Nusa Dua. The two-day event aims to discuss issues of economic cooperation and trade. (Antara/Nyoman Budhiana)