Diplomacy, economy and welfare Desra Percaya  ;   Ambassador and permanent representative of Indonesia to the UN in New York

JAKARTA POST, 24 September 2014

                                                                                                                       

                                                      

Indonesia’s place among the world’s community of consolidated democracies was further assured by its recent successful legislative and presidential elections. The cherry on top was none other than a hard-won people’s victory, followed by praises from around the world, as echoed at the UN headquarters in New York. A rising middle-power, Indonesia’s unfaltering commitment and contributions to world peace and to various regional and international arenas are well recognized. Hence, expectations from both domestic and international audiences are high for the new government under president-elect Joko “Jokowi” Widodo and his vice president-elect Jusuf Kalla. Jokowi’s stance on foreign policy is a crystal clear affirmation of free and active principles with four key priorities: harnessing our archipelagic state’s identity, exercising middle-power diplomacy as a regional power with a selective-but-effective global engagement, enlarging the theater of engagement in the Indian and Pacific Oceans, primarily through ASEAN and the East Asia Summit, and last, but not least, building a wider public-based foreign policy formulation and implementation. From the outset, greater economic achievement has been declared as a strategic objective of foreign policy for the next five years. This has placed diplomacy as a “driver” and diplomats as “agents” in the strengthening of the national economy and eventually in the offering of a greater contribution to regional and global economies. The question is, how are these economic aspirations to be translated into foreign policy formulation and implementation? In the ancient world, a diplomat’s initial duty was to secure trade agreements, as exhibited by Egypt and Babylonia four-and-a-half millennia ago (Gorazd Justinek et al, 2012). Trade also enabled a type of relation among the Southeast Asian peoples and between them and the Europeans in the 18th and 19th centuries (Anthony Reid, 1988, 1995). Diplomacy evolved and nowadays it encompasses many other vital areas beyond economy, to include politics, security, socio-culture and even development. They altogether form the national interest and a government exists to safeguard this very interest. For Indonesia, such perennial interests and goals are stipulated in our sacrosanct preamble to the 1945 Constitution, which compels the government to always: “protect the whole people of Indonesia and the entire homeland of Indonesia and, in order to advance general prosperity, to develop the nation’s intellectual life and to contribute to the implementation of a world order based on freedom, lasting peace and social justice […]” In that regard, the Foreign Ministry has always puts a high premium on so-called economic diplomacy, since it is about people’s welfare. And, indeed, achievements in this area have been made, but not without challenges. There are both internal and external challenges to the practice of Indonesia’s foreign policy. First, internally, the strengthening of coordination and communication among different authorities often poses a nightmare — even a setback to economic diplomacy. This is even more so given the mushrooming of stakeholders and the widening of foreign policy establishment in the economic realm as a result of Indonesia’s greater involvement in various economic cooperation frameworks and initiatives. Moreover, there remains a widespread public misperception that a considerable number of our overseas diplomatic missions perform poorly or below par. Such misperception can not only hamper work, it could be demoralizing too. There is an urgent need to devise a new performance-measuring system through which a more objective judgment can be validated. Second, the external challenge relates to the virulent uncertainty that still haunts the global economy. For instance, on trade, excessive commodity price volatility coupled with an absence of strong authority in decentralized markets, inter-alia, have resulted in serious uncertainty. Professor of international economics Peter Van Bergeijk said that “trade uncertainty is a market distortion” and governments’ coordinated economic decisions might well reduce uncertainty and thus “could improve on welfare”. Correspondingly, the essence of Indonesia’s diplomacy is to create an enabling, stable and just political and economic environment within which economies can build mutual trust and comfort levels and coordinate policies for common mutual benefits. Hence, this explains our activism in such fora as ASEAN, East Asia, Asia-Pacific Economic Cooperation, the G-20, the World Trade Organization, the World Bank and so forth. While ambassadors become marketers and opportunity seekers, of a sort, in a wider context, as one might expect, the larger diplomatic machinery will always maintain its constructive role in building a strong, sustainable, inclusive and fair global economic and financial architecture. A tall order it is. In order to succeed, diplomats need to nurture economic prowess and strong business instincts. They should possess intelligence and a cognitive capacity in the areas of markets, networks, and technology (particularly in information, communication and transportation). And to cope with stiff competition and existing limitations, a psychomotoric capacity toward innovation must be developed. Having said that, a positive attitude to serve and collaborate, imbued by the spirit of gotong royong (mutual cooperation) and strong optimism, is an indispensable ingredient for a new mentality. Alongside, we have to be mindful of the reasons for our successes, too, and see how we can build better on them. Indonesia, according to the World Bank, is currently the world’s 10th largest GDP with an annual growth rate of around 5.9 percent in the past five years. The economy posted a record-breaking US$400 billion in volume of trade in the past decade. McKinsey & Company, in a 2012 report, stated that Indonesia “has the potential to be the seventh biggest [economy] by 2030”. By 2016, the country was predicted to “reach 100 million internet users”. Translate this into business opportunities. It means manifold small and medium enterprises (SMEs) can enter the bigger market also via the digital gate. The global economy will likely face uncertainty in the next five years. Yet there is a pool of opportunities for Indonesia. China, for instance, would have to rebalance its current investment-driven growth toward a more consumption and service-driven one (GEO 2014, Conference-Board.org). A well-planned and fine-tuned strategy could allow Indonesia to reap benefits by increasing its exports and opening up new markets. Similarly, specific efforts to attract foreign direct investment would need to be intensified as the transfer of cutting-edge technologies is accelerated. New hopes abound. But one should not forget the old adage: foreign policy is a mere reflection and continuation of domestic politics. There will be no order too tall for any diplomatic or trade mission, if the house is in order. ●