By Ernest Z. Bower, Senior Adviser & Director of the Southeast Asia Program, CSIS
Yesterday in the snowy Swiss enclave of Davos, Indonesian president Susilo Bambang Yudhoyono (SBY) threw down the rhetorical gauntlet and announced Indonesia’s plans be a global player. Addressing a well-heeled World Economic Forum audience, he asserted Indonesia’s intent to influence global trends: “Asia is of course more than China, Japan and India,” he said.
Mr. Yudhoyono has a good case to make. Indonesia is the world’s fourth largest country and third largest democracy. By most criteria, Indonesia has a stronger claim on BRIC membership than Russia. It is a member of the G-20 and a massive presence in other global fora such as the Organization of Islamic Conference (OIC) and the Non-Aligned Movement (NAM). Indonesia is the chair of the Association of Southeast Asian Nations (ASEAN) and the East Asia Summit (EAS) this year, and will chair the Asia Pacific Economic Cooperation (APEC) forum in 2013.
Indonesian influence could be an overwhelmingly positive input as the world defines new frameworks and architecture. The World Bank is restructuring the relative representation of countries taking into account the new role of countries like Indonesia, Brazil, China and India; the United Nations is moving in the same direction. The EAS and the ASEAN Defense Ministers’ Meeting Plus represent ASEAN-based nascent regional security architecture. These changes are investments in enhancing global stability, peace and prosperity.
However, to be effective globally, Indonesia must strengthen its institutions at home and provide real leadership in its immediate neighborhood – in ASEAN. Neither of these challenges has been fully met.
President Yudhoyono confidently hailed democracy, human rights and eliminating corruption as key pillars for Indonesian influence. The truth is that Indonesia is generally moving in the right direction on these issues, but stronger leadership at home is needed to institutionalize and practically implement these fundamental Indonesian values. In terms of economic dynamism, Indonesia has an incredible opportunity to lead, but while it is ASEAN’s largest economy, it has not been a leader on trade and it has a myriad of microeconomic challenges that limit its vast potential as a hub for foreign direct investors seeking an anchor venue in the ten-country, 620 million, $1.8 trillion gross domestic Southeast Asian market.
Indonesia’s global impact will only be effective if it can lead within Southeast Asia. As the chair of ASEAN for 2011, Indonesia faces the challenge to build on the strong and proactive leadership of Vietnam in 2010. ASEAN’s viability depends on its effective progress in achieving its leaders’ goals of economic, political and cultural integration by 2015. Specifically, ASEAN must advance economic integration by moving beyond tariff reductions in the ASEAN Free Trade Agreement (AFTA) to enforcing the reduction of non-tariff barriers and implementing guidelines laid out in the ASEAN Investment Area (AIA) and liberalizing services, movement of people and building regional infrastructure. Politically, ASEAN’s biggest challenge is encouraging Burma (Myanmar) to create political space. Doing so means changing the paradigm on the principle of “non-intervention” in other members’ internal affairs. No ASEAN member but Indonesia could appropriately champion the case for welcoming Timor Leste (East Timor). Finally, on cultural integration, Indonesia can lead by example as the region’s largest country and reach out to other countries. Recent trends indicate increasing nationalist sentiment among ASEAN countries, including Indonesia. Leadership is required to change the tone and direction toward a unified identity for the region.
The vision for global Indonesian influence that President Yudhoyono’s eloquently shared in Davos is most welcome and should be actively encouraged. However, strong leadership at home and in the ASEAN neighborhood is a necessary condition for realizing Indonesia’s broader goals.
