By: Our Correspondent


Hold the world at bay

Yudhoyono and his economic advisers were at the forefront of that move, implementing a range of policies that inhibited trade and threatened the economy, including new regulations on horticultural imports, imports of finished goods and exports of mining commodities. The measures continued under Jokowi, resulting in a sinking rupiah and a slowing economy.

Jokowi in the past three months has started to assert himself, firing protectionist members of his cabinet and replacing them with export-oriented ones like free-market disciple Thomas Lembong in the trade minister’s post.

Jokowi also personally negotiated a deal with the Freeport McMoRan mining company to extend the contract for its gigantic Grasberg mine, the biggest producer of copper in the world and the second biggest producer of gold. Key officials in his own government opposed the deal supposedly on nationalist grounds but also seemingly to seek a piece of the Freeport pie for themselves.

As president, Jokowi initially showed little interest in joining the TPP. Under Lembong’s urging, he changed course but he will have to get the country to follow him.

Last week, in a series of tweets sent after the announcement in Washington, Yudhoyono warned that “If Indonesia is not ready and is forced to enter the TPP, then our nation will suffer. Such is the ‘law of globalization.’” He added that Indonesia’s market could be “flooded with goods and services from other countries, while our exports will fail to be competitive abroad.”

Competition looms

Three of the Asean countries that signed up to the TPP – Malaysia, Singapore and Vietnam – are export oriented, while Indonesia is not, he said, depending instead on its large domestic market – a market that would be more open under the TPP.  Lembong, for his part, argues that Indonesia has to compete or lose out to its neighbors especially fast-growing Vietnam. He tells audiences that protectionism will guarantee mediocrity for the country.

There have been additional concerns from Indonesia’s cozy business community and political establishment. The Democratic Party, which Yudhoyono founded, has warned that the country isn’t ready to face international competition, citing inadequate infrastructure and other issues.  .

“Are Indonesians and the national economy really ready for this?” asked Edhie Baskoro Yudhoyono, the former president’s politician son. “How about our domestic infrastructure? Has the government asked for the public’s opinion, especially those involved in the national economy, about the possible impact of the TPP on Indonesia in the future?”

Fadli Zon, deputy chairman of Gerindra and deputy speaker of the House of Representatives, said the TPP would only benefit Indonesia “if we had competitive businesses.”

Jokowi’s government has made improving infrastructure and education key priorities but the country needs foreign investment to fund the drive, officials say.

Economist Lana Soelistianingsih of the University of Indonesia told the Jakarta Globe last week, “Countries with manufacturing-based exports will be able to perform better in this partnership.”

Against those concerns, some economists say the pact would open markets in South America and other regions to Indonesia’s exports, which are dominated by coal, palm oil and natural gas.