Indonesia at 2020 Dubai Expo: Growing ties with the Middle East?

On September 9, representatives of the Indonesian government broke ground on the construction of the 1,860 sq meter Indonesian Pavilion at the 2020 Dubai Expo between the cities of Dubai and Abu Dhabi, signifying Jakarta’s commitment to expanding its presence in the Middle East, both in trade and foreign relations.

The Dubai Expo, in which oil riches, regional competition and glitz are coalescing into a brash extravaganza, is regarded as Indonesia’s chance to showcase potential export products, investment opportunities, diversity of Indonesian culture and concepts in accordance with the vision of Indonesia Emas 2045, or Golden Indonesia, while stressing its heritage and ties to the epicenter of Islam.

It has been a long time coming. In the mid-1960s, the Suharto administration saw its future tied more to the west, and particularly with the United States. The strongman pivoted policy away from the third-world emphasis favored by his predecessor Sukarno and aligned Indonesia into one of the west’s most dependable partners, its military cadres training at Fort Bragg and Fort Benning in the United States. While it loaned its rhetorical support to Palestine, it offered little more. Its state-owned energy company Pertamina partnered with US oil giants and Freeport McMoRan mined its minerals.

It wasn’t until President Joko Widodo’s began to visit Gulf countries after his 2014 election that policy began to swing towards the Middle East.

The government now hopes to see the Middle East as an important trade partner, with the value of bilateral trade between Indonesia and the United Arab Emirates, for instance, continuing to increase every year, reaching US$3.3 billion in 2018 and featuring exports including gold, motor vehicles, palm oil and paper. In return, the UAE’s exports include aluminum and steel pipes. In the service sector, large numbers of skilled and unskilled Indonesians work in mining, construction, hospitality and household assistance.

At that, however, the Middle East doesn’t even crack the list of important trade partners. China, at 17.65 percent of total exports, is the leader, followed by the US at 10.55 percent, Japan at 10.54 percent, India, 8.6 percent and Singapore, 7.6 percent. The problem is that there few major products, the UAE notwithstanding, that manufacture anything important. the Gulf’s exports are pretty much oil, oil and oil. Oh, and natural gas.

The Expo, in which 192 companies have pledged to participate, is scheduled from October 20, 2020 to April 10 the following year, It is forecast to be the world’s third largest world event after the Olympics and World Cup, projected to be visited by around 25 million people, 70 percent of whom are from outside the UAE. Dubai beat out Izmir, Turkey, Sao Paulo, Brazil, and Yekaterinburg, Russia to host the event.

The theme, “Connecting minds, Creating the Future,” is intended as an allusion inspired by the function and nature of the UAE, particularly the city of Dubai as a regional hub connecting the Middle East, North Africa and the world.

Certainly, Indonesian authorities, starting with President Joko Widodo, who pushed for the country’s presence at the Expo, regard it as an opportunity to boost exports to UAE or even the larger Middle East. From 2016 to 2020 the Dubai and Sharjah regions, the closest satellite cities to Dubai, are building massive property developments including hotels and apartments to support the Expo accommodation. Special subsidies are on offer for entrepreneurs who want to build hotels.

Indonesian authorities hope to use this momentum through exports of building materials such as wood and furniture. Indonesian companies hope to play a role in the construction of transport facilities, buildings and other development projects.

In the labor services sector, hotel, shops and restaurant construction is regarded as an opportunity to send skilled workers, especially for the hospitality sector. Another sector is processed food, an attractive potential market for Indonesian companies.

Nation branding through World Expo

The country's image is a key element in international interactions with other countries. Today countries are racing to use soft power to grow and maximize their image and reputation on the world stage. The World Expo is a place to utilize the physical space in pavilions to define and provide a national brand, more than just capturing attention, transforming visitors' interests to raise Indonesia’s positive image as a fellow Muslim nation sharing cultural interests with the Middle East.

Indonesia's participation can also be a platform to raise its image amid government efforts to attract as much foreign investment, an image that is currently dubious at best. Based on the 2018 Brand Finance report releasing a country's image score, Jakarta is ranked 16th of 100 countries, with the US, China and Germany the top three. The image of the Republic of Indonesia in the eyes of the world, seen from several aspects including market openness, infrastructure, development, business climate, government policy, and trade policy, is problematic.

Jakarta through the Ministry of Trade as the head of the team for the preparation and implementation of participation has appointed the private sector to manage the Pavilion. Several private entities have committed to become official sponsors. There has been a commitment from the start not only in funding but cooperation between the government and the private sector.

The hope, in accordance with the theme of the Expo, is that Indonesia can show the world that the country has a variety of advanced thinking, civilization and culture as well as abundant resources that can provide solutions to the challenges facing the world.