As many as six Indonesians are among the world’s 500 Most Powerful People, according to noted publication Foreign Policy magazine.
By Bawono Kumoro
During a ceremony at Nanyang Technological University, Singapore, where he received an honorary doctorate, President Yudhoyono tackled the global perception that Islam and democracy could not work together. The president said that he believed Indonesia was a good example to highlight how democracy, modernization and Islam worked hand in hand.
Furthermore, President Yudhoyono said Muslims in Indonesia are very comfortable with democracy and with modernity. Thus, the Indonesian democracy may well offer valuable lessons to Arab Spring countries who are now facing similar challenges.
The debate over the relationship between Islam and democracy rests not only on Islamic doctrine but also on history. Essentially, democracy is a system of governance where sovereignty lies in the hands of the people. But many will say this contradicts with the doctrine of Islam, since in the Islamic view, sovereignty lies in the hand of God. Advocates of this line of thinking put forward three arguments.
First, there is the fundamentally different view of the nation, or ummah. The view of the nation in modern democracy is tied to a physical space marked by territorial and geographical borders. On the other hand, Islam has its own understanding of a nation that is not bounded by borders, but by aqidah (the basic tenets of Islam). Therefore, for many Muslims, nation is defined by faith, not by geography.
Second, some Muslim scholars see democracy as a worldly value, when spiritual goals are of primary importance. Democracy thus becomes a secondary goal.
Third, a contradiction arises because the people’s sovereignty that lies at the heart of democracy is absolute, meaning the people are the ultimate holders of power. Laws and regulations are decided by the people through their representatives and not by God. But for some scholars, the people’s sovereignty is not absolute at all, since it is bound by the laws of Islam. In Islam, only God’s sovereignty is absolute.
These three interpretations are used by some Muslims to argue that there is no space for democracy in their lives. However, there are many Muslims who take the opposite view, arguing that democracy is inherent in people and in line with Islamic teachings. They base their argumentation on Islamic doctrines —justice, freedom, deliberation and equality— that espouse the basic principles of democracy.
At this level, Islam does not speak about a procedural system but more about the basic soul and spirit of democracy. If the interpretation of democracy is the existence of certain social and political ideals, like the freedom of thought, faith, opinion and equality before the law, there would seem no contradiction, as these are guaranteed by Islam.
There are several cultural factors that have slowed the growth of democracy in the Islamic countries of the Middle East.
First, there is a strong monolithic paradigm of thought over Islam. Such a paradigm stems from Middle Eastern Muslims’ limited understanding of Islam’s nature and essence, both in regards to Koran and Hadith and in regards to history.
Islam is often viewed as a divine instrument to understand the world, and such a perception has prompted some Muslims to believe that Islam offers a complete way of life (kaffah). In this understanding, Islam is an all-encompassing system of belief that offers a solution to all of life’s problems.
This view of Islam as perfect and comprehensive has a number of implications. If Islam is transformed for use at the level of political ideology and political practice, this could lead to the political belief that Islam must become the state’s basis of existence, Islamic jurisprudence must be accepted as the state’s constitution and sovereignty would lie in the hands of God.
In short, in the context of such a perspective the modern political system of rule by the people is in direct conflict with Islam.
Second, the absence of democracy in the Middle East could also be explained by the weak political will of the regimes to accommodate democracy. Leadership has long been based on family ties and regimes would lose this prerogative.
Third, the most ironic thing about the absence of democracy in the Middle East is the often tacit support of the Western world —the United States in particular— for the existence of the authoritarian regimes.
The United States has seemed to care less about whether Middle Eastern autocracies developed any democratic character than about how they were able to secure America’s various economic imperialistic interests. This has nothing to do with the nature of Islam, but it is obvious that the West, particularly the United States, is not always fully in step with its own exhortations to promote democracy globally.
Of special note, however, is the fact that the absence of democracy in countries of the Middle East is not a feature of the wider Muslim world. Indonesia, for example, has seen much success in the transition from an authoritarian regime to a democratic system of governance. While Indonesia still has a long way to go before democracy fully takes root, at the very least it has been quite successful in tearing down the walls of tyrannical power.
The general elections in 1999, 2004 and 2009 were testament to the wave of democratization here, and the direct elections of a president and a vice president through indicated a new phase history of Indonesian politics.
However, the most substantial and revolutionary change has occurred at the level of civil society. Muslims in Indonesia, slowly but surely, have grown and developed to become a rational, autonomous and progressive community. They have started to be able to think rationally and critically especially when they are facing the political and religious elite, which tends to be intrusive, manipulative and exploitative.
The basis of Indonesian Muslims’ political preference is more in the courage of their thinking in line with their rational reasoning. The courage to think rationally has contributed to the creation of a free public sphere, and this has been instrumental for Muslims in Indonesia to create the culture of open and fair political participation.
Indonesia would thus seem to prove that Islamic doctrine itself is not in contradiction with democracy. Instead, Muslims’ interpretation of Islamic doctrine and cultural heritage forms their views on the value of democracy and its relationship to Islam.
As the most Muslim-populous country in the world, Indonesia can play a significant role in efforts to promote democratization in the Islamic World. The nation is a real-world example of the compatibility of Islam and democracy, one that could serve as a model for countries in the wider Islamic world.
Bawono Kumoro is political researcher at The Habibie Center. He graduated from State Islamic University, Jakarta, with Political Sciences major. Currently, he is pursuing his post-graduate degree in Political Communications in Paramadina Graduate School.
Indonesia’s Special Relationship with Burma Faces Testing Times
BANGKOK — They are both former military officers and now presidents of their respective countries. One of them, Indonesian President Susilo Bambang Yudhoyono, was labeled “the thinking general” at home, and the other, Burma’s President Thein Sein, has been dubbed “the reformist.”
But that is not all that will make a meeting of this unique pair in Southeast Asian politics a moment to watch. There is more at stake: the special relationship that binds the two countries. In the spotlight when Yudhoyono arrives in Burma later this month will be the direction the region’s largest, most vibrant democracy is taking to assist the Thein Sein administration’s edge down the road of political reform.
After all, it is Jakarta’s unique ties with Naypidaw that enabled Indonesian Foreign Minister Marty Natalegawa to become the highest-ranking international visitor to travel to the troubled Arakan State early this year. The two-day visit in January offered Marty a direct glimpse of communities and areas hit by last year’s sectarian violence, leaving the Rohingya Muslim minority as the worst affected.
It was this relationship, furthermore, that opened the door for former Indonesian vice president Jusuf Kalla, in his capacity as the head of the Indonesian Red Cross, to head a relief effort for the Rohingya Muslims last August.
“The Myanmar president asked us to see personally what happened there,” Kalla said of his visit, made in the wake of the first eruption of anti-Rohingya violence. “We are one of the first groups being allowed to enter there.”
In-between these two visits was the exchange Yudhoyono and Thein Sein had on the sidelines of the Asean summit in Phnom Penh last November. By then, the violence in Arakan State offered a grim backdrop, with nearly 200 people killed and over 125,000 people displaced after the Buddhist majority from Arakan State targeted the minority Muslims in two bloody clashes in June and October.
But that is not the only troubling reality the head of the most populous Muslim country in the world faces as he reaches out to help an old regional ally. A new orgy of violence led by Buddhist monks targeting Muslim minorities in central Myanmar since late March has raised the political stakes for Yudhoyono. More than 40 people have been killed and more than 10,000 people displaced in garrison towns such as Meikhtila. Jakarta has already expressed concern about the anti-Muslim rage spreading across predominantly Buddhist Myanmar.
Yet the Yudhoyono administration has placed its faith in quiet diplomacy. It has eschewed the strong statements expressed by the Organization of Islamic of Cooperation (OIC), the Jeddah-based body of 57 Muslim countries, of which Indonesia is a political heavyweight.
“The OIC statements on Myanmar have been very harsh. Indonesia has opted to engage with Myanmar rather than isolating it,” according to a foreign ministry official from Jakarta, who spoke on condition of anonymity. “Indonesia has decided to take the lead to help Myanmar through a collaborative effort the way it is done in Asean.”
“Jakarta is sensitive to the messages it has received from Myanmar over the years,” the official told The Irrawaddy. “They [Burmese government officials] are at ease with a government that has ‘military thinking’ and has military issues to resolve in politics.”
The edge Indonesia enjoys over its other Southeast Asian neighbors on this front is obvious. After all, it came out of after a 30-year military dictatorship in the 1990s the way Burma is now doing after 50 years of military oppression.
Jakarta’s approach is in tune with a diplomatic beat it has struck with Myanmar spanning decades. The past 10 years, in fact, has seen significant attempts by Indonesian governments to push Burma’s former military junta down the road to reform.
In September 2007, following the brutal military crackdown of anti-government protests led by Buddhist monks, Yudhoyono sent a respected retired general, Agus Widjojo, to Burma to convince the then junta leader, Snr Gen Than Shwe, to embrace political reform. The close military friend of Yudhoyono flew into Burma under the pretext of attending the funeral of former prime minister Soe Win, a military man with a bloody past.
And before Widjojo, known as a reformist general who helped push the country’s strongman Gen Suharto to retirement, another Indonesian figure with reformist credentials, former foreign minister Ali Alatas, had made inroads into Burma. He did so after being appointed as the United Nations special envoy to Burma in 2003.
“Indonesian efforts to encourage Myanmar to open up during military rule and to help them with reforms since are rooted in a relationship that we do not have with any other country in Southeast Asia,” says Endy Bayuni, former editor-in-chief of The Jakarta Post, an English-language daily in Indonesia. “It goes back to the post-independence history of both countries.”
“Indonesia’s freedom fighters who were looking for international support always flew to Burma as their first stop,” Bayuni noted of a period after 1948, when Indonesia gained freedom from Dutch colonization and Burma from the British. “The connections and the ties made the relationship between the two countries special.”
And if Jakarta’s Buma foreign policy is rooted in such bonds, Indonesia’s history during the Suharto dictatorship drew Burma’s leaders to Indonesian shores. A December 1993 visit by a Burma delegation, led by the then spy chief Lt Gen Khin Nyunt, was typical. The visitors had come to study the role of the Indonesian army performing its dual function—defense and politics—under Suharto’s New Order model.
“Indonesia is best placed to guide Myanmar during these uncertain and difficult times,” remarked a senior Southeast Asian diplomat. “It goes beyond offering advice for the anti-Muslim troubles. There is also Myanmar becoming chair of Asean in 2014, and Indonesia, with Marty, is taking on a bigger regional responsibility.”
By DIDI KIRSTEN TATLOW
First it was called BRIC, a group of emerging economies thought up in 2001 by a Goldman Sachs economist, Jim O’Neill, made up of Brazil, Russia, India and China. Then it acquired an “s” for South Africa and become BRICS. Now there’s talk of Indonesia, which has a strongly growing economy, maybe wanting in: BRICSI, anyone?
As the leaders of the BRICS nations met in South Africa this week and announced they would establish a development bank to help fund five-year infrastructure investment sums, plans for a financial “safety net,” or reserve, and a string of councils to add business and intellectual heft to the group, some are wondering if Indonesia should be in.
“You can add it as a sixth BRICS, perhaps, making it BRICSI,” PK Basu, regional head of Maybank in Singapore, told the BBC.
Here’s the argument, from The Jakarta Post: Indonesia is the strongest Southeast Asian economy.
“McKinsey & Co. predicts that Indonesia will be the seventh-largest economy in the world and will add 90 million people to its middle class by 2030. There are 45 million middle-class Indonesians today, and the country ranks as the 16th largest economy in the world,” the newspaper wrote.
For now, though, it’s called BRICS, known in Chinese as “Gold Bricks” (and China is a major, perhaps the major, driving force behind it, some commentators say). The concept of BRICS has been viewed skeptically by some who are asking what these nations actually have in common. But there is a sense it may be strengthening as a group – and growing as a challenge to the established world financial order, crafted principally by the World Bank and the International Monetary Fund.
That sense of change was on view in South Africa this week when the group held its fifth summit meeting in Durban and agreed to some key things, even naming figures.
Infrastructure investment over the next five years: About $4.5 trillion would be needed, as Xinhua, the Chinese state-run news agency, reported from Durban.
A figure for the financial reserves, called a Contingent Reserve Arrangement, would initially be $100 billion, Xinhua reported.
Also in the works are a BRICS Business Council, to provide business-to-business links within the group; a BRICS think-tanks council, to get ideas rolling; a BRICS academic forum as a way to promote specialist dialogue. (India seemed especially keen on this, with its president, Manmohan Singh, urging it at the meeting, according to Xinhua.)
How much of this is a vehicle for Chinese ambitions? China has long complained that the current world financial architecture is too American and European-focused, and said it wants a bigger voice.
Apple Daily, a Hong Kong- and Taiwan-based Chinese-language newspaper, reported that the currency reserve would be heavily financed by China – to the tune of 41 percent of its assets, or $41 billion. That has its own logic – China is after all the world’s second-largest economy.
The report quoted a Peking University economics professor, Xia Yeliang, as saying that China is putting up the money to win influence.
“China is doing it to increase its say; it’s playing the part of investor in many international organizations in the hope of being able to formulate things, even rewrite the rules of the game,” Mr. Ye was quoted as saying.
In another sign of change, China and Brazil agreed in Durban to a $30 billion currency swap, a kind of an insurance policy, to be used to finance trade in case of another global financial crisis such as the one that saw dollar liquidity dry up starting in 2008.
In January, its trade minister, Gita Wirjawan, noted that Indonesia did not want a status that it did not deserve, The Jakarta Post reported. But the country had reached the same economic standards as the BRICS countries, Mr. Wirjawan told a panel discussion at the annual gathering of the World Economic Forum in Davos, Switzerland, the newspaper wrote.
Author: Awidya Santikajaya, ANU
Indonesia is currently the world’s 16th-largest economy by GDP, and is predicted to become the seventh largest by 2030. Many have billed Indonesia as ‘a rising middle power’ — but how will, and should, Indonesia’s (perceived) rise impact on its foreign policy posture?
Amid the global financial crisis, the World Bank projects that Indonesia’s economy will grow by 6.6 per cent in 2013, better than many other emerging powers. The IMF has cut its growth prediction for Brazil from 4.6 per cent to 4.0 per cent, while Moody’s Analytics places India’s GDP growth rate at 6.0 per cent. Indonesia has also gained a prominent position in the global diplomatic arena in recent years by becoming a member of the G20 and by co-chairing the UN High-Level Panel on the Post-2015 Development Agenda. Indonesia is clearly more than just ‘a fractured belt of comets orbiting China’, as erroneously suggested by Parag Khanna.
Still, the nature and style of Indonesian foreign policy differs from other emerging powers. The BRICS are more assertive and tend to be revisionists of the global status quo. Brazil, India and South Africa, for instance, consistently ask for permanent seats at the UN Security Council.
In the area of development cooperation, most emerging powers already have official development assistance (ODA) agencies. India inaugurated its Development Partnership Administration last year, while Brazil and South Africa set up similar bodies a few years ago. BRICS nations also agreed on a plan to set up a development bank at the 2012 BRICS Summit in New Delhi. The bank is intended to provide a sort of an antithesis to traditional donor schemes, which are dominated by OECD nations. Indonesia, on the other hand, does not yet have an ODA body, and in the short run it will not follow the BRICS path to expand its strategic influence by providing aid to less-developed nations. Indonesia has interminable development problems within its own country, such as high poverty rates, increasing income inequality and rampant corruption, which could constrain an assertive foreign policy. But why do India, South Africa and even China — which are subject to the same, or perhaps even more serious, domestic pressures — confidently pursue more aggressive, coercive foreign policies?
Foreign policy is greatly influenced by the complex combination of state capacity, domestic politics, values and identity. On the issue of state capacity, Indonesia does not have absolute advantages over its Southeast Asian neighbours. Singapore, Malaysia and Thailand are economically more advanced than Indonesia. It also does not have military superiority over the region. These situations are much different from other emerging powers which are far more dominant than their peers in their respective regions. Brazil, for instance, is an undebatable economic, military and political powerhouse in South America.
Regarding political value, Indonesia chooses to respect regional norms that prioritise peace and stability as the basis for achieving common prosperity. This stance is different from India’s arms race with Pakistan or China’s firm behaviour toward its neighbours on territorial disputes. It is true that Indonesia initiated some interventionist proposals in ASEAN, such as the establishment of the ASEAN Intergovernmental Commission on Human Rights, but Indonesia also compromises very much for the sake of solidarity.
Considering the difficulty involved in radically changing the nature of its foreign policy, I would argue that although there is no need to relinquish its commitment to ASEAN and redirect its foreign policy contribution to a wider range of global issues, Indonesia has to strengthen its regional leadership in Southeast Asia. Indonesia’s rise should go beyond the normal assumption that it is primus inter pares (first among equals) in the region.
Indonesia needs to focus on developing a more substantive, rather than abstract, leadership position in the region. For this reason, significantly enhancing its bilateral relations with other Southeast Asian nations is pivotal. Business players, in particular, should be encouraged to expand their economic activities in other Southeast Asian nations. For years, Indonesia has devoted much political and diplomatic energy to resolving conflicts in Cambodia, Vietnam and Myanmar, but it has not reaped any great economic benefit from those countries once the conflicts ended. Indonesia’s investment in Myanmar, for instance, is much smaller than investments by Singapore, Malaysia and Thailand, despite Indonesia’s important diplomatic engagement in helping to open up the country. Similarly, there is no direct Jakarta–Phnom Penh flight even though Indonesia established outstanding diplomatic credentials in Cambodia during the crisis of the 1980s and 1990s.
Indonesia should also send more people, especially students, to learn about the cultures and languages of other Southeast Asian countries. These efforts could be supported by government funding, and would be crucial to strengthening long-term emotional and intellectual bonds between Indonesians and their fellow Southeast Asians. For strategic purposes, Indonesia also needs to establish more institutes dedicated to Southeast Asian studies. Institutes or centres related to international affairs could potentially encourage Indonesians to develop a more outward-looking mindset, which is critical to bridging gaps between foreign policy and domestic aspirations.
Indonesia’s new status as an emerging middle power provides it with a greater range of foreign policy alternatives. Re-evaluating Southeast Asia as a strategic and more substantive partner could be the most beneficial option.
Awidya Santikajaya is a PhD student at the Asia-Pacific College of Diplomacy, the Australian National University.
On a wide range of economic pointers, Southeast Asia is gaining fast.
For 15 years, since the Asian Financial Crisis of 1997 and 1998, the young tigers of Southeast Asia have been looked upon with suspicion by most investors while they struggled to rebuild their foreign currency reserves, signed currency swaps, strengthened their banking systems and made other reforms. In the meantime, the BRICS – Brazil, Russia, India, China and South Africa – have been gaining all of the publicity.
Today, the leaders of the 10-nation association, particularly Thailand and Indonesia but also even the perennially lagging Philippines, are becoming the focus of leading multinationals who see the region’s potential as a production base supplying not just the west but China’s burgeoning economy, with rapidly expanding consumer societies, ample natural resources including extractive industries, and reform and opening up by the region’s less-developed members, although corruption and mismanagement still handicap states such as Myanmar, Cambodia and Laos.
As Asia Sentinel reported on Feb. 20, Thailand, recovering from six years of political chaos and environmental disaster, has been leading the region, recording the fastest growth in the fourth quarter of 2012 since the country began compiling economic data in 1993. While the record 18.9 percent gross domestic product fourth quarter year-on-year growth is admittedly coming off a low base from the disastrous floods that inundated the center of the country in late 2011, extensive infrastructure development is extending rapidly into Laos, Cambodia and Myanmar and toward Kunming in China to make Bangkok the economic and industrial hub of the region. Indonesia, although it is increasingly being dragged back by economic nationalism, is also being driven by investment and growing consumer consumption.
Myanmar, once the richest country in Southeast Asia, and the Philippines, long saddled with disastrous economic and political mismanagement, are both on a recovery path. Given the enormous handicaps bequeathed to them by corruption and bungling, it will take a while before they return to anything like true health. But both now appear to have found more competent leadership that, combined with their enormous raw material potential, should put them right unless political disaster strikes again.
In 2011, foreign direct investment in Asean rose 25.7 percent annually to reach a record US$116.5 billion. The International Monetary Fund forecasts that Asean GDP will increase to US$3.8 trillion by 2017, with population rising to 660 million, equating to a per capita GDP of US$5,782, suggesting a significant rise. The economies are spotty, ranging from Singapore, with per capita annual gross domestic product by purchasing power parity of US$59,390 according to World Bank figures, down to Myanmar at about US$500. Industrial development is similarly varied, with countries like Cambodia and Laos at the very edge of development. Laos derives 80 percent of its gross domestic product from the sale of hydroelectric power to Thailand.
While China has gained attention as the factory to the world, Asean’s competitiveness has already surpassed China’s in labor-intensive industries. According to a report issued last week by the Seoul-based Samsung Economic Research Institute, the working age population growing substantially relative to dependent population at a time when China is pricing itself out of the process through rising wages and yuan appreciation. The China-to-Indonesia wage ratio increased to 3-to-1 in 2012 from 2-to-1 in 2005, with the Economist Intelligence Unit projecting a rise to 4.5-to-1 by 2015.
That has driven several manufacturers already to shift operations to Asean, following a decades-long pattern in which Japan’s clothing and textile makers transferred production bases to countries such as Vietnam. In capital-intensive industries, including electronics and automobiles, leading global companies are building production bases in Asean for risk diversification and market entry.
Major Japanese carmakers including Toyota, Nissan, Honda and Mitsubishi have begun a “China+1 strategy” by building factories in Thailand and Indonesia to secure production capacity, according to the SERI report. According to the World Bank’s “Ease of Doing Business” index, Singapore (No.1) and Thailand (18th) rank on a par with advanced countries, while Vietnam (99th) and Indonesia (128th) are at the level of the BRICs countries. The Asean countries, particularly Malaysia, are also providing incentives to foreign investors to facilitate job creation and establish their industries.
“However, Asean members need to improve their infrastructure and stabilize their labor market to replace China as a global factory,” the SERI report notes. “Roads and reliable energy supply are behind China’s level and conditions for parts and raw materials procurement are weak.”
In addition, wages are increasing and labor regulation is strengthening in some Asean countries. For example, Malaysia and Thailand implemented minimum wage systems in 2012 and 2013, respectively. Thus, the stability and better working environment that Asean members offer foreign companies is coming at a heftier price.
Solid domestic demand fueled by burgeoning middle-class populations has helped take up the slack in lower trade on which the early Tigers built their mercantilist economies after the global trade structure collapsed in 2008. Today, private consumption accounted for 53.2 percent of the GDP of the Asean countries in 2012, higher than the 44.6 percent in the BRICs. The number of PCs is expected to increase by 50 million and mobile phone subscribers 110 million between 2010 and 2020.
The so-called Y-generation in the region aged 15-29 stands at 160 million, accounting for 27 percent of the population, higher than the share in China and Russia at 24 percent and 23 percent, respectively. These teenagers and young adults actively use mobile devices to shop and acquire information. Social networking services are increasingly popular, with Facebook users in Indonesia and the Philippines standing at 50 million and 30 million, respectively, ranking fourth and eighth in the world. The mobile marketing industry is projected to more than double by 2016 in Indonesia.
Against perceptions, Muslims, who account for more than one-third of the Asean population, are becoming an important consumer segment, the SERI report says. “Amid the rising Muslim population, demand for halal food, food permitted by Sharia law, and financial products is surging. They strongly prefer global brands, and thus global leading companies are utilizing the region as a test bed.”
After McDonalds’ halal menu succeeded in Singapore and Malaysia, the fast food giant opened units in Australia and the UK. Standard Chartered Bank in 2012 selected Malaysia as a global hub for Islamic consumer finance, and started strengthening entry into the market, the SERI report notes.
Considerable credit goes to the ethnic Chinese, who account for fewer than 5 percent of the population although their invested capital accounts for a large portion of the economy. As of July 2011, the market capitalization of 72 Asean ethnic Chinese businesses was US$411 billion, 20 percent of the aggregate market capitalization of their respective countries. Ethnic Chinese companies also cast a wide net over business sectors. They dominate commodity markets. In the past 10 years, China’s huge appetite for raw materials has solidified the Asean commodity traders.
Based on their long-time operation in Asean, Japanese companies dominate the consumer and infrastructure markets. Japanese carmakers account for 95 percent and 90 percent of the Indonesian and Thailand car markets, respectively. Japanese companies also have been heavily involved in energy development, building road and railway networks and upgrading disaster response systems in ASEAN. Such capacity has helped enable 11 Japanese companies, including Mitsubishi and Hitachi, to participate in a ?3.4 trillion (US$36 billion) Jakarta development project.
Mindful of Korean and Chinese companies pushing into the region, Japanese businesses are focusing on strengthening ties with Asean even more. After relations with China worsened in mid-2000s, the Japanese government began to turn toward Southeast Asia. Japanese Prime Minister Shinzo Abe has followed up on this, choosing Vietnam, Thailand and Indonesia for his first foreign trip after taking office at the end of 2012. During his Southeast Asia tour, Abe announced five principles in his Asean policy, including more trade and investment and exchange among younger generations.
Reform and opening up have ignited investments and growth in Cambodia, Laos, Myanmar and Vietnam, the so-called CLMV countries, the SERI report continues. They account for less than 10 percent of the aggregated Asean economy but they have expanded at annual average rate of 6.1 percent since the 2008 global financial crisis. Their total population — 28 percent of Asean — makes the four attractive markets for consumer goods suppliers. Their strategic position between China and the Indian Ocean supports a pan-Asian infrastructure buildup; and the Mekong River running through the nations has the potential to generate 30,000 megawatts of power.
Still, foreign companies entering the CLMV countries cannot expect a smooth landing. Political risks and underdeveloped institutional frameworks to handle foreign businesses interests can easily upend plans. A comparison of worldwide governance indicators show that systemic risk in CLMV countries is higher than that in Middle East and North Africa, and they have yet to establish a stable market economic system. Vietnam, the first mover of the CLMV, has excessive investments, financially troubled state-owned companies and an unstable banking sector. There is also higher policy volatility, lack of skilled labor and a weak infrastructure in Cambodia, Laos and Myanmar.
The Asean economies should become increasingly attractive despite the risks. A strategy that focuses on specific areas and sectors will raise efficiency as it will be difficult to catch up to Japan in official development assistance and investment. In devising their approach, companies will need to consider the wide range in economic development, income levels and business environment among the member nations.
The first-mover member states, including Indonesia and Thailand, have the potential to become the next BRICs, and their vast domestic demand market should be targeted. By promptly responding to the consumption trends of younger generations and Muslims, new markets should be explored while expanding advancement into industrial and social infrastructure, which are expected to see fast growth. Finally, the government can examine making bilateral free trade deals with major Asean countries, which has greater market opening effects than the current Korea-ASEAN free trade agreement.
By Ahmad Cholis Hamzah*
Wherever I was in foreign countries in 1980’s if I introduced myself that I am from Indonesia, people that I met quickly replied “oh Bali” as they thought that Bali Island is not part of Indonesia; or some people replied “oh Indonesia, Soekarno”. Even when I performed my Haj (pilgrimage) in Mecca in 1998 an old Arab man that I met also replied by whispering to my ears “Indonesia, Soekarno”. Indeed, Soekarno the first President of Indonesia was popular in the world especially during Indonesian Independence and global Cold War period.
I do not want to enter into debate about the strengths and weaknesses of former President Soekarno; However it would be wise to say that people in ASEAN countries if they want to be a good ASEAN community they should know and understand key respective leaders and hero in each member countries. By doing this, there would be stronger ties between member countries to understand more about each other not only in term of international trade and investment but also in term of cultural understanding.
What Madame Tussauds in Bangkok does in presenting the wax figure of former President Soekarno is a good example on providing cultural and historical information to public in an ASEAN member country. Madame Tussauds Bangkok in collaboration with the Tourism Authority of Thailand’s Indonesia office unveiled the historically important wax work of the founding father of Indonesia President Soekarno on 24th September last year (2012). The event was witnessed by daughter of President Soekarno – Megawati Soekarnoputri who was also the fifth President of Indonesia. Madame Megawati donated her father’s traditional songkok cap to outfit the life-size figure, helping to create a sense of authenticity.
President Soekarno, who was born in 1901 in Surabaya, Indonesia, proclaimed his country’s independence on August 17, 1945, and served as its first president until 1966. He died in 1970.
Madame Tussauds Bangkok is a good example of a media that shows the magnificent wax works of prominent world figures, and provides more understanding about world history to public. However, it would be better for the purpose of ASEAN solidarity Madame Tussauds Bangkok should not only show world popular figures such as David Backham, Bruce Lee, Justin Bieber and Cristiano Ronaldo; but it should also show prominent leaders of each member country of ASEAN. We do believe that ASEAN countries are rich with respective, well-known figures that had noble contribution to the world order and prosperity.
Providing more information about respective leaders of ASEAN countries to public would strengthen the solidarity of people among ASEAN.
*) Alumni of University of London, U.K; Airlangga University and a lecturer at PERBANAS (Banking College) Surabaya-Indonesia.
By Ahmad Cholis Hamzah*
Public in Indonesia in general already know the relation between Indonesia and Malaysia in term of similar Malay culture, religion and language as well as cuisine. However, not everybody in Indonesia is aware of close relation between Indonesia and Kingdom of Thailand (of course people know very well Thai cuisine and fruits). It would better if people within ASEAN countries know the linkage of members country in the Association which make them uniting together in ASEAN.
The Ambassador of Kingdom of Thailand to Indonesia H.E Mr. Thanatip Upatising who came to Surabaya – the second largest city in Indonesia on March last year (2012) and gave lecture at Faculty of Economics Airlangga University opened the mindset of students about the closeness of Kingdom of Thailand and Indonesia. He said that both Indonesia and Thailand are founding members of ASEAN; and they do not share any common land border – or they are not immediate neighbours. However, both of them are actually have important historic linkages. Both Indonesia and Thailand already had relation during Sumatra based Srivijaya Kingdom (3rd-15th century) as well as the 8th century of Buddhist Sailendra Kingdom when the Borobudur was constructed. Borobudur that is located in Central Java is the world’s largest Buddhist place of worship, and is still the most popular destination of many Thai visitors to Indonesia. As far as I remember, my Thai colleagues at Nippon Maru (youth exchange program between ASEAN and Japan) in 1982 told me that up to know students of high schools in Thailand still learn the history of Srivijaya Kingdom in Sumatra and Majapahit Kingdom in East Java.
H.E Ambassador Upatising also said that the first Thai who had seen this magnificent cultural heritage in Indonesia was King Chulalongkorn the Great (King Rama V) of Thailand during his visit to Java almost one and a half century ago. (H.E Ambassador Upatising graduated from a respective University that uses the name of King Chulalongkorn – the University of Chulalongkorn). H.E Ambassador even disclosed an important history that former Prime Minister of Thailand, General Chavalit Yongchaiyuth, can trace his ancestry back 400 years to Central Java. And almost nobody knows in Indonesia that the grandson of Kiai Haji Ahmad Dahlan, founder of Muhammadiyah (the second largest Muslim organization in Indonesia), is now living in Thailand as an important Thai Muslim scientist and expert of Halal science. There is still “Masjid Indonesia” in Bangkok, built by Thais of Indonesian ancestry.
Therefore, H.E Ambassador said that Thai and Indonesians people are not only neighbours; but “we are relatives”.
Alumni of University of London and Airlangga University Surabaya and a lecturer at PERBANAS (Banking College) Surabaya.
Oleh: Ahmad Cholis Hamzah*
Bulan lalu tepatnya tanggal 23 Januari 2013, Perdana Menteri Inggris David Cameron mengatakan bahwa Inggris akan mengadakan referendum di negerinya pada tahun 2017 nanti, untuk mengetahui apakah rakyat Inggris setuju Inggris keluar dari persekutuan ekonomi Eropa atau Uni Eropa (atau EEC) atau tidak. David Cameron dalam berbagai kesempatan mengatakan bahwa kalau tidak ada perubahan atau reformasi yang mendasar di tubuh Uni Eropa ini.
Memang pada saat beberapa Negara anggota masyarakat Eropa kondisi ekonominya lagi terpuruk misalkan Yunani, Spanyol, Itali, Irlandia termasuk Inggris maka mulai muncul perasaan nasionalisme di Negara-negara itu yang tidak menginginkan semua aturan di Eropa di atur oleh Brussel – ibu kota Belgia sebagai markas perkumpulan masyarakat Eropa. Rakyat di masing-masing Negara Eropa mempertanyakan kewenangan yang dianggap terlalu otoriter para politisi dan birokrat masyarakat Eropa di Brussel. Misalkan saja ketika, Yunani ditawari dana talangan atau Bail Out dari Uni Eropa untuk menyelamatkan perekonomian negaranya, itu dengan syarat bahwa seluruh kebijakan anggaran negaranya harus tunduk pada aturan dan perintah dari Brussel. Pada saat ini Negara anggota Uni Eropa yang berpengaruh adalah Jerman dan Perancis.
Inggris sebagai Negara “besar” yang pernah “rules the waves” merasa tidak memiliki kekuasaan yang besar di Uni Eropa dan selalu mengecam kekuasaan Brussel.Tindakan David Cameron mengancam keluar dari keanggotaan masayarakat Eropa ini tentu mendapat kecaman para politisi Negara-negara anggota terutama Perancis dan Jerman. Beberapa politisi Inggris yang setuju dengan ancaman David Cameron mengatakan bahwa Inggris akan lebih makmur kalau keluar dari Uni Eropa. Buktinya dulu sebelum bergabung dengan masyarakat Eropa ini perekonomian Inggris meningkat dan menjadi salah satu kekuatan ekonomi dunia.
Kalau kita lihat kebelakang sebenarnya ketidak sukaan Inggris dengan dominasi Brussel itu bukan sekarang saja. Dulu ketika Perdana Menteri Inggris di pegang “the Iron Lady” Margaret Thatcher dalam pidatonya pernah mengatakan “ And I again emphasised that we would not be prepared to have a single currency imposed upon us, nor to surrender the use of the poundsterling as our currency”. Dia tidak setuju single currency Eropa yang mendominasi mata uang Inggris.
ASEAN sebagai persekutuan Negara-negara Asia Tenggara yang dibentuk berdasarkan keinginan untuk menjaga kemakmuran kawasan, perlu hati-hati dalam menjalankan roda organisasinya. ASEAN harus belajar pada kondisi “perpecahan” di antara Negara-negara anggota masyarakat ekonomi Uni Eropa yang menginginkan independensi kedaulatan masing-masing Negara. Para pemimpin ASEAN harus menyadari bahwa dominasi satu Negara atas Negara lain di persekutuan kekeluargaan seperti ASEAN ini akan mengakibatkan perpecahan. Para petinggi ASEAN harus tetap melestarikan dan mengedepankan cara musyawarah kekeluargaan yang dikenal dengan “the ASEAN way” dalam menyelesaikan setiap perselisihan yang mungkin terjadi di antara Negara Negara anggotanya.
*Alumni University of London, dan Universitas Airlangga Surabaya, dosen STIE PERBANAS dan STIESIA Surabaya.
THE UK is on a slow economic slide that will see it fall out of the world’s 10 biggest economies by 2050, PwC predicted this morning.
In 2011, the last year for which there is complete data, the UK economy was ninth biggest in the world, measured by GDP corrected for differences in prices, but it will fall to 11th by 2050, the accounting giant said.
This drop will see the UK eclipsed by Mexico and Indonesia as the populous developing countries overtake more stifled wealthy nations.
But top PwC economist John Hawksworth gave a positive spin to the data, pointing out that the falling ranking occurred despite rising output and social welfare.
“Although we expect the UK to drop out of the top 10 largest economies by 2050, the projected average UK growth rate to 2050 of just over two per cent is similar to France and stronger than for other large Western European economies,” Hawksworth said. “Germany, Italy and Spain face even bigger challenges than the UK from an ageing population and declining labour forces in the long run.”
Measured at constant 2011 prices the UK economy will more than double, from a size of around $2.29 trillion (£1.42 trillion) in 2011 to hit $3.50 trillion by 2030 and reach a total size of some $5.6 trillion in 2050.
The biggest change in PwC’s predictions is China’s rise to the top, taking first place from the US by 2017 in purchasing power parity terms, and by 2027 measured at market prices. The?US?has been the world’s largest national economy for almost a century.
Today’s table will be almost completely changed by 2050. Fourth placed Japan is set fall from fourth to fifth place, Germany from fifth to ninth and France from eighth to 10th.
Taking the place of these 19th-century industrialisers will be Brazil, Mexico and Indonesia, the financial services firm says.
Brazil will jump from seventh to fourth, Mexico from 11th to seventh biggest economy, and Indonesia will leapfrog Turkey, Canada, South Korea, Spain, Italy, the UK, France and Germany in its epic rise to the world’s 8th biggest economy.