Indonesia is not yet a strategic partner of the United States

Indonesia is not yet a strategic partner of the United States, JAKARTA – The Center for Strategic and International Studies (CSIS) considers that Indonesia is not yet a strategic partner of Indonesia. America (US) National trade, comparison with neighboring countries, and from the investment side.

This argument was expressed by a researcher in the field of economics CSIS Dandy Rafidrandi, on CSIS Media Briefing: Reviewing the outcome of the bilateral meeting between President Joko Widodo and President Joseph Biden, Thursday (16/11/2023)

In terms of international trade, Tandy estimates that over the past decade, the value of Indonesia-US trade has been below potential with still limited growth.

He gave an example of Indonesia-US trade reaching US$40 billion by 2022. Then, in proportion it is less than 1% of total US trade.

“So we can see that in terms of international trade between Indonesia and the United States, it’s actually quite insignificant,” Dandy explained.

Indonesia-US exports to double from 2012 to 2022 with growing trade surplus. Imports from the US stagnate.

Compared to China, Indonesia’s export performance has tripled over the same period, i.e. from 2012-2022. Meanwhile, imports have also doubled.

“So we actually see that this increase is not very high compared to China. “Well, it tells us whether it is true that Indonesia is considered economically strategic by the US,” he said.

Then, if we look at Vietnam’s exports to the US during the same period, a five-fold increase in exports has been reported. Considering these data, then Size-Nia It is different from Indonesia.

Differences between Indonesia and Vietnam and China

Dandy explained that there are many reasons why Vietnam-US trade is fantastic. First, Vietnam has had a bilateral trade agreement with the United States since 2001.

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Compared with Indonesia, it is a significant foundation in trade building, bilateral investment between the two countries, international trade administration management and better trade facilitation.

In terms of investment, American investors in Indonesia still focus on traditional sectors or Principal Department. Examples include oil and gas and mining.

Then, compared to China, Indonesia is considered to be more intensive in the past ten years not only in the primary sector, but also in infrastructure and investment in labor intensity or manufacturing.

Meanwhile, investment in milestones from China is now visible, for example the Jakarta-Bandung high-speed train. Meanwhile, with Japan it is the MRT project.

“No, What about America? If Freeport seems like it’s been around for a long time, yes, the signs are. So we want to show that Major investment “This is also important,” he explained.

He assessed the US-Indonesia Comprehensive Strategic Partnership (CSP) as not very robust, especially compared to Vietnam. At least for now, he offered Indonesia a better strategy.

According to him, there is a need for momentum for international economic cooperation between Indonesia and the United States, ie Channel Reforms, facilitation and development of future trade policies.

By implementing this, Indonesia is believed to be able to gain international economic cooperation, which is more comprehensive and more strategic, especially recently with US cooperation.

Then, from Uncle Sam’s point of view, strengthening the domestic economy is considered America’s priority, and America will even hold elections next year.

With this in mind, Indonesia is also thought to be wary of possible domestic political changes that could change the direction of US foreign policy. For example, if former President Donald Trump is re-elected, the idea is to raise import tariffs to 10% on all goods imported by the United States.

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“Therefore, we see it as important for Indonesia to be more proactive in following up on the results of yesterday’s talks on the meeting between US President Joe Biden and President Jokowi on November 13, 2023,” he said.

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