The Tokyo mission

The Jakarta Post ,  Jakarta   |  Wed, 11/29/2006 12:47 PM  |  Opinion

In their summit in Tokyo on Tuesday, President Susilo Bambang Yudhoyono received assurances from Prime Minister Shinzo Abe that Japan would seriously consider more economic concessions for Indonesia, to enable the two countries to accelerate the signing of their final Economic Partnership Agreement (EPA).

In return, President Yudhoyono told PM Abe he would personally become involved in the ongoing liquefied natural gas (LNG) negotiations between state oil and gas firm Pertamina and its Japanese partners.

Indonesia is the largest LNG exporter to Japan, providing 24 percent of that country's LNG needs. Amid increasing domestic and international demand for gas, Pertamina has told Japanese importers it will cut back on LNG exports to the country. Market mechanisms, however, rather than political considerations will eventually determine the results of the gas negotiations.

Apart from the economic agenda, the North Korean nuclear issue also was a topic of discussion. It would be in the interest of everyone if President Yudhoyono was able to exercise his influence and negotiating skills to persuade Kim Jong-ill to return to talks over his nuclear program.

The principle of give and take is the foundation of any relationship. The President knows that Indonesians want concrete results from his talks with PM Abe that can help lift the country's ailing economy. And his mission to Tokyo has been quite fruitful, but the benefits will only come after the follow-up work is done.

Concerning bilateral issues, Japan agreed to slightly relax its strict immigration laws and allow Indonesian nurses and hotel trainees to work in Japan. Jakarta desperately needs to send more workers abroad, with more than 40 million people in the country currently unemployed.

Before the Economic Partnership Agreement talks, Tokyo only allowed a small number of unskilled workers from Indonesia to work on a contract basis for a maximum of three years in Japan, under a ""training program"" scheme.

With its rapidly aging society, Japan needs to be more realistic about its extremely tight immigration policy. Indonesian workers are popular with Japanese employers, because they are seen as loyal and less likely to complain than workers from other Asian countries.

However, compared to other members of the Association of Southeast Asian Nations (ASEAN), to the frustration of Tokyo Indonesia seems to be the most reluctant to finalize the EPA negotiations because the government believes it will get little compared to what it has to give to Japan.

Some Indonesian officials, including Vice President Jusuf Kalla, think that when it comes to economic negotiations, Japan gives too little while demanding too much, and that other economic giants, especially India and China, are easier to deal with.

Japanese investors, in the meantime, keep complaining because like other foreign investors they have not seen significant progress achieved by the Indonesian government in eradicating corruption, poor governance and legal abuses.

Both Indonesia and Japan are facing drastic global geopolitical changes. While Japan is still the world's second most powerful economy after the United States, the rise of China and India have clearly taken away significant parts of Japanese economic might in the region.

Japan needs a strong Indonesia to counter China's rising power in Asia, especially in the Southeast Asian region, while Indonesia cannot put aside Japan in terms of investment, although China has been quite aggressive in pouring investment into the region, particularly in the energy and natural resources sectors.

However, we must note that taking things for granted is probably one of Indonesia's most disturbing traits, at least in dealing with other countries. Many Indonesians still have the illusion that the country is too lucrative and too strategic not to be given top priority by other nations.

Indonesians seem to believe Japan is the largest moneylender and largest investor in Indonesia because their country is so important in terms of natural resources and market. For them, Japan has no choice but to be loyal to Indonesia because of its huge economic potential and strategic geopolitical position.

On Japan's side, there is also often the view that it has contributed a great deal to Indonesia's development and that Indonesia should be more grateful. While Japanese complaints about the investment climate here have merit, many government officials get irritated with the repeated criticism. The situation is worsened by the fact that Japan no longer has a powerful lobbyist on Indonesia, after the death of politician Michio Watanabe.

The two sides need to overcome these defensive attitudes, because cooperation between Indonesia and Japan will serve not just the interests of the two countries but also the whole region.

Indonesians want concrete results from this Japanese trip, and President Yudhoyono must realize the growing impatience of his people. Japan perhaps can help, but again market mechanisms and the ongoing geopolitical changes should be considered as the primary factors in determining the success of the President's mission to Japan.

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