Jakarta, ID
Monday, May 28 2012, 13:27 PM

Headlines

WTO meet, the Copenhagen summit and our own messy house

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World Trade Organization director-general Pascal Lamy closed the three-day ministerial conference here on Wednesday with all ministers agreeing it urgent to conclude the Doha Round on trade negotiations before its 2010 deadline.

Developing countries complained that industrialized countries, especially the United States and the European Union, had done too little in opening their markets and reducing its excessive subsidies on agricultural products, and had asked too much from the poorer nations to liberalize their markets.

The same scene will happen again in Denmark. The United Nations summit on climate change will be attended by more than 90 heads of government and state, including Indonesia's President Susilo Bambang Yudhoyono. Both developing and developed countries will blame each other over who is responsible for the planet's devastated environment.

The President will make statements about his government's commitment to produce environmentally friendly products like crude palm oil (CPO). Importers in industrialized nations will then do everything to control the price of the CPO. And when they try to prove that we have damaged our environment for the sake of the CPO exports we will need to do more than just complain that we receive unfair trade treatments from advanced nations.

Should industrialized countries be blamed for the misery of developing countries like Indonesia? How about having a look at the problems in our own backyard?

"We have a lot of homework that we have to finish right now," Indonesia's Trade Minister Mari Pangestu replied, when asked what the country should do to be able to win in the tough international market competition.

In her address to the conference, the minister pointed out how Indonesia, like other countries, is facing increased protectionism against its exports.

"Under these conditions, all of us face domestic political pressures. What matters is that we must exercise leadership in resisting not taking any action to move in the right direction or even worse undertaking inappropriate actions which taken us away from the path of necessary domestic reforms," Mari said.

She acknowledged that it is difficult to convince the Indonesian public of the necessity of our WTO membership because WTO issues are often far beyond the everyday man's comprehension. People want quick fixes for our economic difficulties, and the WTO is often perceived as a stumbling block created by industrialized nations to block our exports. But if we look deeper into our own home we will soon find the roots of the problems.

Quoting the data on competitiveness from the World Economic Forum, which was presented to her on Tuesday, the minister cited several fundamental problems that needed to be overcome immediately if Indonesia wants to remain competitive in the global market.

"Infrastructure, logistics, good governance, education and health are among the factors that we should deal with, effectively and immediately," Mari said.

Actually there is nothing new in her remarks about the negative list.

In the last 10 years, local and international investors and financial institutions have long been complaining about the bottlenecking dilemma. There are severe power shortages and very poor infrastructure. The controversies on the attempts to criminalize two Corruption Eradication Commission (KPK) deputies and the Bank Century bailout scandal will only worsen Indonesia's competitiveness in wooing foreign direct investment.

But following the minister's activities since Sunday here shows at least a glimpse of hope.

Her delegation comprises not only officials from her own ministry, but also officials from the ministries of foreign affairs, industry and finance. There was a strong coordination among the ministries' officials. In the past, that would have been a rare scene at an international forum.

Indonesian officials, however, said no matter how long and hard they fight in the international arena in defense of their country's interests, as long as the situation at home is still messy, their hard work will prove futile.

Mari often talks about creative industry. This shouldn't apply to just industry, the government can do much in developing our economy and in providing more jobs for our skilled workers abroad just by being more creative. We need to learn a lot from other developing countries, such as the Philippines and India, on how to enter the international labor force by providing more internationally certified workers like nurses, technicians and seamen. We do not need to wait for the WTO to help to send our skilled workers abroad.

Indonesia is still in a very long way off overcoming the fundamental economic stumbling blocks, especially on good governance. We should not be too quick to blame advanced countries for the misery we that we have created with our own two hands.