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US `to secure energy investment' in Indonesia

While US President Barack Obama's agenda during his visit to Indonesia this month remains sketchy, experts say the meeting between the two leaders will focus on economic potentials, especially the expansion of US energy investment

Lilian Budianto (The Jakarta Post)
Jakarta
Fri, March 12, 2010

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US `to secure energy investment' in Indonesia

W

hile US President Barack Obama's agenda during his visit to Indonesia this month remains sketchy, experts say the meeting between the two leaders will focus on economic potentials, especially the expansion of US energy investment.

Speaking at a seminar, the Indonesian Institute of Sciences (LIPI) researcher Siswanto said both Obama and President Susilo Bambang Yudhoyono, had been preoccupied with their own domestic economic situation and pressure to boost investment as well as create jobs.

"Economic interest will top the agenda in their meeting because both Obama and Yudhoyono are facing similar domestic pressure. Both will be looking to expand trade and investment and put other issues, such as counterterrorism and the Afghan war, on the back burner," he said.

In a speech last month, Yudho-yono said Indonesia's foreign diplomacy had to translate into trade and investment cooperation as Jakarta needed investment worth US$203 billion a year to reach economic an growth rate of 7 percent by 2014.

US companies have dominated the local mining sector with large investments from ExxonMobile and Freeport. Budiarto Shambazy, a Kompas daily columnist and lecturer at the University of Indonesia, cited a precedence surrounding the visit of then secretary of state Condoleezza Rice and then president George W. Bush to Indonesia in 2006.

The visit resulted in an agreement for ExxonMobil to become the operator of the Cepu oil block after a four-year dispute with state-owned enterprise Pertamina.

"ExxonMobil is now vying for the Natuna block and the government has indicated it will not give the operation to Exxon. But let's see what's the result is after Obama's visit," he said.

Another LIPI researcher, Ikrar Nusa Bhakti said Washington's foreign diplomacy rested heavily on how it could expand its oil and gas resources, as attested by its wars in Iraq and Afghanistan.

"Energy investment will become the main highlight because that is the main US interest in Indonesia.

"The US will be under greater pressure now to secure potential energy investment in Indonesia, which China has also been vying for," he said.

Siswanto said that US energy interests would overwhelm sensitive issues, such as the progress of human rights in Papua, which has been one of Congress's main concerns in regard to Indonesia.

"It is a dilemma for the US because Democrat leaders are historically concerned with human rights issues, but with the current economic downturn, they might have to relax on that for the sake of economic interests," he said.

Obama is expected to visit Indonesia in the third week of March to launch a comprehensive partnership with Yudhoyono. Officials said the comprehensive partnership covered a wide range of areas, from economic, health and military sectors, but refused to into the detail.

Shambazy said the new biomedical research between Indonesia and the US, following the closure of the joint Namru naval research, might also be aimed at securing the economic interests of the US.

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