T

he stage has been set for greater cooperation and new forms of integration in the region around Indonesia with the conclusion of the APEC and ASEAN summits earlier this month.

This has immense implications for Indonesia. It is clear that Indonesia operates in an increasingly dynamic global and regional landscape and must adapt itself to a changing environment. With Indonesia on the cusp of an economic take-off as we implement President Joko '€œJokowi'€ Widodo'€™s ambitious plans for infrastructure investment and bureaucratic reforms, Indonesia is well positioned to reap the benefits of these summits, which are broadly aligned with Indonesia'€™s
economic vision.

The Asia-Pacific Economic Cooperation (APEC) Summit in Beijing was significant. What started as a forum in 1993 to promote free trade and economic cooperation in the Asia-Pacific region had lost momentum in recent years. However, APEC as a platform for regional integration received a new lease of life and this will be positive for Indonesia.

First, China has introduced an initiative to relaunch the proposed Free Trade Area of the Asia-Pacific (FTAAP), which will give countries such as China and Indonesia, which are not part of the US-led Trans-Pacific Partnership (TPP) trade liberalization process, a better option to more independently nurture meaningful regional partnerships. The FTAAP is expected to build upon the gains made by the TPP and other regional free-trade initiatives such as the ASEAN-led Regional Comprehensive Economic Partnership (RCEP).

Second, improving infrastructure development and connectivity continues to be high on the priority list for APEC. With the flurry of multilateral FTAs in the pipeline, it is important for Indonesia to swiftly improve infrastructure and scale up the production value chain to burnish Indonesia'€™s image as an attractive investment destination. China'€™s ascendancy as an economic powerhouse has brought many positive spillovers to the wider region.

Encouragingly, China is stepping up these spillovers. In addition to the recent formation of the Beijing-backed Asian Infrastructure Investment Bank (AIIB), the US$40 billion Silk Road Infrastructure Fund, launched by China during the APEC Summit, means opportunities and financing for infrastructure investment and development will be more widely available for Indonesia. With ambitious plans and bold reforms in the pipeline, the government will explore viable channels to gainfully employ this capital in overhauling domestic infrastructure networks and repositioning our economy onto a higher economic trajectory.

Furthermore, boosting both regional and domestic connectivity through improving transport and logistical infrastructure and reducing bureaucratic red tape will help to facilitate cross-border trade and investment flows. Projects to expand five ports on the main islands across the Indonesian archipelago are in line with President Jokowi'€™s vision of restoring Indonesia as a maritime power reflecting a concerted push to improve infrastructure, allowing for better efficiency and reducing logistics costs for businesses and investors.

The 25th ASEAN Summit in Naypyitaw saw ASEAN go from strength to strength. The summit focused on implementing the ASEAN Economic Community (AEC) by Dec. 31, 2015. The AEC will be a game-changer economically as it aims to transform ASEAN into a single market and a much more competitive economic region, one that is also well integrated into the global economy.

Investors are confident about its success '€” already, foreign direct investment (FDI) in ASEAN has soared in anticipation of the AEC, reaching $122 billion in 2013 from $114 billion in 2012. With the common regional economic architecture in place, the vibrancy and vitality of the ASEAN economic bloc will be greatly enhanced, ensuring that the sterling growth in economic activity, FDI and trade flows in ASEAN economies continue, bringing about tangible benefits for Indonesia'€™s people and enterprises.

The government remains conscious of concerns raised that ASEAN integration could be challenging for Indonesia. It will not allow the country to be just a market for other countries'€™ exporters but will take steps to become an integral part of regional production networks, ensuring that fair gains from trade will accrue to Indonesians and improve their livelihoods.

It is therefore important for trade policies to be structured such that critical sectors, such as those related to food security, receive incentives that will protect Indonesia'€™s national interests and directly benefit the less well off.

It is also encouraging that ASEAN is starting to think of its agenda beyond the AEC'€™s establishment, with a task force comprising top officials from member countries instructed to define the post-2015 agenda.

The Naypyitaw Declaration, which emphasizes development of the post-2015 vision of the ASEAN Community, will serve to provide a coherent policy direction as ASEAN nations continue to take great strides in their growth and development. Going forward, ASEAN will strive to control its destiny and maintain its centrality in the region, while remaining relevant to the people and responsive to global and regional developments.

Greater and deeper regional cooperation in both the ASEAN and wider Asia-Pacific regions holds great promise for Indonesia, as it continues to integrate into regional production networks and open up to global markets. The efforts to liberalize trade and investment flows will bring about economic benefits to Indonesia.

However, while the country opens its doors to partner countries, it remains manifestly important that weaker domestic industries are gradually eased into the more open and integrated economy to ensure a smooth and seamless transition. Assistance will be rendered to firms that need to revamp and rethink their business processes to allow Indonesian enterprises to eventually transform into globally competitive businesses.

The flurry of recent summits shows that Asian integration and trade liberalization are very much a reality. Indonesia'€™s government will actively participate in the regional integration process and push through reforms in Indonesia so as to ensure that Indonesia derives the maximum benefits for its people.