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Asian-African network: What Africa is to Indonesia

Indonesia is hosting the 60th commemoration of the Asian-African Conference of 1955 and the one-decade commemoration of the New Asian-African Strategic Partnership (NAASP) this week

Sandy Darmosumarto (The Jakarta Post)
Jakarta
Wed, April 22, 2015

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Asian-African network: What Africa is to Indonesia

I

ndonesia is hosting the 60th commemoration of the Asian-African Conference of 1955 and the one-decade commemoration of the New Asian-African Strategic Partnership (NAASP) this week.

The NAASP remains the only forum that brings together countries from Asia and Africa. Further is our government'€™s program in attaining as much economic benefit as possible from its diplomacy exercise.

This objective of maximizing economic gains is crystal clear, as reemphasized by President Joko '€œJokowi'€ Widodo when opening a meeting with Indonesian heads of diplomatic missions in Jakarta in February.

Intensifying economic diplomacy '€” namely, reversing negative trade balance (which entails higher penetration of Indonesian exports into foreign markets) and bringing in Indonesian investments to foreign countries '€” are among priorities in our diplomacy.

While the priority of economic diplomacy has shifted from traditional to non-traditional countries, the decision is very realistic.

Since 2009 average growth of non-oil Indonesian exports to non-traditional partners '€” including countries from Africa, Central-Eastern Europe, Central-Southern America, as well as the Caribbean '€” has been over three times larger than that to traditional partners.

Africa hosts most of our non-traditional trade partners. The 54 African countries that are part of the 109-countries in the Asia-Africa network are among them; and Indonesia possesses diplomatic relations with 49 of them.

Other regions have much less Indonesia'€™s non-traditional trade partners (with whom Indonesia possesses diplomatic ties) '€” 21 in Central-Eastern Europe, 18 in Central-Southern America and 11 in the Caribbean.

From these partners, countries with a large market base, as shown by the size of population, and purchasing power, as shown by the gross domestic product (GDP) purchasing power parity (PPP) per capita, are legitimate targeted trade partners that could maximize economic benefits from Indonesian export activities.

Based on the 2007-2013 World Bank data set, countries possessing relatively high average growth in market base are those in Africa and Central-Southern America.

The average population growth for the 49 African countries and 18 Central-Southern American countries are, respectively, 2.32 percent and 1.28 percent.

In contrast, average growth in market base for the 21 Central-Eastern European and 11 Caribbean countries is insignificant.

Likewise, a relatively high average growth in purchasing power also accrued to the 49 African and 18 Central-Southern American countries '€” respectively at 2.90 percent and 3.43 percent.

In contrast, purchasing power in the 21 Central-Eastern European and 11 Caribbean countries remains below that of Africa and Central-Southern America '€” respectively at 2.29 percent and 0.70 percent.

In 2013 alone the population of the 49 African countries '€” over 1 billion people '€” was over twice that of the 18 Central-Southern American countries.

Moreover, these African countries remain the main non-traditional export destination for Indonesian non-oil goods '€” with export value reaching US$5.5 trillion (over four times the value of Central-Southern American countries) in 2013 alone.

A deeper analysis of export trends (based on the 2009-2013 data set) serves to support this claim. Out of 15 non-traditional trade partners in which Indonesia'€™s exports are experiencing the greatest average growth in market penetration, nine are African countries, namely Somalia, Djibouti, Mauritania, Swaziland, Senegal, Burkina Faso, Mozambique, Kenya and Congo.

In export volume, again nine out of Indonesia'€™s 15 non-traditional export destinations are African countries, namely Botswana, Swaziland, Guinea-Bissau, Somalia, Burkina Faso, Benin, Mali, Ghana and Niger.

With much foregone economic benefits at stake in Africa, Indonesia should reiterate deeper engagement with African counterparts, to raise the economic rewards from years of political and diplomatic relations that Indonesia has invested in Africa.

With 16 Indonesian diplomatic/consular missions currently in Africa, significantly more than in other regions where Indonesian non-traditional trade partners are located (that is, nine in Central-Southern America, eight in Central-Eastern Europe and one in the Caribbean) '€” and as Indonesia is the only Southeast Asian country with a permanent observer in Addis Ababa, the Ethiopian capital that hosts the African Union (AU) headquarters as well as the city where most permanent representatives to the AU reside '€” Indonesia has strong modalities to pursue such a mission.

In bilateral relations, Indonesia has been very active in intensifying communications and ensuring political commitments with various African counterparts.

Since taking office in October 2014, our foreign minister has met with more African counterparts than with any others considered to be non-traditional trade partners.

Since January 2015 alone, Foreign Minister Retno LP Marsudi secured intensive consultations with nine African leaders and ministers, which has led to much-needed bilateral consultation forums '€” one with Ethiopia and another with Sudan '€” that should bridge the vision of leaders from both sides into concrete business practices.

Reinvigorating the NAASP aims at formulating various feasible cooperation programs between the countries involved.

Such a program is in line with Indonesia'€™s efforts in, for instance, intensifying business ties through the Asian-African Business Summit held in conjunction with the Asian-African Summit.

Consequently, amending best-practice mechanisms underlying the Asia-Africa cooperation becomes a natural follow-up step after Indonesia became a permanent observer to the AU since January 2012.

After all, when the whole of Africa claims that the Asian-African network is still relevant, as recognized in the latest AU Summit, there is no basis for a single country like Indonesia to claim the opposite.

A robust NAASP is important to facilitate Indonesia'€™s efforts in shaping a conducive trade and investment landscape in Africa; a landscape that would not only facilitate Indonesian exports, but also more Indonesian investments into Africa.

The latter goal remains in the pipeline.

However, scaling up export penetration into Africa naturally puts in place the political, business and market network required for any successful foreign investment.

It will not be too long before Indonesian companies increase their direct investment into Africa, especially, as reported by The Economist, when medium-sized investments in consumer products '€” that is, the dominant Indonesian products going into Africa '€” are currently rated as the most profitable in many African markets.

The urgency to assist Indonesian companies in scaling up exports and investment into Africa boils down to attaining broad consensus in political commitments among leaders, ministers and business communities.

And hence, the relevance of not only the Asia-Africa forum itself, but more importantly the relevance of the Asian-African Summit meetings to ensure commitments, stand a better chance of being respected by all sides.
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The writer works at the Foreign Ministry.

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