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People-centered orientation key to New Southbound Policy
John Chen - Courtesy of Taiwan External Trade OfficeLast year, Taiwan announced its latest New Southbound Policy, with which it expects to forge closer cooperation with its long-standing partners
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John Chen - Courtesy of Taiwan External Trade Office
Last year, Taiwan announced its latest New Southbound Policy, with which it expects to forge closer cooperation with its long-standing partners. Recently, The Jakarta Post’s Linda Yulisman talked to John Chen, the newly-appointed head of Taiwan External Trade Office (TETO), to discuss the issue. Here are excerpts from the interview.
Question: Taiwan has launched the Southbound Policy a few times since the 1990s. What is the difference between this new policy compared to the previous ones?
Answer: The New Southbound Policy is more systematic, comprehensive and grassroots-orientated. When President Tsai Ing-wen unveiled it during her inauguration address on May 20 last year, she urged the central and local governments to join forces to promote the government’s New Southbound Policy, setting down a path toward economic prosperity and increased global reach.
The New Southbound Policy is meant to forge a sense of economic community between Taiwan and 18 countries — 10 members of the ASEAN, six South Asian states, as well as Australia and New Zealand — in order to boost the scope and diversity of the nation’s export economy while minimizing overreliance on any single market.
The previous policies were limited in terms of scope and were not very people-centered. However, the overall environments then and now are very different. This time, the whole system, including departments in our government and our private sector, are involved.
Another key difference is that this time the cooperation will be mutual and based on two-way benefits as we want to create a “win-win” situation for everybody. Therefore, our industries will benefit and so too will the industries of our counterparts in this partnership.
What are the priorities for implementing the New Southbound Policy?
There are four main focus areas to implement the New Southbound Policy, namely economic and trade cooperation, talent exchanges, resource sharing and regional connectivity.
In the area of economic and trade cooperation, promoting collaboration is key. We would like to forge new partnerships by integrating with the supply chains of other countries, connecting with their domestic demand markets and cooperating on infrastructure projects.
In terms of talent exchanges, our focus is on people. We wish to deepen bilateral exchanges and the cultivation of young scholars, students and industry professionals as well as share and complement human resources with partner countries.
Regarding resource sharing, we will capitalize on Taiwan’s soft power to promote bilateral and multilateral cooperation in culture, tourism, healthcare, technology, agriculture, and small and medium-sized enterprises.
On regional connectivity, we aim to systemize bilateral and multilateral cooperation with partner countries while strengthening negotiations and dialogue.
How will the New Southbound Policy be translated into the Taiwan-Indonesia relationship?
The new policy is very much in line with the objectives of the ASEAN community, focusing on people-centered activities and programs, be they economic, social or cultural.
In 2015, 117,743 Indonesian tourists visited Taiwan and 4,394 students were enrolled at Taiwanese universities and language centers. Furthermore, around 240,000 people, or 40 percent of Taiwan’s immigrant workforce, come from Indonesia. If you include Indonesians getting married with Taiwanese, the figure is more than 300,000.
That’s the largest diasporic community from ASEAN countries. So from the perspective of people-to-people relations, our relations are very close.
ASEAN has so far been the biggest destination for Taiwanese direct investment, but its figure in Indonesia is still lower than in its regional peers. How can this situation be improved?
According to our statistics, accumulated Taiwanese investment in ASEAN is more than US$90 billion. Indonesia is the second largest investment destination, accounting for $17.1 billion, following Vietnam with $30 billion.
Under the New Southbound Policy, we will deal first with supply chain integration in order to spur trade and investment.
This integration is needed in such sectors as information and communications technology (ICT), domestic demand-driven-industries, energy and petrochemicals, new agriculture and financial services.
Following general trends and the New Southbound Policy, Taiwan’s investment has been shifting from labor-intensive sectors to capital and technology-intensive sectors.
When President Joko “Jokowi” Widodo first took office, Taiwanese business people showed strong interest in investing in Indonesia. However, after more than two years, this expected investment has yet to come. How will you address this and into which sectors are Taiwanese firms keen to enter?
Rather than regarding Indonesia as a contract-manufacturing base for exports, Taiwan will forge a new partnership by integrating with its supply chain, connecting with its domestic demand market and cooperating on infrastructure projects.
We see that based on the capacities and demands of industries in Indonesia, Taiwan’s competitive industries should integrate with local supply chains. For instance, starting with the five major innovative industries — biomedicine, an Asian Silicon Valley, intelligent machinery, green energy technology and national defense, Taiwan can help set up internet-of-things systems for electronic toll collection, smart healthcare and intelligent school campuses.
We will also set up a Taiwan Desk using local resources to help overseas Taiwanese enterprises form business clusters. A single window for southbound economy and trade expansion will serve as the platform for seeking, creating, integrating and promoting bilateral trade opportunities.
Indonesia has an ambitious target to become one of the biggest fruit exporters in the region by 2025 and also wants to be self-sufficient in agricultural production. Taiwan has provided Indonesia with assistance in agriculture for 40 years. Are there any new plans to enhance this cooperation?
Taiwan and Indonesia signed an upgraded Agreement on Agricultural Cooperation on May 12 last year and held together the first agricultural consultative meeting.
The next plan in the pipeline is to help improve Indonesia’s existing irrigation system to increase harvest yields in designated areas. In addition to this, we intend to establish a “demonstrative zone” showcasing the most effective way to grow rice as a pilot project.
