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Foreign Ministry gears up for new tasks
The Foreign Ministry is preparing adjustments to its portfolio expansion, as questions linger about how the expansion would address Indonesia’s weak exports and current account deficit
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span>The Foreign Ministry is preparing adjustments to its portfolio expansion, as questions linger about how the expansion would address Indonesia’s weak exports and current account deficit.
President Joko “Jokowi” Widodo said last week that he planned to overhaul the Cabinet to address economic issues and boost exports and investments, including by giving the task of improving exports to the Foreign Ministry, so that it would perform not only political diplomacy, but also economic diplomacy.
“We will follow the direction of [Jokowi’s planned] policy; what was already stated in public and indicated that the ministries in question would have their mandates adjusted,” Foreign Ministry acting spokesperson Teuku Faizasyah said recently.
The Foreign Ministry, according to Faizasyah, would make preparations based on the information received so far pending an official announcement that would allow the ministry to focus on making definite adjustments.
Jokowi said while the task to improve exports would be given to the Foreign Ministry, the Trade Ministry was to be merged with the Industry Ministry to focus on domestic trade. A new investment ministry tasked with bringing in foreign investment is also in the works, with the Investment Coordinating Board (BKPM) slated to be positioned under it.
But Jokowi’s plans raises more questions than it answers, especially on how moving the portfolio from the Trade Ministry to the Foreign Ministry would improve exports and eventually the current account.
Teuku Rezasyah of Bandung’s Padjadjaran University said the plan needed further study and Jokowi should have more consultations with various stakeholders, including businesspeople, investors and academics, on how to transform this policy into a long-term strategy.
“After the political decision was made, there must be a change in management, particularly on how to merge two institutions with different values […], which cannot be done instantly,” he said.
According to Rezasyah, past experiences showed that negotiators from the Trade Ministry focused more on economic gains and losses and did not consider Indonesia’s positioning in geopolitics.
“What usually happens is when the Foreign Ministry clears the way [for a trade negotiation], it is the Trade Ministry that engages in the negotiations. The Foreign Ministry was often left disappointed because the Trade Ministry did not connect [international] trade with foreign policy,” he said.
Faizasyah said the Foreign Ministry had experienced organizational restructuring in the past. “The ministry was previously divided [into units] based on thematic issues, like politics and economy. Then, we had internal amalgamation based on regions that resulted in some of the current units,” he said.
The Foreign Ministry’s last major reform happened in 2002 under then-foreign minister Hassan Wirajuda, who revamped the ministry’s function-oriented structure and created new directorate generals based on geographic responsibility — Asian, Pacific and African affairs; and Europe and the Americas; as well as ASEAN affairs.
The change was made a year after the transition of the ministry’s leadership from foreign minister Alwi Shihab, who was appointed by late president Abdurrahman Wahid to Hassan, who worked for president Megawati Soekarnoputri.
“Historically, the ministry has experiences with internal adjustments, but each [future] adjustment must go through a restructuring process based on directions from relevant offices — whether from the Finance Ministry or a ministry handling the administration of personnel,” Faizasyah said.
“So we are anticipating this process, but, of course, before we move too far we are waiting for clearer information,” he said.
Indonesian Chamber of Commerce and Industry (Kadin) deputy chairwoman for international relations Shinta Widjaja Kamdani said, however, the planned Cabinet restructuring, which was aimed to streamline efforts to boost exports and create a favorable business climate for investment, might not be the solution.
The government, she said, should instead improve the existing cooperation mechanisms between ministries, their checks and balances, as well as create an effective grand design of national policies — all without having to spend large amounts of money to move or create new institutions.
“What has been happening so far is that the ministries are highly polarized because they focus on their own mandates and think that flexibility means risking violating the mandates. They rarely want to cooperate or compromise with one another, even under the President’s economic reforms”, Shinta said.
“I think the key is not in the formation of new ministries but in strengthening checks and balances of each ministry, particularly in terms of their roles toward the business sector, exports and investment climate in Indonesia,” she said. “This can actually be done without making drastic institutional changes because the coordinating ministry could lead the task to improve ministries under its jurisdiction.”
