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Economy key as Indonesia raises sails in South Pacific
The South Pacific Ocean has become a focal point of Indonesia’s economic and development diplomacy, with the nation’s top diplomat meeting with counterparts from the region that is fast becoming a battleground for influence among the world’s superpowers
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span>The South Pacific Ocean has become a focal point of Indonesia’s economic and development diplomacy, with the nation’s top diplomat meeting with counterparts from the region that is fast becoming a battleground for influence among the world’s superpowers.
On the sidelines of the 12th Bali Democracy Forum, Foreign Minister Retno LP Marsudi held a series of bilateral talks with ministers from Pacific island countries, namely Fijian Foreign Minister Inia Seruiratu, Solomon Islands Foreign Affairs and External Trade Minister Jeremiah Manele and New Zealand’s Pacific Peoples Minister Aupito William Sio.
Regarding her meeting with Seruiratu, Retno said they had talked about elevating their countries’ political relationship into an economic relationship.
“We discussed the possibility of creating a preferential trade agreement with Fiji. The academic analysis has been concluded and hopefully by the beginning of next year we will start the negotiations,” Retno told journalists in Nusa Dua, Bali, on Thursday.
Indonesia had been working on its economic partnerships with countries like Fiji, with Retno saying that Indonesian products were “slowly but surely” entering the Fijian market. One such product is Indonesia’s instant noodles, which Seruiratu said were popular among Fijians. “[The Fijian minister] specifically asked for help converting commodities into retail products,” she said.
In addition to trade, both sides committed to expanding their cooperation in the agricultural and maritime sectors, Retno said, announcing a plan to codevelop a seaweed cultivation center.
During a meeting with the Solomon Islands’ top diplomat Manele, Retno said the two discussed opportunities for economic cooperation, particularly in infrastructure development.
The two nations signed agreements on a development cooperation framework and a grant to build a multipurpose futsal arena ahead of the 2023 Pacific Games, which the Solomon Islands will host.
The grant will be disbursed through the Indonesian Agency for International Development (IndoAID), a body that was set up to manage a Rp 3 trillion (US$213.4 million) endowment fund for international assistance, as part of the South-South Triangular Cooperation scheme.
This year, the government has disbursed aid to at least five countries in the South Pacific region — Tuvalu, Solomon Islands, Fiji, Nauru and Kiribati — as well as the Philippines and Myanmar.
“We have signed the framework of cooperation that will open the way for us to conclude other agreements in specific sectors like education, investment and trade and sports. We really appreciate and would like to thank the government and people of Indonesia for their support and assistance,” Manele told journalists on Thursday.
Thursday’s meetings fall in line with Indonesia’s efforts to increase its presence in the South Pacific, where there is “tremendous untapped potential on the economic front”, Retno wrote in an op-ed in The Jakarta Post earlier this year.
She said Indonesia’s trade relations with South Pacific countries remained relatively minor, valued at just $450 million, with factors such as distance hurdles to increased investment cooperation.
She said developing connectivity was key to unlocking this potential.
Indonesia’s ambitious goal to become a leader in the Pacific was laid out in the top diplomat’s meeting Thursday with New Zealand’s Sio, in which they discussed a broader partnership for a region traditionally derided as an “American lake” or as “Australia’s backyard”.
“New Zealand has a close relationship with [countries] in the Pacific, and Indonesia is surely making the Pacific one of its main foreign policy priorities,” she said, without elaborating.
“If these powers are gathered, there will be a tremendous impact.”
Jakarta and Wellington are looking to organize another Pacific Expo as a starting point to foster closer economic ties with the region, she said.
Indonesia is also planning to channel its growing appetite for infrastructure development by hosting a new Indo-Pacific forum next year.
Previously, President Joko “Jokowi” Widodo suggested the adoption of an ASEAN Outlook on the Indo-Pacific, a term observers say the United States intends to use to hedge against Chinese economic expansion in a region straddling the Indian and Pacific oceans — including the South Pacific. Both superpowers see the region as an emerging battleground for influence.
However, Indonesia, well aware of the consequences of letting regional powers compete for dominance, has sought to leverage the 10-nation bloc’s convening power and moderate relationships through existing regional mechanisms. (tjs)
