Public Discourse, Indonesian Embassy The Hague, 6 June 2006

By Gunaryadi

Following the visit of Prime Minister, Jan Pieter Balkenende to Indonesia in April 2006, another visit is planned by the Dutch Minister for Economic Affairs, Laurens-Jan Brinkhorst in 31 May-6 June 2006 (Ministerie van Economische Zaken, 5/06). His entourage will comprise dozens of Dutch businessmen for a matchmaking mission (bedrijvenmissie) with Indonesian business communities in Jakarta and Surabaya. Minister Brinkhorst is also scheduled to have rendezvous with some members of the United Indonesia’s Cabinet.

It will be the second successive visit made by Mr. Brinkhorst as the Minister of Economic Affairs since 2005 when he addressed the Mixed Commission on Economic Cooperation (MCEC) forum last year in Jakarta to boost economic cooperation between Indonesia and the Netherlands.

Minister Brinkhorst’s leadership in the mission reflects its high profile. This significance can be compared, for example, to similar mission to Australia about a month earlier, which was only led by a deputy minister.

In 2005, the bilateral trade amounted to US.60 billion that placed the Netherlands as Indonesia’s largest trading partner in EU after Germany (Indonesian Ministry of Trade, 2006). This is a raise of about 33% from 2004. In the same year, the trade balance remained advantageous to Indonesia: .23 billion export and 9 million import. Moreover, for Indonesia, in 2005 the Netherlands was the 5th largest investor with the value of 8 million (Jakarta Post, 7/4/06).

Somehow the visit signifies a splendid appreciation and confidence to Indonesia’s recovering economy. How comes? In 2004, Netherlands export valued at about 9.1 billion, and import at around 3.7 billion (CBS StatLine, 25/5/06). About 70% of this trade activities occurred with other EU’s member states, and the lion’s share of the rest 30% controlled by the U.S. With a total 2.8 billion, its trade volume with Indonesia is consequently a tiny fraction in the Dutch overall trading portions.

The visit itself is crucial on two pillars. First of all, the classical hurdle in Indonesia-Dutch relations has been removed by The Hague’s recognition of Indonesian independence of 17 August 1945. This new chapter of relations should not merely be put in the political context but it is also expected to augment economic cooperation. To locate it in a larger context of bilateral cooperation principle, we have entered an era of—borrowing the term used by the former Minister for Development Cooperation, Eveline Herfkens—“smart” and “mature” relations.

Second of all, it means the Netherlands has shown determined commitment to prioritise Indonesia in its foreign trade relations, even after the establishment of the new European Neighbourhood Policy (ENP) mechanism. As a matter of fact, the European enlargement in 2004, and possible accession of the candidate member states in theory would undermine Indonesia’s competitiveness vis-à-vis the new acceding countries. This latter reality proved that the fear of “role conception” shift which might downgrade Indonesia on the map of Dutch foreign policy priority untrue. Instead, this reality should push Indonesia to make an optimum use of the bilateral economic cooperation as long as the engagement falls within the ambit of the EU’s supranational rules of laws.

Although the visit will be emphasised in infrastructure and energy sectors, for its part, Indonesian government should encourage affective implementation of the agendas formulated by the six working groups posed in the Mixed Commission on Economic Cooperation (MCEC) in February 2005. Thorough evaluation should be made on the progress of plans of action reached in the 18th MCEM in the areas agriculture, energy, housing and spatial planning, public works, research and technology, trade and investment, and transportation and communication.

Jakarta should also seize the opportunity to lobbying for reduction or moratorium of Indonesia’s debts arranged through multilateral institutions where the Netherlands is also a member. Another important issue of lobbying should be on persuading for more favourable preferential tariff regulations for Indonesian goods to access the EU’s markets. Reciprocally, Jakarta should consider as well conceding of some extent of regulatory incentives to exert a pull on larger magnitude of economic cooperation with Dutch partners.

It is hopeful that respective Indonesian businessmen will be well prepared to take hold of this golden opportunity to discuss concrete plans with Dutch colleagues. It is expected from the matchmaking meetings, B-to-B’s memorandum of undertakings can be materialised into feasible and actual business projects, and later told as another success story of linking the Indonesian and Dutch economies.

And to the Dutch delegation, I wish a nice trip and good days of presentation and matchmaking. Veel succes daarmee!
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Gunaryadi teaches at the Indonesian Embassy School in the Netherlands. This writing represents his personal view.

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