Today, foreign trade and investment are no longer neutral regarding\nsecurity. Indonesia requires a foreign policy that is integrated with\neconomic policy, and vice versa.<\/p>\n
The President has inaugurated the new Minister of Foreign Affairs,\nArrmanatha Nasir, at a time when the boundaries between economic affairs\nand security are increasingly blurred. Indonesia\u2019s challenge is no\nlonger merely how to expand access for palm oil products or attract more\nforeign capital for mineral resource downstreaming. The difficult\nquestion is how to ensure economic openness without creating new\nvulnerabilities.<\/p>\n
This issue brings Indonesia to a relatively rarely discussed topic in\nJakarta: economic security. The background and track record of the new\nForeign Minister appear relevant to this intersection.<\/p>\n
Trade and Security<\/p>\n
For a long as time, Jakarta has been more focused on figures: how\nmuch foreign capital has entered, the development of exports compared to\nimports, or how many jobs have been created.<\/p>\n
These parameters are certainly important. However, over the last\ndecade, there have been relatively limited cases where trade and foreign\ninvestment have instead become sources of strategic vulnerability for\nthe state.<\/p>\n
Indonesia\u2019s participation as a third party in several WTO disputes\nregarding national security exceptions could serve as an illustration of\nJakarta\u2019s stance so far. Indonesia was not recorded as a third party in\ntwo important cases. First, Russia\u2014Traffic in Transit. In this dispute,\nthe WTO Panel had to interpret, for the first time, the extent to which\na country can use security exceptions to legitimise economic policies\nthat fundamentally conflict with international trade obligations.<\/p>\n
Indonesia was also not recorded in US\u2014Origin Marking. This occurred\nwhen the panel faced the question of how far national security claims\nregarding trade matters are self-judging, and how far such claims can\nstill be tested at the WTO.<\/p>\n
Of course, participation as a third party is not the only measure of\na country\u2019s attention to an issue. However, Indonesia\u2019s pattern of\nparticipation is interesting for comparison. Singapore, and several of\nour partners in BRICS such as India and Brazil, frequently act as third\nparties in related cases.<\/p>\n
A third party does not merely watch the disputes of other nations;\nthey have substantial interests in the dispute. Furthermore, this\nposition offers an opportunity to participate directly in the dispute\nprocess, including presenting the nation\u2019s position to the panel. This\ninvolvement is also one way for a country to closely follow how the\ninterpretation of WTO regulations evolves and is subsequently translated\ninto future economic policies.<\/p>\n
Reviewing Foreign Investment<\/p>\n
The same pattern is visible in the context of foreign investment.\nIndonesia indeed needs Foreign Direct Investment (FDI) and remains\ninterested in maintaining economic openness. However, openness does not\nmean every transaction must be treated as having the same risk profile.\nThe problem lies in the fact that Indonesia does not yet have an\ninstitutionalised mechanism for reviewing foreign investment.<\/p>\n
For some, the absence of such a mechanism is sometimes interpreted as\na form of<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/assessing-the-direction-of-indonesias-economic-security-1791255376", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }