Although Indonesian President Joko Widodo on Oct. 26 told US President Barack Obama that Indonesia plans to join the omnibus
\nTrans-Pacific Partnership that the US has forged with 12 Pacific Rim nations, qualifying for the deal and overcoming domestic
\npolitical opposition will both be major hurdles.<\/p>\n
Already, former President Susilo Bambang Yudhoyono and the opposition Great Indonesia Movement Party (Gerindra), chaired by
\nPrabowo Subianto, Jokowi\u2019s rival in last year\u2019s presidential election, have criticized the president\u2019s decision to go ahead with
\nthe TPP, as the trade pact is known.<\/p>\n
The initial impact of Jokowi\u2019s surprise pledge, however, is to set a tone of wanting a more open economy, which in itself is
\nseen by observers as a positive step in the face of years of economic nationalism. Joining the next round of talks on the TPP
\nwill be at least two years away, officials say.<\/p>\n
Jokowi has made some progress against a once-fearsome opposition coalition in the legislature engineered by Gerindra after the
\nJuly 2014 election. The Golkar Party, the largest member of that coalition, this week announced its support for the administration.<\/p>\n
As Jokowi\u2019s presidency has worn on, he has steadily peeled off other parties and continued to accrue power. He has faced down
\nsome of the moves by his troublesome patron, Megawati Sukarnoputri, the head of his Indonesian Democratic Party of Struggle
\n(PDI-P), but he doesn\u2019t dominate the party structure by any means.<\/p>\n
Trade deal<\/p>\n
Although the planning for the TPP began under the administration of George W. Bush, Obama has made the pact a central goal of
\nhis presidency, which ends in late 2016. The administration hopes for a vote on the deal before Obama leaves office, which may
\nbe tough.<\/p>\n
Hillary Clinton, the leading Democratic candidate to take over, has withdrawn her support for it. A loose amalgam of opponents
\nincluding organized labor, environmentalists and various advocacy groups have protested against the treaty, partly because of
\nthe huge scope, clauses on patents and other issues that appear to protect vested interests and the secrecy under which it was
\ndrafted.<\/p>\n
The agreement, which must be ratified by the legislatures of the 12 member states, faces tough sailing in many of them because
\nit not only does away with tariffs but it contains other provisions that threaten the way many governments do business including
\nsteering government contracts to favored interests. The 12 countries are Brunei, Chile, New Zealand, Singapore, Australia,
\nCanada, Japan, Vietnam, Malaysia, Mexico, Peru and the United States.<\/p>\n
Chapter 15 of the document, according to an analysis by the office of the United States Special Trade Representative, says that
\n\u201cTPP parties share an interest in accessing each other\u2019s large government procurement markets through transparent, predictable,
\nand non-discriminatory rules.\u201d<\/p>\n
Individual governments must make project specifications public in a timely manner to allow sufficient time for suppliers to
\nobtain tender documents and to submit bids. That gives governments all the way around the Pacific Rim the opportunity to bid on
\neach other\u2019s infrastructure and other government contracts.<\/p>\n
In Indonesia, insider deals that favor powerful state-owned enterprises and crony conglomerates are just one of many obstacles
\nto meeting the pact\u2019s provisions. For that reason among others, the Washington announcement was a closely guarded secret until
\nit was made.<\/p>\n
Virtually since he was elected, Jokowi has been facing serious headwinds from vested interests that have both economic and
\nphilosophical ties to the doctrine of economic nationalism, believing the country should protect favored local industries
\nincluding banking, mining, telecommunications and other sectors.<\/p>\n
Hold the world at bay<\/p>\n
Yudhoyono and his economic advisers were at the forefront of that move, implementing a range of policies that inhibited trade
\nand threatened the economy, including new regulations on horticultural imports, imports of finished goods and exports of mining
\ncommodities. The measures continued under Jokowi, resulting in a sinking rupiah and a slowing economy.<\/p>\n
Jokowi in the past three months has started to assert himself, firing protectionist members of his cabinet and replacing them
\nwith export-oriented ones like free-market disciple Thomas Lembong in the trade minister\u2019s post.<\/p>\n
Jokowi also personally negotiated a deal with the Freeport McMoRan mining company to extend the contract for its gigantic
\nGrasberg mine, the biggest producer of copper in the world and the second biggest producer of gold. Key officials in his own
\ngovernment opposed the deal supposedly on nationalist grounds but also seemingly to seek a piece of the Freeport pie for themselves.<\/p>\n
As president, Jokowi initially showed little interest in joining the TPP. Under Lembong\u2019s urging, he changed course but he will
\nhave to get the country to follow him.<\/p>\n
Last week, in a series of tweets sent after the announcement in Washington, Yudhoyono warned that \u201cIf Indonesia is not ready and
\nis forced to enter the TPP, then our nation will suffer. Such is the \u2018law of globalization.\u2019\u201d He added that Indonesia\u2019s market
\ncould be \u201cflooded with goods and services from other countries, while our exports will fail to be competitive abroad.\u201d<\/p>\n
Competition looms<\/p>\n
Three of the Asean countries that signed up to the TPP \u2013 Malaysia, Singapore and Vietnam \u2013 are export oriented, while Indonesia
\nis not, he said, depending instead on its large domestic market \u2013 a market that would be more open under the TPP. Lembong, for
\nhis part, argues that Indonesia has to compete or lose out to its neighbors especially fast-growing Vietnam. He tells audiences
\nthat protectionism will guarantee mediocrity for the country.<\/p>\n
There have been additional concerns from Indonesia\u2019s cozy business community and political establishment. The Democratic Party,
\nwhich Yudhoyono founded, has warned that the country isn\u2019t ready to face international competition, citing inadequate
\ninfrastructure and other issues. .<\/p>\n
\u201cAre Indonesians and the national economy really ready for this?\u201d asked Edhie Baskoro Yudhoyono, the former president\u2019s
\npolitician son. \u201cHow about our domestic infrastructure? Has the government asked for the public\u2019s opinion, especially those
\ninvolved in the national economy, about the possible impact of the TPP on Indonesia in the future?\u201d<\/p>\n
Fadli Zon, deputy chairman of Gerindra and deputy speaker of the House of Representatives, said the TPP would only benefit
\nIndonesia \u201cif we had competitive businesses.\u201d<\/p>\n
Jokowi\u2019s government has made improving infrastructure and education key priorities but the country needs foreign investment to
\nfund the drive, officials say.<\/p>\n
Economist Lana Soelistianingsih of the University of Indonesia told the Jakarta Globe last week, \u201cCountries with
\nmanufacturing-based exports will be able to perform better in this partnership.\u201d<\/p>\n
Against those concerns, some economists say the pact would open markets in South America and other regions to Indonesia\u2019s
\nexports, which are dominated by coal, palm oil and natural gas.<\/p>",
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"sponsor": "Okusi Associates",
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