Enlarged EU: An additional market for RI

In conjunction with the European Union's most extensive enlargement on May 1, 2004, the Head of the Delegation of the European Commission (EC) -- the executive arm of the European Union (EU) -- to Indonesia, Ambassador Sabato Della Monica talked to The Jakarta Post's journalist Veeramalla Anjaiah recently on various topics related to the enlargement. The following is the full text of the interview:

Question: What is the significance of the EU's enlargement?

Answer: Enlargement is the EU's historic opportunity to unite Europe peacefully after generations of divisions and conflict.

Enlargement will extend the EU's stability and prosperity to a wider group of countries, and consolidate the political and economic transition that has taken place in Central and Eastern Europe since 1989.

Enlargement is thus a continuation of the EU's original purpose of healing Europe's divisions, and creating an ever- closer union of its people.

In fact, the enlargement is a political challenge and its aim is to stabilize Europe politically. The EU wants to create a zone of peace in Europe.

By welcoming new members who respect the EU's political criteria, the Union is restating the fundamental values that underpin it, namely: * democracy, respect of human rights, the protection of minorities, * a market oriented economy, * the willingness and capacity to respect and implement the EU's body of legal and regulatory assets.

Enlargement will create the biggest economic area on the globe of over 450 million citizens. A market of this size can be expected to boost investment and create new jobs, raise the level of prosperity throughout Europe -- both in the new and old member countries. And it will generate fresh economic opportunities for our partners, including Indonesia.

This latest round of enlargement, like previous ones, will add to the Union's strength, cohesion and influence in the world.

How big is current trade and aid between the two, and what will be the impact of enlargement?

The EU is Indonesia's largest export market, excluding oil and gas products, and absorbs around 11 billion euros of Indonesian products a year.

EU exports to Indonesia are slightly less than half that amount, namely 5 billion euros a year.

There is much scope for improvement, both ways, once the Indonesian economy moves into higher economic gear.

Enlargement will enhance the economic opportunities for Asia's exporters, including Indonesia, as on May 1, 2004 the tariff protection in the acceding states will come down from the current average of 9 percent to the EU average of 4 percent.

With regard to aid, the EU, meaning EU member states and the European Commission together, is the largest donor to Indonesia in terms of grant aid.

The European Commission alone provides between 50 and 60 million euros every year to Indonesian governmental and non- governmental or civil society partners.

In recent years, there has been a shift from individual rural development projects to programs aimed at policy support.

The emphasis of our support is on natural-resource management, including forestry management, and good governance. This includes justice sector reform, and the support of economic reform policies. It also covers trade and investment-related technical assistance.

How is enlargement going to affect your activities in Indonesia?

With the new member states aboard, this will certainly help raise the profile in Indonesia. All of the new members states with diplomatic representations here, the Czech Republic, Hungary, Poland and the Slovak Republic, have traditional and longstanding good relations with Indonesia.

The experience of political and economic transition is an experience that Indonesia shares with many of the new member states. This makes for a groundswell of empathy and understanding.

How can the EU raise its profile in Indonesia?

The key to raising the EU profile in Indonesia is partnership: Partnership between businesses, partnership between civil society, including "opinion formers" in the press and media, the world of universities and students, labor unions, human rights activists, judges, police officers -- you name it.

In all of these areas we have much to offer. Our cooperation tools are geared to facilitating such partnerships.

And member states have a role to play by forging the type of "corporate identities" that are the hallmarks of joint undertakings, such as the forthcoming "Europe Week" here in Jakarta in the run-up to "Europe Day" on May 9, 2004.

What difference will an expanded EU make to Indonesia - in other words why should Indonesians care how big the EU is?

You would be aware that Indonesia cultivated close relations with many of the former Soviet block countries that, after due metamorphosis, will shortly be acceding the EU. This dates back to Sukarno's days when Indonesia led the Non-Aligned Movement. It may be more of nostalgic than practical value.

History aside, the enlarged EU will offer additional market opportunities to Indonesia, and Asia at large. The new EU members will be leaders in growth, and invariably they will develop more and more appetite for goods and services so that Indonesians will be eligible, as much as anybody else, to provide on a competitive basis.

But beyond the economic aspect, and coming back to a concept I touched upon earlier, this latest round of enlargement provides another "live" example of how to manage "unity in diversity", in a consensual and productive manner, and free of violence. This remains arguably a challenge for Indonesia's body politic. Perhaps the EU-25, and future EU-27/28 may provide inspiration.