Enlarged EU: An additional market for RI

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.