Future prospects of Japan-Indonesia relations
Future prospects of Japan-Indonesia relations
By Takao Kawakami, Ambassador of Japan
A special article on the occasion of the birthday of His Majesty the Emperor of Japan.
1999 was a historic year for Indonesia. The domestic process of a general election and the selection of a new President and Vice President was successfully implemented. The direct ballot voting in East Timor took place, and the separation of that region was formally recognized in the People's Consultative Assembly. We are glad to note the smooth establishment of the new government.
Japan welcomes these political developments, and, as a neighbor and friend of Indonesia, Japan will not spare its efforts to support the reform efforts of Indonesia. Japan expects its friendship with Indonesia to develop further in the coming year. I would at this time like to recapitulate the recent key events in Japan-Indonesia relations.
President Abdurrahman Wahid visited Japan from the 15th to the 16th of November, and held a meeting with Prime Minister Obuchi on the 16th of November. Just ten days later, on the 26th and the 27th of the same month, Prime Minister Obuchi visited Indonesia. The two dignitaries again held meetings. The visit by Prime Minister Obuchi was the first by a foreign top-level government leader since the establishment of the new government in Indonesia. During the talks, Japan expressed its political will to assist Indonesia in its reform efforts, and made concrete proposals to that end. This was greeted by whole hearted agreement from the Indonesian side. It is striking that in this short period of time both leaders have visited one another's countries. Such mutual visits certainly have contributed immensely toward constructing a strong and personal relationship between the two leaders and further enhancing the friendly and cooperative relationship between Japan and Indonesia that has been matured over the years.
The restored confidence of the international community has brought renewed stability to the rupiah and there is a sense that the Indonesian economy is coming out from its worst times. Japanese businesses have long been operating in Indonesia, mainly in the manufacturing sector. Even through the most difficult period of economic crisis, Japanese companies maintained their overall presence in Indonesia. At present over one thousand five hundred Japanese enterprises are operating in Indonesia, and roughly twelve thousand Japanese people are living here. It is through their economic activities that close relationship between both countries is further strengthened. Japan being the top investor in Indonesia, the cumulative amount of Japanese investment in Indonesia has so far totaled 44 billion U.S. dollars. It is expected that with Indonesia's recovery, the amount of Japanese investment will increase further. Japan will extend her hand in cooperation, and help the Indonesian economy to attain a level of international competitiveness.
To help Asian countries cope with the difficulties brought on by the unprecedented economic crisis, since 1997 Japan has been implementing an assistance scheme totaling 80 billion U.S. dollars. This assistance scheme, the largest ever, focuses on the following four points: 1) Revitalizing economics; 2) Economic structural reform and human resources development; 3) The development of a social safety net as relief measures for the socially vulnerables; and 4) Stabilizing currencies.
At present 68 billion dollars have been implemented for such purposes. It is comprised of an international assistance package coordinated through the IMF (19 billion dollars), medium-long term as well as short-term financial support (the amount of 30 billion dollars) as part of the New Miyazawa Initiative, and the establishment of an Asian Currency Crisis Support Facility within the Asian Development Bank (about 3 billion dollars).
Furthermore, assistance such as full implementation of the New Miyazawa Initiative as well as the Special Yen Loan for building up infrastructure which will contribute to economic structural reforms expected to go ahead.
In Indonesia, since last year, Japan has increased assistance for programs that focus on socially vulnerable and unemployed people, agriculture, small and medium sized enterprises, and the trade finance sector generally. In order to aid the socially vulnerables, wide-ranging cooperation has been established not only on a government-to-government level, but also through direct assistance to NGOs through the small-scale grant assistance for grassroots projects. This kind of assistance covers, for example, the distribution of rice to the poor through the Nahdatul Ulama, humanitarian aid to Acehnese refugees under the auspices of the Indonesian Red Cross.
To cope with a problem of unemployment, Japan has also implemented quickly-disbursable Yen Loans for various sectors of the economy such as farming, transportation and education.
Moreover, during the Indonesian general election in June, Japan contributed to the fair implementation of the election by dispatching experts to help with the implementation of the election and by providing equipment and funds.
Japan has been providing economic assistance through various programs including the Yen Loan Program, as well as grant and technical assistance. These programs have placed importance on 1) securing of fairness and transparency; 2) human resources development and education; 3) environmental protection; 4) reorganization of the industrial structure; and 5) consolidation of an industrial base (economic infrastructure).
In cumulative terms, Indonesia is the largest recipient of Japanese economic assistance. This reflects the great importance Japan places on its relations with Indonesia. Through such efforts as dialogue with the Indonesian government, Japan will continue to strive to provide a cooperative hand to Indonesia in an appropriate manner.
Japan hopes to develop a wide-ranging relationship with Indonesia as well as the ASEAN countries. In September of this year, the "Mission for Revitalization of Asian Economy", headed by Mr. Hiroshi Okuda, the Chairman of the Japanese Federation of Employees' Association (Nikkeiren), was dispatched to Jakarta. A proposal was put forth that included the establishment of better ties with Japan's Asian neighbors. Prime Minister Obuchi has proclaimed the "Obuchi Plan for Enhancing Human Resources Development and Human Resources Exchanges in East Asia" at the ASEAN plus Japan, China, and Korea summit meeting held on the 28th of November. The proposed 10 point comprehensive program will enhance human resources development, and people-to-people exchanges, in order to build up a human network in Asia. The program consists of three pillars as follows: (a) Enhancing the development of highly specialized human resources in the areas of finance and higher education, (b) Intensifying human resources exchange at civil level, and (c) Strengthening the assistance for student exchanges, which would be an investment for future relations with East Asia and Japan's intellectual contribution to the international community. The program encourages the development of people-to-people exchange on a grassroots level through the building of an ASEAN-Japan NGO Network. It would include increased acceptance of foreign students from East Asia to Japan through Japanese government scholarships.
Japan has been contributing to the peaceful solution of the East Timor issue. Japan considered a strong Asian participation in the multinational force in East Timor to be important, and hence pledged around 100 million dollars to the UN Trust Fund in order to facilitate the participation of other Asian development nations in this force. Moreover, in order to aid East Timorese refugees in West Timor, the Government of Japan has disbursed two million dollars as a first step in assistance to international humanitarian organizations. Further assistance is now being considered. In addition to financial aid, since the end of November, Japan is providing aircrafts of the Air Self Defense Forces for the purpose of transporting UNCHR relief materials between Surabaya and Kupang.
I have described some points regarding Japan-Indonesia cooperation at the government level. But this constitutes only part of our bilateral relationship. Thanks to the rapid development of information technology and globalization, it has become much easier to initiate international person-to-person contact at the grassroots level. I am convinced that it is this sort of people-to-people exchange, together with intensified cultural contacts and exchanges between the two peoples, that brings about deep mutual understanding, and it is expected that such exchanges will contribute to the productive and mutually- supportive relationship between our two countries in the future.