More questions than answers after Bogor

By Meidyatama Suryodiningrat

JAKARTA (JP): Though economic leaders of the Asia Pacific Economic Cooperation (APEC) forum were all smiles as President Soeharto triumphantly announced the results of the "Bogor Declaration," many watching soon began to ponder on the consequences of what had been pronounced.

APEC economic leaders agreed that comprehensive trade liberalization would be achieved by no later than 2020, with developed countries pursuing a faster 2010 track.

With post-APEC fever dying down, member countries now have to come to grips with the economic realism of what was mainly a political declaration.

Reasserting the rhetoric of free and open trade is by no means a boastful conquest and setting a deadline without a clear blueprint merely creates the potential for future melee.

Indeed, encouraged by Indonesia, the leaders have produced a document providing a vague destination for the future but failing to mention the route or vehicle by which it should be approached.

When queried on how exactly this vision would be achieved, Soeharto said it would be "left to the ministers concerned."

United States President Bill Clinton the next day expressed vagueness when he said that the implementation would begin as soon as a blueprint can be formulated and agreed upon.

In other words what the Bogor Declaration gives is a destination with no road map on how to get there.

Apart from the ambiguity of the process, the evolution of APEC has unfolded dubiety and rigid differences which have become increasingly difficult to iron out.

First, APEC clings to the fear of institutionalization and fails to gallantly acknowledge this already established fact as truth.

In the beginning, members of the Association of South East Asian Nations (ASEAN) conditioned that the forum must remain a "loose consultative forum" and not an institution.

However, in the past year we have seen a gradual push towards further institutionalization of the forum.

As Indonesian Minister for Foreign Affairs Ali Alatas recently admitted, the process was "unavoidable" and that some institutionalization had inevitably occurred.

Tony Miller, head of the Hong Kong delegation during the meetings here last week, pointed out that APEC had institutionalized much faster than other organizations which had proclaimed themselves institutions.

If APEC cannot judge itself with sincerity, how does it expect to tackle a much larger and complex issue such as free trade?

Recognition of APEC's status would do away with arguments on the question of "institutionalization" which have detracted officials from spending valuable energy on the larger task of devising a tangible policy of trade liberalization.

During the second Senior Officials Meeting in Bali last May, delegates consumed many hours quelling Malaysia's reluctance to transform the ad-hoc group on Economic Trends and Issues into an Economic Committee.

Malaysia based its objections on the grounds that the committee would signify increased institutionalization.

It took two Senior Officials Meetings before this matter was settled at the third meeting in Yogyakarta three months later.

Senior political scientist at the Indonesian Institute of Sciences Dewi Fortuna Anwar pointed out that every organization requires some institutionalization to function optimally. "The question is, how strict it will be," she said.

Second, though the declaration has been publicly proclaimed as consensus based, statements made following the Bogor meeting have left many wondering.

No sooner had the declaration been announced than Malaysia's Prime Minister Mahathir Mohamad took pot-shots, pointing to the document as non-binding, carrying no compulsory obligation to the members.

"The targets dates of 2020 and 2010 are indicative dates and non-binding on member states," read a Malaysian statement released just hours after Soeharto's speech.

Even Japan's Prime Minister Tomiichi Murayama acknowledged there were those during the meeting who held reservations about the declaration.

What kind of message does this send when leaders, just a few hours after their proclamation to the world, begin poking holes at their own decision.

Malaysia's emphasis on noting the target dates as merely "indicative" leads to another question on the tenability of the commitment.

The Bogor declaration itself states an extremely loose condition for members to implement the arrangement -- "those that are not ready to participate may join at a later date."

Of course there are arguments that the essence of the declaration's flexibility complies to APEC's loose and consultative nature.

If that is so then the more fundamental question should be how readily committed are all the 18 member economies beyond public rhetoric?

Based on their economic, capital and technological supremacy, the main beneficiaries of trade liberalization will be the developed countries such as the U.S.

A day after the Bogor summit President Clinton pointed out that the U.S. will gain much from the declaration since the U.S. "already has the most open markets on earth."

By opening up other markets, American products will be more competitive, he argued.

Jakarta has also justified its approach by giving statistics from the Ministry of Trade showing that Indonesia's market shares in developed countries will increase as much as seven percent.

However, Bob Hadiwinata, an international relations lecturer at Parahyangan University in Bandung, said that for developing nations, free trade principles are more often not manifested in their economic policies.

He said the application of free trade tends to occur only in the already controlled sectors of the international market.

Closer to home, Dewi Fortuna questioned Indonesia's readiness to meet such a bold idea as free trade. "Domestically we don't have any free trade," she said.

Quite candidly, Bob Hadiwinata recently wrote that despite Jakarta's ratification of the new General Agreement on Tariffs and Trade principles, Indonesian economists have stressed the on- going need for protection of the service sectors along with small and medium industries.

Hadi Soesastro from the Pacific Economic Cooperation Council, who holds observer status in APEC, simply asks, "is it realistic to expect that tariffs and non-tariff barriers be totally eliminated?"

Moving away from discussions on whether member economies can truly apply the economic principles of free trade, APEC officials and delegates must brace themselves for the unenviable task of producing a concrete plan for trade liberalization.

Even without the problems of the difficulties stated above, these deliberations will be highly complicated and laden with varying national interests that precede the ideals of free trade.

If nothing else, the near impasse on the adoption of an investment code during the recent Senior Officials Meeting is already an omen. Such was the obvious frustration of the "investment code" ordeal, that even the consensus based decision making mechanism of APEC fell into suspect.

Though she is not of the same view, Mari Pangestu, also with Pacific Economic Cooperation Council, said a number of countries during the meeting expressed that the forum would be more efficient if the consensus was dropped.

Thai's Deputy Prime Minister Supachai Panitchpakdi went so far as to say, "I don't think we can go by a consensus basis in that every one of the 18 countries would have to agree on particular dates or work programs."

With all these fundamental questions hovering and a murky, rugged path ahead, it will be a daunting prospect for APEC to conclude a blueprint before the next leaders meeting in Osaka.

For Indonesia, whatever fate lies ahead next year, it has made history in hammering-out the Bogor Declaration.

We can only hope that the declaration, with all its ambiguity, has not dug a hole so deep for APEC that it cannot climb out.

Prior to last week's meetings Hadi Soesastro said that ministers and leaders should perhaps leave the flamboyant talks on timetables for future deliberations and tackle the basic problem of achieving free and open trade first. "Certainly they are well advised to do so," he said, despite being ignored.

Window A: The evolution of APEC has unfolded dubiety and rigid differences which have become increasingly difficult to iron out.

Window B: For Indonesia, whatever fate lies ahead next year it has etched history in hammering-out the Bogor Declaration.