PM Koizumi's visit a delicate diplomatic test

Kornelius Purba, Staff Writer, The Jakarta Post, Jakarta

Embarrassment. Then Japanese prime minister Kakuei Tanaka experienced that pain in Jakarta 28 years ago when he was received by former president Soeharto at the palace. And by coincidence, in turn, when Prime Minister Junichiro Koizumi arrives in Jakarta on Saturday for a two-day visit, his presence may also cause diplomatic embarrassment for President Megawati Soekarnoputri.

When Tanaka and his young daughter Makiko visited Jakarta on Jan. 15, 1974 as part of his ASEAN tour, he was greeted by the worst anti-Japanese riots ever seen in Indonesia.

There were various explanations of the motives for the Malari (Jan. 15 disaster) rampage, but anger over Japan's economic dominance was among the triggers. Japan quickly learned from the bitter experience and continued its aggressive economic expansion in the region with a lower profile and a much better understanding of the region, including Indonesia.

Japanese companies are the biggest investors and most important trading partners both here and in other parts of the region. The country is Indonesia's largest creditor, both in terms of bilateral loans and funds channeled through multilateral organizations, including the Asian Development Bank (ADB), in which Japan has the biggest capital share.

A great deal has changed since 1974. When Prime Minister Junichiro Koizumi arrives in Jakarta on Saturday as part of his tour of the five founding members of the Association of Southeast Asian Nations (ASEAN), he will do so with the help of Tanaka's daughter Makiko, now the Japanese foreign minister and Koizumi's key advisor for the trip.

President Megawati will act as host to Koizumi, after she was his guest in Tokyo last September. Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti, who was jailed for 27 months for his alleged involvement in the 1974 riots, will act as Megawati's chief advisor during her summit with Koizumi on Saturday at the Merdeka Palace.

Koizumi, who came to power in April last year, was originally scheduled to visit ASEAN, including Indonesia, just a few days before Megawati's arrival in Tokyo on Sept. 26. Many regarded his planned visit as a consolation tour after he had received sharp criticism from South Korea, North Korea and China for visiting the Yasukuni war shrine in Tokyo in August.

Koizumi postponed the tour following the Sept. 11 terrorist attacks on the U.S. Megawati went ahead with her schedule. Both of them had separate talks with U.S. President George W. Bush at the White House before their Tokyo summit.

There is a tradition in Indonesia that an honorable guest is expected to bring pleasant oleh-oleh (gift) for the host. As a guest, Megawati appeased Japan by fulfilling her host's demands to resolve four financially troubled megaprojects involving the Japanese government and large Japanese companies.

The president agreed to settle the issue of debt restructuring between the controversial petrochemical plant PT Chandra Asri and its Japanese partner Marubeni Corp. She also promised to help resolve problems being faced by PT Trans-Pacific Petrochemical Indotama (TPPI) in the construction of a US$2.3 billion petrochemical plant in Tuban, East Java. Japanese business groups Nissho Iwai Corp. and Itochu Corp. are involved in the project.

The other two projects are the Tanjung B power plant in Central Java, which involves Sumitomo Corp., and PT Paiton Energy, a joint venture power plant which includes an Indonesian private firm and Mitsui Corp.

In turn, Koizumi pledged to continue Japan's role as Indonesia's largest creditor. He also gave a commitment to continue to assist Indonesia in its debt rescheduling negotiations with the Paris Club.

Japanese prime ministers have a tradition of announcing their key policies toward ASEAN shortly after coming to power, as happened with the announcement of Takeo Fukuda's famous doctrine.

Koizumi is also scheduled to convey his major policy plans for the region during his seven-day visit, starting on Wednesday, to the Philippines, Malaysia, Thailand, Indonesia and Singapore as his oleh-oleh for the region.

The Japanese press has reported that the prime minister plans to propose a sweeping economic cooperation accord, including a free trade agreement (FTA) within five to 15 years between Japan and ASEAN. ASEAN itself launched the ASEAN Free Trade Area (AFTA) on Jan. 1 this year.

Koizumi's initiative is clearly designed to counter the FTA agreed between ASEAN and China in November following China's admission to the World Trade Organization (WTO).

Japan, the world's second biggest economy after the United States, is currently facing the prospect of losing its role as the economic engine of the region and East Asia, and of seeing its global role being snatched away by China.

Koizumi's initiative is laudable although it came rather late, as did his introductory visits to the region, which he embarked upon eight months after his election as prime minister. His presence at the informal summit of ASEAN Plus Three (Japan, China, South Korea) in Brunei last November was more of a multilateral visit.

According to reports, Koizumi plans to announce his FTA proposal during the last part of his tour in Singapore. Koizumi is slated to deliver his historic speech at the prestigious Institute of Southeast Asian Studies (ISEAS) in Singapore just after his summit with Megawati.

There is of course a good reason for choosing Singapore as the place to make his announcement: it was the first country to reach a free trade agreement with Japan. The agreement was concluded in October. Singapore had previously reached a similar accord with the U.S.

In 1997 the economic crisis hit several Asian countries, including ASEAN members like Thailand, Indonesia, the Philippines and Malaysia. Indonesia has been unable to free itself from economic upheaval and has lost three presidents since the crisis.

Indonesia is seen by many as a sick, if not a dying, giant. It has lost its leadership in the region. ASEAN members are busy with their own homework and the absence of leadership from Indonesia, as its largest member, is seriously affecting ASEAN's effectiveness.

However, despite its current condition, Indonesia's position as the world's largest Muslim nation and the fourth most populous country in the world should not be underestimated. The Sept. 11 terrorist attacks on the U.S. reminded many that Indonesia's role in the Islamic world is undeniably strategic.

Japan is a sovereign country. As its leader, Koizumi and his advisors have their own priorities and they have the right to choose Singapore as the place to deliver such a strategic speech. Singapore is ASEAN's most advanced country, and she deserves the honor.

Koizumi's choice of Singapore might only be symbolic. But diplomatically the option may become an embarrassment for Megawati's administration.

Japan itself is facing a decade-long economic crisis. Koizumi's election as prime minister has brought a new optimism to Japanese voters, who hope that their country will eventually be able to resolve the crisis and maintain its role as the world's second largest economic power.

Indonesia, however, must also learn from Koizumi. As long as Indonesia remains weak, its presence can be ignored -- a bitter, but maybe also a necessary, pill for Megawati to swallow.