PM Koizumi's visit a delicate diplomatic test

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.