Revisiting Indonesia-United States relations

Revisiting Indonesia-United States relations

By Tony Agus Ardie, President of KIKAS*

The past few months have seen a profusion of developments which could substantially influence the state of relationships between Indonesia and the United States. Some were originated at the Indonesian side: the so- called 'sweeping' of American hotel guests in Solo, anti-U.S demonstrations, call for boycott of American branded products, the Bali bombing, abolishment of free visa facility for U.S. citizens. Some others came from the U.S. side: warnings for American citizens not to visit Indonesia, new limitations for imports of Indonesian products, the war in Iraq. Directly or indirectly, most have the potentials to constrain or even worsen relations. Regardless of the developments, however, the fundamentals of Indonesia-U.S. relations have remained largely unchanged. Indonesia, the world's fourth most populous country with more than 210 million people, is geopolitically pivotal to peace and stability in Southeast Asia. As the nation with the largest Moslem population, its position has become even more crucial in the present global constellation. It has the potential either to become a bridge between the U.S. and other Islamic peoples, or an obstruction towards better relations. Indonesia is also richly endowed with a vast variety of natural resources for American industries. The United States, as the world's largest economy, the biggest source of technology and the greatest influence on the global financial market, the International Monetary Fund (IMF) and the World Bank, plays an important role in supporting Indonesia's efforts to solve its economic crisis. As the most powerful democracy it could also assist Indonesia in coping with the painful process of transition from an authoritarian, centralized government into a more democratic and decentralized state. These fundamentals are strong reasons for both sides to work for closer relations. However, this is not reflected in the changing reality. The gap is widening-not closing-for various reasons, e.g. domestic politics, differences in national interests and priorities. Actually, the very same reasons are also arguments for striving toward good, sustainable relations. A stronger, more stable Indonesia-in political as well as economic terms-would be more beneficial for U.S. interests in many aspects, including in implementing its war on terrorism. A more basic reason for this gap is information disparity: the lack of knowledge, thus of understanding and empathy, on each side about the other. Basic knowledge about Indonesia is negligible in the U.S. Most Americans have very little idea about Indonesia, geographically and otherwise. Bali is still more known than the whole country. American text and reference books still put the wrong date about Indonesia's independence day and disregard its revolution. Yet an incident in any small Indonesian town would be interpreted as if the whole country is unsafe. Distortion could bring dire consequences when it comes to complex analyses of the country. Complications in the reforms undertaken by Indonesia since 1998 are to be expected considering its enormous dimensions and speed. But it often prompts many U.S. politicians and analysts to be fixated with the daily turmoil of events, raucous demonstrations, corruption cases or security problems, neglecting substantial progress. This often results in overly pessimistic assessment of Indonesia's future, overlooking the medium and long term perspectives after all this agonizing learning process. True, structural impediments such as the lack of trust in the judicial system, excesses in the initial process of transferring power to district-level administrations, virtually bankrupt big corporations and low investor confidence have been a turnoff to new investment. However, these problems are being tackled with great assistance from the World Bank, the IMF and the international creditor consortium, the Consultative Group on Indonesia (CGI), of which the United States has been a loyal donor member since 1967.

Progress has been made, as can be noted from the strengthening macroeconomic and political stability.

The most positive development is that Indonesian national resilience has passed the toughest test over the past five years of political turbulence and economic debacle. Such progress, however, is seldom reported by the media and hardly known in the U.S.

To be fair, similar distortions concerning the U.S. also occur in Indonesia. Despite admiration for American products, popular culture and lifestyles, Indonesian public understanding of the U.S. is superficial at best. Their image is filled with negative stereotypes, prejudices and skepticism. The U.S. is in variably described by the country's media as an arrogant power whose actions bring far-reaching consequences unfair to Indonesia. When the U.S. issues travel notices to dissuade Americans from coming to Indonesia, it is also discouraging visitors from other lands and thus affecting the tourism industry extensively. U.S. trade pressure to import and consume American products is contrasted to its tight control of Indonesian imports. New rules, such as anti- bio-terrorism inspection, add burdens to Indonesian exporters at US$250 per container box. The widespread image is its own self-interest, shown in the decline in purchase contracts for Indonesian's manufactured goods, the withdrawal of investments and the relocation of activities to other countries, while simultaneously expecting Indonesian support for U.S. interests. These actions are neither unusual nor unreasonable in international practice of doing business. Nevertheless, they do not contribute to the accomplishment of understanding and trust with the wider population. It does not matter that such sanctions may in fact be directed at big economic players. But the ultimate impact will be felt by the grassroots who may arrive at simplified conclusions, e.g. that U.S. actions are the cause of their tough lot, declining job opportunities and increasing the already high rate of unemployment. In the public perception, such acts show a lack of compassion for the already tough lot of the general public. As the majority is composed of the same Moslems that the U.S. supposedly like to befriend, this is also viewed as a lack of sensitivity and comprehension regarding Indonesia's Moslems' social situation. Clearly, relationship between any two countries can only be improved if it is based on sufficient knowledge and mutually favorable attitudes. These include adequate regard and respect, high credibility, and trust between each other. With current advancing distrust, communications efforts should be shifted to nonverbal, practical actions-which could speak much louder than words and statement, as the saying goes. Such action should begin in an area of mutual concerns to both peoples. This is employment opportunity. Indonesia's unemployment and underemployment today are estimated at a total of 40 million, and the number keeps rising by 2.5 million annually, particularly in the lower classes in the Moslem community. Notwithstanding the contributions of American giants in Indonesia's development, the action should change to a broader and bigger American role in empowering Indonesian small and medium-size enterprises (SMEs) to enter the global market, including the U.S. After all, the American small business development scheme under the Small Business Act is one of the best-managed programs in promoting business incubation. The choice of SMEs is even more appropriate as it is the business sector that is closest to the general community and has accomplished a lot to overcome unemployment since the crisis. When many big national companies collapsed, more than 95 percent of the SMEs were able to survive. Of this figure, 31 percent succeeded in restructuring their organizations while 64 percent others expanded operations and passed the crisis with flying colors, thus capable of providing jobs for 64.3 million people. The U.S. model has been tested by pioneering SME empowerment efforts in Yogyakarta, involving the community's three pillars - the local administration, committed private entrepreneurs and Gadjah Mada University - which are now attracting support of the Vienna-based United Nations Industrial Development Organization. With its long experience in community-based development projects in various provinces in Indonesia, the United States Agency for International Development could play a role in SME empowerment as well. Such action programs will extend and upgrade the present relations between the United States and Indonesia into a new, people-to-people based diplomacy, which facilitates and improves the official relationship that in the past was hampered by people vs. people misunderstanding and prejudice.

*KIKAS is the U.S. Committee of the Indonesian Chamber of Commerce and Industry (Kadin).

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