Spain accelerates Look-East program

The Jakarta Post, Jakarta

The Spanish government, which currently holds the presidency of the European Union, has stepped up its Look-East policy since 2000 under a four-year Asia Pacific Framework Plan devised to broaden and deepen its overall relations with what it sees as a high-growth region. German Begarano, director general for international economic relations at the Spanish foreign ministry, and Damasa de Lario, the Spanish ambassador to Indonesia, shared their views about the program and its implementation in Indonesia in separate interviews with The Jakarta Post.

Question: Spain had traditionally developed intensive relations only with Europe, Latin America and the Mediterranean. What is the thought process that led to this new spirited devotion to Asia.

Answer: The policy reorientation was prompted by the realization that Spain's marginal presence in the region, except in the Philippines, goes against the political, economic and social interests of modern Spain, a thriving, technologically advanced country, one of the most dynamic members of the European Union. Despite its short crisis in the late 1990s, Asia undoubtedly remains one of the most dynamic regions, home to the so-called economic tigers, major multinationals and foreign investors. Since Spain has increasingly become a supplier of both financial, development assistance capital and technology, it needs to capitalize on that position to enhance its political, economic and social engagement in the region.

Q: What are the objectives of the Plan?

A: The objectives in the political arena are deepening bilateral and multilateral political relations through bilateral programs and more intensive involvement in regional organizations such as ASEAN and its various forums, actively contributing to peace- keeping and stability and promoting greater respect for and protection of human rights in Asia.

In the economic field, Spain is implementing concerted efforts to expand trade, develop investment by promoting its manufacturing capability and enlightening the Spanish business community of the business and trade opportunities in Asia and increasing its overseas development assistance.

Certainly, there are numerous other programs in education and culture aimed at improving mutual understanding. Most important too are our internal efforts to promote among the Spanish people a higher sense of understanding on the relevance of Asia to our national interests. Without active support of the people, notably our regional governments, business community, mass media, social, cultural and educational organizations, the government-sponsored plan will never achieve its goals.

Q: Given the vastness and diversity of the Asian region, how is Spain implementing the Asian dimension of the plan within its foreign policy?

A: We realize that increasing our presence in Asia requires specific actions and programs to ensure a more in-depth knowledge of each sub-region and individual countries in the region. In terms of policy approach, the plan therefore divides the Asian countries into five different groups: China, Japan and the two Koreas, Indian subcontinent, ASEAN and Australia together with New Zealand and the Pacific island states.

Q: Could you cite specific programs in the ASEAN group of countries?

A: There are too many programs designed specifically to the ASEAN group and to its individual members to fit this space. Just to cite some of them, we have stepped up our consultations with the ambassadors from ASEAN countries in Madrid and increased the monitoring and participation in the ASEAN and its various forums. An ASEAN House is being prepared in Barcelona to operate as the center for disseminating information on ASEAN countries and promoting their products.

Q: What programs is Spain undertaking in Indonesia as part of the plan?

A: Like in other Asian countries, the engagement of Spanish officials and business organizations in Indonesia has so far been very small. Perhaps, the most popular flag of our business cooperation in the country has only been the joint venture between CASA and state-owned PT Dirgantara Indonesia in Bandung to manufacture light passenger aircraft bearing the CN-235 series number but this company is now facing severe financial problems.

However, the Spanish government has stepped up its involvement in Indonesia's development through its participation in the Consultative Group on Indonesia (CGI) creditor consortium.

In 2001, for example, the Spanish government disbursed US$39 million in soft loans for four development projects in health services for the urban community and the National Police, the computerization of land-title registration and certification and vocational education. In the same year, the government pledged $71 million in soft loans for seven other projects in various sectors.

For fiscal year 2002, the Spanish and Indonesian governments agreed on aid disbursements amounting to $57 million for development projects in health, basic infrastructure, education and good governance.

Spain has built up good expertise and reliable software technology in developing good governance practices through computerized information systems at state institutions and has fulfilled Indonesia's requests to develop such systems at the immigration and Attorney General's offices throughout the country. The projects have been tendered but there are some problems that have to be resolved before the projects can run at full speed.

Q: Since the Spanish soft loans are tied to the procurement of Spanish products, what is termed as development aid seems also to be designed to help Spanish companies enter the Indonesian market?

A: We should admit that Spanish development aid also is designed partly to introduce the expertise, technology and competitive edge of Spanish companies in Indonesia. There is nothing wrong with that, soft loans from other Indonesian donors within the CGI are also tied. As the loans offer concessional terms such as maturities of more than 30 years, a grace period of 10 years, and interest rates below 3 percent that are not available in the financial market, they also impose several strings.

Most important, though, is that development projects to be financed with such soft loans must be selected by Indonesia's National Development Planning Agency. We don't offer things that Indonesia does not need. In fact, we are always in consultation with the agency regarding any projects to be implemented.

We hope that as more Spanish companies build projects in Indonesia, they will eventually be interested in investing in the country and expanding two-way trade which is now still way in favor of Indonesia. Spanish imports averaged almost $1 billion a year between 1997 and 2000 consisting mainly of minerals such as copper concentrates, coals and precious metals, canvas shoes and furniture. But its exports have so far been languishing at between $200 million to $350 million per year.