Spain accelerates Look-East program

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.