US-Iran Military Escalation and Its Impact on Indonesia's D-8 Chairmanship
The Indonesian public, and indeed the world, is reportedly still unfamiliar with the D-8 organisation. This organisation holds meetings at the level of heads of state or government, in the form of a summit convened by the Developing Eight Organization for Economic Cooperation.
The Developing Eight Organization for Economic Cooperation is also known as Developing-8 or abbreviated as D-8. As its name suggests, D-8 is an association for developing Muslim countries that cooperate in the economic field.
Citing the official D-8 website, the organisation was conceived by the then Prime Minister of Turkey, Necmettin Erbakan, in October 1996. The idea of forming D-8 was presented by Erbakan during a seminar on ‘Cooperation in Development’ in Istanbul. The seminar was attended by representatives from seven countries: Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, and Pakistan. The representatives in attendance envisioned a dedicated forum that would bring together cooperation between countries from Asia to Africa.
A year later, on 15 June 1997, a summit was held in Istanbul which produced the Declaration of Summit of Heads of State/Government. The meeting resulted in the Istanbul Declaration, marking the establishment of D-8.
Amid the current geopolitical and geo-economic dynamics, Indonesia was appointed as chair of this organisation at the D-8 Summit held in Egypt on 17-19 December 2024, for the 2026-2027 period. However, since being appointed chair, Indonesia has announced a postponement of the summit until an unspecified time, citing the unconducive conditions in the Middle East.
So what role does Indonesia play in the D-8 organisation? What is the impact of the US-Iran military escalation on Indonesia’s chairmanship of this organisation? Is this organisation still relevant today?
Indonesia’s role in this organisation is quite significant. As an effort to liberalise and increase trade cooperation, at the 5th D-8 Summit on 13 May 2006 in Bali, Indonesia, the Indonesian Minister of Trade, together with ministers of other D-8 member states, signed an agreement on tariff reductions through the Preferential Trade Agreement among Developing Eight Member States (PTA D-8). The PTA D-8 came into force on 25 August 2011, after four countries ratified the PTA D-8 document, namely: Iran, Malaysia, Nigeria and Turkey. Indonesia ratified the PTA D-8 agreement on 9 September 2011 through Presidential Regulation No. 54/2011.
The tariff reduction modality regulated by the PTA D-8 is not large, less than 10% of the total tariff lines of each country. This tariff reduction is the beginning of trade cooperation among D-8 countries, so the liberalisation implemented is relatively light and not overly ambitious, yet important given that trade barriers to Indonesia’s market access to D-8 member countries remain relatively high.