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Friday, May 17, 2024 | Back issues
Courthouse News Service Courthouse News Service

What Indonesia wants from G20

Leaders from 20 of the world's biggest economies will face each other at the G20 summit in Bali next week, as host country, Indonesia hopes for recognition that will further the nation to become the next global superpower.

NUSA DUA, Indonesia (CN) — Once a Komodo dragon pierces its sharklike teeth through flesh all hope is lost for the receiving end. Should the prey luckily survive and flee after the first snappy move to rip its throat open by a tearing crunch, the 330 pound heavy reptile still knows that its mark will lead to results.

The world’s heaviest lizard calmly follows the escapee for miles as venom spreads inside the prey until it lies dead. Komodo dragons utilize a keen sense of smell to locate the corpse. A feast nears the predator as it looks forward to eating 80% of its own body weight. An economist might call this turnaround a subtle investment resulting in great profit.

When representatives of the world’s 20 biggest economies gather for this year’s G20 summit in Bali next week, Indonesia finds itself amid a typhoon of historical conflicts involving the biggest superpowers of today such as Russia’s invasion of Ukraine, and tensions between the U.S. and China due to Taiwan, while the global economy still wobbles post-Covid-19.

And how to resurrect the global economy post-Covid will be the main agenda for Indonesia, which theme this years G20, “Recover Together, Recover Stronger.” The archipelago estimates that hosting the G20 might inject more than $100 million into the Indonesian economy.

G20 sparks hope that the international community will recognize Indonesia for being a great investment opportunity with its close to 277 million citizens that titles the country as the third biggest democracy in the world, only beaten by India and the U.S.

“There will be various events showcasing Indonesia's development and investment potential. It is hoped that these events will create a multiplier effect for the regional economy, especially in the tourism, accommodation (hospitality), transportation, and creative economy,” Indonesia’s Ministry of Foreign Affairs said about the G20 in Bali.

Dedhy Sulistiawan, an accounting lecturer at the University of Surabaya (UBAYA) says that Indonesian President Joko Widodo, also known as Jokowi, will set agendas at the G20 summit that will promote both himself and his country.

“For Jokowi, this summit promotes global recognition of his leadership and impact. Indonesia also receives many benefits from this summit,” he said and continues, “the summit will promote Indonesia's tourism, especially for destinations such as Bali and Lombok. Secondly, this summit stimulates economic growth and will open new opportunities to improve capital inflow for Indonesian businesses and services.”

When Covid-19 spread globally, Bali, the most preferred travel destination for foreigners in Indonesia, took a massive hit as tourism accounts for around 60% of the island’s gross regional product. But the Indonesian economy would soon prove resilient.

Domestic tourists, specifically from the capital of Jakarta and the country’s second-largest city Surabaya, would soon ensure the survival of many local businesses on the island of the gods, as Bali is known as.

Not just in Bali, but throughout Indonesia, small and middle-sized local businesses would survive by relying on their local economy instead of overseas revenue. Surprisingly, the government in August 2022 announced that the Indonesian economy had returned to pre-Covid levels based on the gross domestic product.

"The Indonesian economy has reached a pre-Covid level in terms of the GDP, both in 2021 and 2022. Meanwhile, in terms of the state budget deficit, it is relatively moderate," said Sri Mulyani Indrawati, Indonesian Minister of Finance.

But the Southeast Asian country has only taken its first bite in terms of developing Indonesia’s economic development post-Covid. Attracting foreign investments is now a hot topic among the archipelago’s political elite, which follows a regional trend sparked by China’s enormous economic growth since the 90s, Tobias Axelsson, senior lecturer at economic development of the Global South at Lund University told Courthouse News.

“If we look at the region at large, we can see that over the past few decades it has become increasingly important to attract foreign direct investments,” he said. “What we're seeing in Southeast Asia is a greater integration within the region. There's quite a lot of capital flowing from China, but also from other parts of Asia.”

Asia has become mature to such an extent that it can carry itself, in contrast to the past when Western countries played a more significant role in the continent.

In Indonesia’s case, it wants to shift its role of being a purely raw product exporter. Palm oil, gas and metallics are all natural resources that Indonesia has supplied the world with for decades. That might change now, as skilled labor can elevate the archipelago into a technology-based exporter — especially in the Greentech industry.

“I think that is something Indonesia is interested in going into. Other sectors of the economy such as technological upgrades,” said Axelsson. “To actually make technology part of their export and not just maintain a role as resource producer.”

Reversed regulations on investments laws make it much easier for foreign investors to conduct business in Indonesia today, said Indrawati based on his own observations. This will make Indonesia more flexible in accepting partners that follow the county’s agenda should other nations only be interested in raw materials alone.

Right now, China is second to Singapore on the list of Indonesia’s biggest investors. Last month, President Jokowi said that this will change, as he predicts that China will claim the top spot within two years.

“China and Indonesia are two big countries and the potential for cooperation are very large. I am optimistic that economic cooperation with China will improve, increase, and get bigger,” said Jokowi according to Indonesian newswire Antara, quoted by CNN Indonesia last month.

According to the president, both Asian giants have a mutual understanding of what each counterpart wants from economic agreements.

Worries in the past said that China’s growth could potentially swallow the entire continent, leaving little room for other countries to evolve their own economic development to compete internally.

“But they're obviously still growing,” said Axelsson refereeing to Southeast Asian countries.

“I predict that China will become one of the biggest partners for developing the Indonesian economy,” said Indrawati.

Both scholars say that corruption in Indonesian politics still hinders the country to reach its full potential. But initiatives against it over the years have helped counter this culture, even though there is still much work to do for the KPK, Indonesia's Corruption Eradication Commission.

Despite this, data suggests that Indonesia’s economy has gone through a steady growth since the former Indonesian dictator and president Suharto was thrown out of office in 1998, with only the period under the global financial crisis starting in 2008 as an outlier.

Conflicts involving the West may overshadow the Southeast Asian nation’s agendas for the G20 in Bali. But Indonesia will surely wait patiently camouflaged in the background, knowing that even if its prey survives the first bite, its target is still sealed with Indonesia’s future.

No official source has marked the Komodo dragon as Indonesia’s national animal, despite the giant lizard frequently being referred to as such both online and among locals. Wild Komodo dragons can only be found in Indonesia, which has taken precautions to protect the reptile from extinction.

Follow @LasseSrensen13
Categories / Economy, Government, International

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