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STUDENT ID:
20180510418
2019
The Challenges of Indonesia Foreign Policy Towards Asean Economic
Community in SBY Presidency
Abstract
SBY was the president who won the first and second general elections, namely the period
of 2004-2009 and 2009-2014. In running his government, he implemented his foreign
policy program. One such program forms the ASEAN community, the ASEAN Economic
Community (AEC) which will be implemented in 2015. Where this program is a stepping
stone in the regional economic integration agenda in ASEAN. This program was also
created because it saw Indonesia's opportunities for it. The purpose of this paper is to find
out and analyze the opportunities, challenges and efforts of Indonesia's foreign policy
towards the Asean Economic Community during SBY's administration.
A. INTRODUCTION
Southeast Asia is the most dynamic region compared to another Asia in the world
Southeast Asia is the most dynamic region compared to other Asia in the world. The
number of differences between one another and in terms of different ideologies, politics,
economics, and defense. Many conflicts are well managed by Southeast Asia, as a region
that was once fragmented due to the cold war between the two blocs. The establishment of
ASEAN in 1967 proves that the Southeast Asian regions are very good at managing
conflicts. However, at that time several regions or countries in Southeast Asia chose to join
the countries in the two blocks by entering into cooperation and agreements (Widiatmaja,
2019). It aims to achieve the interests of each country. One of these interests can be
achieved by carrying out the foreign policy of each country. Foreign policy is a policy
carried out by a country in its dealings with other countries whose aim is to achieve
national goals. Foreign policy can be an instrument used by each country to achieve
national interests carried out outside the country's borders. In addition, foreign policy is
also carried out as a national development plan.
Foreign policy is a reflection of domestic conditions and at the same time influenced
by dynamic changes of the regional and international environment. Indonesia itself uses an
impartial foreign policy between the two blocs, the "free-active" policy in achieving its
interests in other countries. The formulation of this idea was first conceived by the first
vice president, Muhammad Hatta. "Free" means that Indonesia does not impartiality with
anyone and can determine its own way without the intervention of the western countries.
While being "active" means that Indonesia has taken part in the international sphere to
maintain world peace (Nasution, 2016).
SBY as Indonesia's sixth president and first president directly elected, of course in
running the government also implements foreign policy. It can be said that during SBY's
administration, Indonesia's foreign policy was stable. This can be proven from one of the
successes, namely the improved economy in Indonesia (Maksum, 2015). One of the
foreign policy programs in the SBY era was Indonesia's participation in ASEAN. In
carrying out his foreign policy, SBY made ASEAN the main focus because of the role of
the Indonesian Ministry of Foreign Affairs which is always active in every ASEAN forum.
This was then realized through Indonesia's role in realizing the ASEAN Community in
2015 which had been designed since Bali Concord II in 2003. The realization of the
formation of this community invited various opinions from the Scholars. However, in an
effort to increase regional resilience in Southeast Asia, ASEAN is still a guideline for
Indonesia to carry out its diplomacy. For this reason, the ASEAN Community remains a
reality. In addition, by looking at economic development, making ASEAN a foreign policy
is the right choice because ASEAN is one of the regions seen as quite dynamic in moving
the global economy. This ASEAN Community was formed with the aim of having a
positive impact on fostering stability in the adjacent region and also in the future, this
community can help to create social welfare and stability in Southeast Asia (Lestari, 2015).
1. How are the challenges of Indonesia foreign policy towards Asean Economic
Community in SBY presidency?
C. DISCUSSION
With the existence of Asean Economic Community, it will make a free market, free
of goods, free of services, investment, free of capital in the ASEAN region which
will later be created in a region with equitable economic development and a fully
integrated region with the global economy. During SBY's reign, SBY had to face
economic problems in Indonesia. For this reason, realizing the ASEAN community,
especially in the AEC, can help the Indonesian economy and advance the economy
in Indonesia because of the many opportunities that can be obtained in this regard.
The AEC blueprint in 2015 can be used by Indonesian national businesses to serve as
a direction to expand coverage and penetration of the ASEAN market which will be
a signal and confirm the greatness of the Indonesian economy in ASEAN (Saputra,
2012).
Indonesia in running the AEC program has several opportunities. Indonesia has the
largest economic level in the ASEAN region with the ability of gross domestic
product (GDP) of 854 billion US dollars or 35% of the total ASEAN GDP in 2011 of
3.3 billion US dollars. In addition, Indonesia is the country with the most population
in the ASEAN region. This can help Indonesia as a potential market in the ASEAN
region and has the potential to embody the AEC. AEC can also provide opportunities
for Indonesian businesses to enter a broader market such as ASEAN. With the
establishment of the AEC, through trade cooperation and exchange of goods,
Indonesia is able to strengthen its cooperation and unity in the economic field.
In terms of export, Indonesia also has the opportunity to increase its exports to
intra-ASEAN countries. In 2010, the opportunity is currently only 18-19%, while
outside ASEAN is around 80-82% of total exports. In 2011, Indonesia was able to
increase its exports to 32.2 billion US dollars. This value has increased significantly
compared to 2010 which only reached 19,147 US dollars. AEC makes it easy for
Indonesia to build a food supply chain. With this AEC program, non-ASEAN
countries can also carry out export-import activities with Indonesia. With the AEC, it
can provide opportunities or new drivers for Indonesia's export growth and this can
be used as an opportunity for Indonesia to reduce trade barriers so that Indonesia can
increase its gross domestic product (GDP). With this increase, Indonesia will be able
to compete with superior products in agriculture, plantations and fisheries.
In carrying out foreign policy and striving to achieve these opportunities, of course,
Indonesia must also face the challenges that exist to realize the AEC with its single
market principle. These opportunities have their risks so that Indonesia must be
prepared for it. One of the biggest challenges that must be faced by Indonesia in the
AEC is that Indonesia still has a high level of social inequality among other member
countries. One example that can be taken Namely in 2009, there is a fairly high
difference in economic output reaching 258 billion US dollars between the country's
GDP of Laos which is only 1% of Indonesia's GDP. As a result of these conditions,
in 2011, when Indonesia became the chair of ASEAN, Indonesia proposed the
establishment of the ASEAN Framework on Equitable Economic Development
(EED). This aims to reaffirm the commitments made by ASEAN to achieve
economic equality among ASEAN members by seeking to improve the quality of
human resources, improve social welfare, open greater opportunities for ASEAN
members to participate in the integration process, and reduce inequalities
development.
Another challenge comes from the trade and services sector, where when Indonesia
conducts free trade flows in the field of goods or services, it will create competition
risk where Indonesia will not only be an exporting country, but Indonesia will also be
a destination country for exporters from foreign countries. With so many exporters
coming to Indonesia by selling goods of better quality, this will threaten the local
industry. So that later it will cause a trade balance deficit. In addition, from the
infrastructure sector, Indonesia is still far behind other ASEAN countries. So that
ahead of the implementation of the 2015 AEC, Indonesia needs to prepare several
infrastructures on land, air, sea, energy security, and information technology
President SBY was active in regional affairs at the time, but he also participated in
preparing Indonesian domestic affairs. This can be seen from what was done by SBY,
namely by issuing several INPRES (Presidential Instruction) in 2014. SBY's
government established a national committee, namely the National Committee for
Preparation of the Asean Economic Community Implementation in preparation for
dealing with the Asean Economy Community. President Susilo Bambang Yudhoyono
also issued INPRES which aims to increase competitiveness to face the Asean
Economic Community (AEC) or the Asean Economy Community (AEC) (Kontan,
2014). Increased competitiveness is guided by several strategies including:
C.3.1. National industrial development
With the establishment of the AEC, activities in ASEAN are more open and more
free. For this reason, in realizing the AEC in 2015, the SBY government tried to
prepare it as well as possible. In addition, with the AEC, Indonesia faces intense
competition in the economic field. Indonesia also has many opportunities to improve
its economy. AEC is expected to realize prosperity among ASEAN countries.
However, Indonesia's efforts to realize these opportunities did not escape the
challenges that must be faced. Therefore, Indonesia must be smart in taking advantage
of opportunities and facing existing challenges by issuing a policy. Such policies as
optimizing in improving the quality of Human Resources and also increasing the
quality and innovation in producing goods and services so that they can compete with
foreign products.
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