Commentary: After TPP, Indonesia Is in Southeast Asia's Battleground

The twelve Trans-Pacific Partnership, or TPP, Ministers hold a press conference to discuss progress in the negotiations in Lahaina, Maui, Hawaii on July 31, 2015. (Reuters Photo/Marco Garcia)

By : Rafli Zulfikar | on 7:19 PM December 07, 2016
Category : Opinion, Commentary

When the United States President-elect Trump said that the Trans Pacific Partnership, TPP, will be discontinued and that the US would leave soon as the uncertainty of TPP is rising. We know that TPP was launched by the Obama administration in order to keep the hegemony of US foreign policy in the Pacific and to rebalance China's foreign policy.

Obama's administration had launched its foreign policy toward the Pacific region in a so-called “Pivot to Asia” with several strategies such as the TPP, military cooperation between the US and several countries in the Southeast Asian region, known as cobra gold, as well as the deployment of 2,500 US military troops in Darwin, Australia.

Soon after Trump's victory, US foreign policy in the Pacific region seems to be replaced or changed radically, as it will be more conservative on the international economic policy and more moderate in international security policy. Under the Trump administration, US policy will be more domestic oriented.

It becomes rational when Trump tries to focus to improve the US economy and create more job opportunities, but it can be a problematic thing for international affairs, because China would probably take over the US hegemony in the Pacific when it chooses to be absent in the Pacific battleground. Nowadays, China's foreign policy in the Pacific such as Maritime Silk Road, Asian Infrastructure Investment Banking, or AIIB, and the Regional Comprehensive Economics Program, or RCPE, are more dynamic than the US' Pivot to Asia to encourage Asian Pacific countries to join or follow China’s scheme.

Although, until now, China is not a good player in the Southeast Asian region due to its anarchistic foreign policy such as the nine dash lines in the South China Sea that has caused a destructive relationship among China and Asia-Pacific countries.

The US decision to decrease its foreign policies in Southeast Asia will make unipolarism in Southeast Asia a battle ground, as China will get the opportunity to continue its hegemony in this area.

What about Indonesia's foreign policy in Southeast Asia's battleground?

Indonesia with its autonomous foreign policy can get more benefits in Southeast Asia battleground under President Joko "Jokowi" Widow’s ambitious development policies. This is because it requires more growth to create more jobs and decisive policy to join economic integration, such as with the RCEP, and more action by joining AIIB to build various infrastructure to push economic growth.

Autonomous foreign policy can get benefit from two pivots, not only from China, but also from the US alliance pivot like Japan. Indonesia may utilize members of two development banks, the AIIB and Asian Development Bank. Uncertainty and volatility in the Pacific will force Indonesia to provide smart responses to gain more.

When Jokowi visited Beijing, the world tends to see that Indonesia tends to lean on the Beijing alliance. Additionally, Indonesia has chosen China as a partner to develop its high-speed railway project and joined as one of the AIIB members.

Indonesia has a purpose to look for more funding from AIIB, and as we know, AIIB can be a counter-hegemonic strategy to balance the ADB in supplying liquid funding for the development agenda in Asia-Pacific. Indonesia can combine several projects like the maritime fulcrum with China's maritime silk road. Indonesia and China also have a good relationship where it becomes Indonesia's investment destination. Indonesia's Investment Coordinating Board, or BKPM, said that China's investment has increased at around 519 percent in the first quarter of 2016, as it became the fourth largest country investing in Indonesia.

On the other hand, although Indonesia and the US do not have a strong relationship, the US and its alliance are most strategic for Indonesia especially in the economic and security sectors. Indonesia-US trade was just around $113 billion in 2014 and made the US as the seventh biggest investor in Indonesia. Meanwhile, Indonesia and the US have great economic potential where US companies have a good perception about Indonesia. Around 87 percent of US companies believe that Indonesia has a serious will to reform its economic policy, according to the US Chamber of Commerce.

When we look at the Indonesia-US alliance, Indonesia also has a good relationship with its allies, such as Japan. In the first quarter of 2016, Japan's investments in Indonesia have increased by 32 percent and made it the second largest investor in Indonesia.

Indonesia has also invited Japan to build several prioritized projects such as the Patimban Deep Sea Port, Jakarta-Surabaya middle-speed railway and Masela offshore project in South Sulawesi. Japan's ADB is also the most important and strategic institution to fulfill Jokowi’s development ambition.

How to manage?

Pragmatics autonomy of Indonesia's foreign policy is a good one to respond to the dynamic geopolitic conditions in Southeast Asia. Indonesia has not only followed a Beijing pivot, but also the Tokyo pivot, which has become more important as until 2019, Jokowi's development programs need more funding of around $5.5 million to build his 35,000 megawatt power plants and infrastructure due to the low budget on the national development program, which is just around 3 percent of its gross domestic product. The World Bank has assumed that a country would be successful in its development program by using around 10 percent of its GDP.

Jokowi's development programs need more of a mutual relationship not only from China but also from Japan. China and Japan also need more international projects to inject their economic growth that have slowed down recently. Indonesia needs more foreign direct investment in its infrastructure sector to push its economic growth.

A book by Robert Axelrod and Robert O. Keohanein, "Achieving Cooperation under Anarchy: Strategies and Institutions" explains the game theory with a “tit-for-tat" scenario. A mutual relationship will make each party depend on the other. Indonesia has a good bargaining position as it is the largest country in the Southeast Asian region, or in the Association of Southeast Asian Nations, with the population and GDP reaching around 40 percent within Asean.

Indonesia must have strong leadership. It is a deterrent effect to another country, especially to China, that Indonesia also has power.

Indonesia's foreign policy in Natuna is one of example of implementation of the tit-for-tat scenario. More offensive autonomous foreign policies like that which was applied in the Natuna case will make Indonesia strong. Indonesia also has the potential power to bargain when it can bring Asean to unite in responding to external threats.

Furthermore, Indonesia has homework to manage foreign policies in the region. If Indonesia manages it, it will have more potential power to bargain with Beijing or Tokyo, as the autonomous foreign policy in Indonesia must be revitalized more to be slightly offensive and pragmatic to survive in the Southeast Asian battleground in the future.

Rafli Zulfikar received his bachelor degree in international relations at Jember University and is currently serving as a researcher in the Center for Internasional Studies and Trade. His views are his own.

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