Jakarta. The government has played down concerns over possible changes in the economic relationship between Indonesia and the United States following the election of Donald Trump as president.
Trump, who championed a protectionist policy and for the United States to retreat from the global cooperation agenda, is coming into power at a time when Indonesia seeks to boost US trade and investment in the archipelago.
For one thing, the president-elect wanted to impose punitive import tariffs, in particular on China, and promised to shut down the Trans-Pacific Partnership initiative, a free-trade agreement between 12 Pacific Rim countries, which Indonesia also seeks to join.
"Nobody knows whether Donald Trump will continue the Trans-Pacific Partnership. [...] Even we are still studying the cooperation," Coordinating Economic Affairs Minister Darmin Nasution said on Thursday (10/11). "It's too early to tell and it's not the right time to conclude how his administration will be."
In the meantime, the government would focus on keeping domestic economic fundamentals strong, the minister said.
Financial markets also seem to agree with the government's assessment, that it remains to be seen how Trump translates his campaign rhetoric into a workable policy. The Jakarta Composite Index rebounded 0.7 percent at the closing on Thursday to 5,450, recouping some of Wednesday's 1 percent slump.
Finance Minister Sri Mulyani Indrawati separately highlighted that Trump's positions on trade, investment, interest rates and climate change in his campaign may change economic dynamics in Asia, including Indonesia.
"Like it or not, America is the world's biggest market," she said. "We see some aspects that will affect the global market both directly and indirectly. We'll keep our eyes on it so we'll have some options to ensure that Indonesia is not vulnerable to market developments in the United States, Europe and other Asian countries."
President Joko "Jokowi" Widodo said earlier that he hoped Indonesia's relationship with the United States would remain steady, especially on trade and investment.
The United States is usually among Indonesia's top 10 largest foreign direct investment sources, but it has been in decline, with 2015 investment amounting to less than half of that in 2013.
Bilateral trade between Indonesia and the United States has declined by an average of 3 percent annually since 2013, but the US market is becoming more important to the archipelago, as China – Indonesia's main trading partner – lowered demand for raw materials. The United States accounted for 11 percent of Indonesia's total exports in 2016, compared to just 7.6 percent in 2013.
Indonesia mostly exports textiles, rubber, electronic components and footwear to the United States, while importing aircraft, soybeans, seeds, fruits, machinery, poultry feed and electrical goods from there.