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Yudhoyono, whose foreign policy mantra was 'A thousand friends, zero enemies,'
has cautioned Joko to look at the geopolitical consequences of signing up to the
TPP, which conspicuously leaves out China but includes US ally Japan.
(Antara Photo/Prasetyo Utomo) |
Jakarta.
Former president Susilo Bambang Yudhoyono has cautioned his successor against
signing up to the Trans-Pacific Partnership, insisting the justifications he
gave for refusing to join the trade pact while in office are still valid today.
In a series
of tweets sent on Friday, Yudhoyono said President Joko Widodo had every right
to commit Indonesia to the US-initiated pact, but warned that “If Indonesia is
not ready and is forced to enter the TPP, then our nation will suffer. Such is
the ‘law of globalization.’”
The essence
of the TPP, he wrote, “is trade and investment liberalization.”
“The TPP is
actually a good thing, if all the member states are ready, their interests are
accommodated and there are real benefits all parties,” he said.
“But if
we’re not ready for it, our market will be flooded with goods and services from
other countries, while our exports will fail to be competitive abroad.”
Yudhoyono
said his reasons for refusing to sign up to the TPP when he was in office
included the fact that Indonesia was preparing for a similar agreement on a
Southeast Asian scale: the Asean Economic Community, which comes into force at
the end of this year.
He added
that Indonesia also needed time to see the benefits from another trade pact,
the Asean-China Free Trade Agreement, which saw Jakarta’s trade deficit with
China doubling within a year of coming into full force in 2010.
Yudhoyono
also pointed out that the three other Asean countries that had signed up to the
TPP – Malaysia, Singapore and Vietnam – had fundamentally different economic
models from Indonesia. “The economies of Singapore, Malaysia and Vietnam […]
are ‘export-oriented.’ Indonesia is not. We have a large domestic market,” he
tweeted.
He said
that in order to protect its interests, Indonesia would have to be “tough” in
its negotiations – but that the current TPP members had concluded their
negotiations on Oct. 5.
Yudhoyono,
whose foreign policy mantra was “A thousand friends, zero enemies,” also
cautioned Joko to look at the geopolitical consequences of signing up to the
TPP, which conspicuously leaves out China but includes US ally Japan.
“Let us
ensure that we remain friendly with all our partners, including America, China
and Japan,” he wrote. “Let us maintain a free and active foreign policy […] an
all-directions foreign policy. Avoid allying with one country and distancing
others.
“Let us
also ensure that, whichever side we partner with, Indonesia’s national
interests will be prioritized above all else.”
He then
called on the Indonesian people to help Joko reach an “appropriate and clear
decision for the interests of the people and the nation.”
Joko’s
announcement, following a visit to the White House on Monday, that he was
committed to signing Indonesia to the TPP has met with concern from the
business community and the political establishment alike.
Yudhoyono’s
own statements follow his Democratic Party’s warning that Indonesia is not yet ready to face the competition that joining the pact would entail, citing
inadequate infrastructure and low public awareness about the TPP and its costs
and benefits.
“Are
Indonesians and the national economy really ready for this?” asked Edhie
Baskoro Yudhoyono, the former president’s son and a senior member of the Democratic
Party.
“How about
our domestic infrastructure? Has the government asked for the public’s opinion,
especially those involved in the national economy, about the possible impact of
the TPP on Indonesia in the future?”
Wrong step
The Great
Indonesia Movement Party (Gerindra), chaired by Joko’s rival in last year’s
presidential election, Prabowo Subianto, has also criticized the president’s
stance on the TPP.
Fadli Zon,
a Gerindra deputy chairman and deputy speaker of the House of Representatives,
said the TPP would only benefit Indonesia “if we had competitive businesses.”
Without
adequate infrastructure and strong supporting education, welfare and legal
systems, he warned, Indonesia would only be a “passive player” in the trade
agreement.
“It would
be a wrong step to join the TPP,” Fadli said on Wednesday.
Economist
Lana Soelistianingsih of the University of Indonesia said separately that
“Countries with manufacturing-based exports will be able to perform better in
this partnership.”
“Our exports
are mainly raw materials like oil and gas. If we can we get our commodities
into a market like Chile” – which has signed up to the TPP – “can we compete
with Brazil, which is much closer to Chile than Indonesia is? That’s the
concern,” Lana said on Wednesday.
“How can we
improve our manufacturing sector without electricity? It’s not that we should
refrain from entering the partnership, but we need a clear blueprint on what
products we want to sell, which raw materials we need to manufacture the
products, and what kind of infrastructure we need,” she said.
The TPP,
forged by the United States and other 11 countries around the Pacific Rim,
including Australia and Canada, has a stated goal to “to promote economic
growth; support the creation and retention of jobs; enhance innovation,
productivity and competitiveness; raise living standards; reduce poverty in our
countries; and promote transparency, good governance, and enhanced labor and
environmental protections.”
In
practice, the biggest impact will be the lowering of trade barriers, including
tariffs.
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