Indonesia, China and India Could Be Making a Real Difference

Posted on October 24, 2012

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“Cooperation is a much better form of geopolitical defense than instigating scenarios that pit neighboring countries against each other.”

India, often represented by the elephant, which is known for its strength and steadfastness, is a major steadying force in today’s business world. Indonesia, often represented by the garuda, which is known for its ability to stretch out its wings and soar into space, though a fledgling in the global business world, is a country on the verge of doing great things — if it uses its assets wisely.

This shared use of animal symbols to represent important national qualities is not the only common bond that has helped India and Indonesia build strong relations. Beyond a love of symbolism, India and Indonesia have many other things in common. These range from being equally-fragmented democracies, their links in the levels of architecture, art, literature and language, as well as the challenges of being highly populous countries dealing with mega-issues like poverty, increasing economic growth and delivering citizens’ rights while struggling to control corruption.

India and Indonesia have been closely associated since the time of Indonesia’s struggle for its independence. Jawaharlal Nehru, India’s first prime minister, was a strong supporter of Indonesia’s struggle for freedom. Post-independence, both countries shared similar views on non-alignment, anti-colonialism and anti-racialism.

In 1950, President Sukarno was invited as a ‘chief guest’ at the first Republic Day function of India, which in Indian terms is one of the highest honors given. While both nations were close during the period after independence, a period of slowly drifting apart followed, due in part to diverging foreign policy priorities. But India’s selection of Indonesian President Susilo Bambang Yudhoyono as a chief guest at the 62nd Republic Day celebration signaled the return of closer ties with Indonesia.

Since the development of India’s Look-East Policy, initiated in 1991, India has made rapid progress in its relations with other Southeast Asian countries too. For India’s strategists, it made political, social and economic sense for India to put great efforts into developing these bilateral relations with Indonesia and its other Asian neighbors.

The Association of Southeast Asian Nations is an important partner for India because India is the seventh-largest trading partner of ASEAN and the sixth-largest in foreign direct investment. That India is succeeding with Indonesia in this regard is seen in the figures themselves. Bilateral trade between the two nations has surpassed $20 billion and due to the nature of this fast-growing business between India and Indonesia, bilateral trade targets for 2015 have been revised upwards from an easily achievable $25 billion to an ambitious $45 billion. Indonesia is India’s second-largest trade partner in Southeast Asia. The upcoming launch of an Indian business forum in Jakarta is one of the symbols of this continuously developing relationship between the two countries.

But while this relationship-building between India and Indonesia was taking place, the panda, symbolizing China, has not sat back and just looked on.

China is ASEAN’s largest trading partner. Its thirst for materials from the whole of Asia is no secret, and this is a thirst that often sets China up as a direct competitor for the same resources that Indonesia sells to India.

Primary products, from Indonesia exported to India and China are equally important to the Indonesian economy. For example, India is the leading importer of palm oil in the world. It imports 80 percent of its crude palm oil from Indonesia. Indonesia is also the world’s largest coal exporter and China is the largest importer of Indonesian coal (followed by India).

But can this economic relationship last for the long haul? It may be time to question this type of bilateral relationship.

Given that Indonesia is also in great need of the commodities mentioned, especially coal and the electricity that it produces, shouldn’t Indonesia be rethinking its export strategy and using surpluses to fuel its own expanding infrastructure needs, such as those outlined in the government’s regional economic development program, the MP3EI?

Instead of taking coal away from Indonesian consumers, India could support these programs in other ways. Public-private partnerships, with the government and the private sector joining hands to finance projects, for example, is something that India is well-versed in.

China could also collaborate on these more “up-stream” activities to support the overall development of Indonesia, rather than seeing Indonesia purely as a source of raw materials to develop its own economy. Developing individual economies is crucial but regional development is paramount.

How India, Indonesia and China collaborate as close geographical neighbors, and as social, economic and political allies is as important as how well they trade with each other.

What if we characterized these linkages, not as a series of bilateral relationships between India and Indonesia, China and Indonesia, and India and China, but as a trilateral relationship that was developed on its own terms?

Half of the world’s population lives in these three countries. Together, their economic might is huge. Should common ground be sought on some of the more global challenges, such as climate change, would not this triumvirate really be a force to be reckoned with?

Instead of seeing every political and economic change in the region as a gambit in a chess game, played with two opposing players, what if the game expanded into a three-dimensional version, with three players, working together in a three-sided partnership, with the ultimate goal focusing less on winning, and more on successfully pushing the limits of the game, making the game a success for all?

Strategic partnerships between the three countries can be developed to enable the countries to work together and allow bilateral relationships with other ASEAN members as well. Cooperation is a much better form of geopolitical defense than instigating scenarios that pit neighboring countries against each other.

Harmony should be the shared mantra for elephant, garuda and panda alike.

Jakarta Globe