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Indonesia Intensifies Economic Diplomacy To Boost Growth

Monday, March 02, 2015 > 11:05:23
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(Antara News)

Indonesias economy only grew 5.02 percent last year and failed to meet the target set in the 2014 revised budget.

Finance Minister Bambang Brodjonegoro stated on Feb. 5, 2015, that the economic slowdown in 2014 was a strong wake-up call for the government to adopt a more serious approach to boost the countrys economic growth.

He, however, is optimistic that Indonesias economy will grow 5.7 percent this year, despite the economic slowdown in 2014.

According to him, the investment climate will continue to improve in 2015, and private investments will boost economic growth in Indonesia.

To unearth ways to boost economic growth, the foreign ministry organized the Indonesian Representatives Work Meeting on February 2-5, 2015, which was attended by 132 Indonesian ambassadors, consul generals, consuls, and permanent representatives stationed overseas.

President Joko "Jokowi" Widodo, in his opening remarks at the meeting, highlighted the importance of enhancing Indonesias overseas economic diplomacy, which is one of his administrations four focus areas in addition to safeguarding the Indonesian territory, protecting Indonesian nationals and legal entities overseas, and strengthening Indonesias role in the global arena.

He urged Indonesian envoys to hone their instincts to identify economic potentials in their host countries.

The head of state encouraged all Indonesian diplomats posted overseas to push for economic diplomacy, so that greater benefits of state diplomacy can be reaped by the people.

"Based on my experiences as a governor and mayor for almost nine years, I conclude that almost 90 percent mission of the representatives of most developed countries is economic diplomacy," President Jokowi remarked.

He hoped that Indonesias ambassadors or representatives abroad will lay greater emphasis on the countrys diplomatic priorities, especially in terms of sovereignty, economic diplomacy, and citizens protection.

Foreign Affairs Minister Retno L.P. Marsudi noted that Indonesian economic diplomacy will be able to offer quick responses to economic- and business-related queries as it can give firsthand information on any matter of interest to the country.

"Until now, most of the inquiries received by the Indonesian representatives abroad were not responded to; so, I have told them to respond within three days," Minister Marsudi remarked.

Minister Marsudi also suggested that Indonesian representatives abroad should help to improve the tourism sector as the target for the next 2-3 years is to reach 20 million tourists through direct field visits to maximize promotions and provide the right information about Indonesia.

Besides this, Indonesian diplomats must be able to push foreign direct investments (FDI), particularly in those sectors that will yield results such as providing employment opportunities, encouraging small-medium entrepreneurs, and empowering women.

"Indonesian diplomats should change their mindset. Right now, in their heads, an Indonesian diplomat should be a merchant who attracts investors, improves the tourism sector, and explores business potentials," she explained.

Besides underlining the focus areas of Indonesias diplomacy, Marsudi remarked that Indonesian diplomats will work hard to lobby for the protection of national interests and stand for its citizens and legal entities all over the world.

"The results of the Indonesian diplomats work must benefit the Indonesian people and nation. In line with the Constitution, Indonesias diplomacy must be able to contribute to world peace and welfare," she noted.

According to Deputy Minister of Foreign Affairs A.M. Fachir, the president has affirmed that the Indonesian diplomatic priorities should be translated by the countrys representatives abroad.

"So, our ambassadors or representatives abroad must become marketers and opportunity seekers. We have called our ambassadors for a working meeting," A.M. Fachir said recently.

He noted that the efforts will improve the representatives performance, especially in terms of bureaucratic reforms and good governance, and will also help to modify the structure of the Foreign Ministry to optimally translate the vision and mission of the president.

One of the recommendations put forth during the working meeting themed, "Diplomacy for the People: Strengthening the Presence of the State in Foreign Politics" highlights the need to establish a national promotion board to support Indonesian economic diplomacy overseas to promote trade, tourism, and investment.

"We recommend the establishment of a national promotion board, which will encompass the sectors of trade, tourism, and investment to economize promotional costs," stated Darmansjah Djumala, the foreign ministrys head of the Policies Study and Development Board.

The board is expected to conduct efficient and effective economic promotional activities overseas to attract FDI, including those in maritime infrastructure projects related to deep sea ports.

"We will try to attract investments for the construction of 24 ports, 88 shipyards, 500 power plants, and nine airports in border areas," he noted.

Furthermore, Djumala noted that the Peoples Representative Council had indicated that it was in favor of the move to raise the budget to support economic diplomatic measures of Indonesia.

Speaking during the working meeting, the chief of the Investment Coordinating Board (BKPM) expressed optimism that Indonesian ambassadors will conduct investment diplomacy abroad to attract investments into Indonesia.

He noted that the investors faced four main constraints while investing in Indonesia: infrastructure and logistic problems; non-transparent and complicated licensing; overlapping regulations; and the problem of industrial relations.

The government is attempting to tackle issues related to infrastructure and logistics by developing sea toll, railway access, power plants, and various other projects, he revealed.

In order to overcome non-transparent and complicated licensing procedures as well as overlapping regulations, the government, in January 2915, launched an integrated service system called the One-Roof Integrated Service (PTSP).

The BKPM has set itself a target to attract Rp343.7 trillion in foreign investment of the total investment target worth Rp519.5 trillion.

The mainstay sectors to meet the investment target is the processing sector and its downstream industries worth Rp267.5 trillion, the service sector and infrastructure valued at Rp163.6 trillion, and the primary sector that is expected to attract Rp88.4 trillion investment.

"We hope our representatives abroad will inform us about any serious interest to invest in Indonesia, so that the BKPM could facilitate it until the investment is realized," the BKPM head noted.

The BKPM also hoped that Indonesian envoys abroad would pay attention to Indonesian businesses that have expanded their endeavors overseas.

"We hope Indonesian representatives abroad would carry out their main tasks in facilitating their entry into Indonesia for investment and in protecting and encouraging Indonesian companies to become players at the global level," he remarked.

Franky is optimistic that the synergy among ambassadors and Indonesian representatives abroad could boost foreign investment and help achieve the target set for 2015.

Franky has expressed hope to create a synergy with the Indonesian envoys to attract FDI into the country.

Indonesian envoys overseas can disseminate information about the governments efforts to improve the countrys investment climate, Sibarani stated here on Tuesday.

He is optimistic that the countrys foreign investment target for 2015 can be achieved if there is a synergy between his office and the Indonesian ambassadors.

"The BKPM has set a target to attract foreign investments worth Rp343.7 trillion, out of the total investment target of Rp519.5 trillion," he added.

He is hopeful that foreign investment funds would come from Singapore and other ASEAN member nations, China, South Korea, Japan, the United States, and European nations.


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