On October 2, 2020, India and Myanmar participated in the 19th round of Foreign Office Consultations. This took place virtually, and new means of cooperation were discovered with India being represented by Foreign Secretary, Harsh Vardhan Shringla and Myanmar being represented by Permanent Secretary, U Soe Han.
During the consultations, both sides reviewed the entire gamut of relations, including border cooperation and up-gradation of border infrastructure, the status of India’s ongoing development projects in Myanmar, trade and investment ties, power and energy cooperation, consular matters and cultural cooperation, including the ongoing restoration work on earthquake-damaged pagodas in Bagan. But most importantly, India stated its agreement to provide debt relief service to Myanmar under the G-20 Debt Service Suspension Initiative (“DSSI”), which shall assist Myanmar in its efforts to tackle the COVID-19 pandemic. Under DSSI, the severe impact of COVID-19 pandemic is being managed with the encouragement of the WBG, IMF and consequently, G20 economies are allowing the world’s poorest countries to suspend repayment of official bilateral credit. In October itself, India handed over 3000 vials of Remdesivir to Myanmar to fight Covid-19. There is even an exchange of assurance regarding the joint development of the vaccine between the two States.
The COVID-19 Pandemic has shaken up the entire world, and in these troubling times, assistance from neighbouring nations is crucial. The developing nations will have to come together to support each other and ensure the safety of its citizens. Myanmar and India share a relation of tremendous support, and such exchange of assistance will strengthen the bilateral relations as well as provide the key to not be completely dependent on the western nations in times of crisis.
The Sittwe Port Project
Infrastructure is indeed very significant for every country, and apart from technical assistance, often financial assistance is needed to complete such projects due to the high amount of capital involved. Several infrastructure projects in Myanmar like the Kaladan Multi-Modal Transit Transport Project and the Trilateral Highway have attained assistance from India. A press release recently reported that India and Myanmar have also agreed to work towards the operationalization of the Sittwe port in the Rakhine state in the first quarter of 2021.
Sittwe port is part of the Kaladan multi-modal transit transport project, which is crucial to India’s plans for the landlocked northeastern states to access the Bay of Bengal through Mizoram and to provide alternative connectivity to Kolkata without having to use the circuitous Siliguri corridor. Once the port is operationalized through a private operator, Indian goods can be taken via the Aizawl-Zorinpui-Palletwa axis to Kaladan river, and then transferred to Sittwe port.
This move is beneficial not only for India and Myanmar but also for other southeastern nations. Such a project is beneficial for enhanced connectivity and economic participation amongst various nations in a convenient manner. Consequently, a Special Economic Zone near the Rakhine State would depict a long-standing economic relation between the two. The northeastern states of India will also receive a boost through this project. The easy access to the Bay of Bengal will open up new opportunities for trade and investment, especially for northeastern nations, which has the capacity to subsequently benefit the whole country. The trade between Myanmar and India is also bound to rise with this project. The Act East policy of India will receive a colossal incentive on completion of the project.
India’s proactive approach towards gaining a regional outreach and building ties with Myanmar
India shares borders with nine nations which include Afghanistan, Bangladesh, Bhutan, China, Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka. The tensions and conflicts between Pakistan and India are indeed quite popular in the entire world. The deep cultural, as well as historical link between Pakistan and Afghanistan, is well known. Additionally, even when diplomatic ties between India and China are still “looking” strong, the pandemic has brought in new dimensions to the relations between the two. Therefore, amongst the nine neighbouring nations, only six nations remain with a potential of healthy and strong bilateral relations.
Myanmar, being one of these six, the “shared historical, ethnic, cultural and religious ties” between India and Myanmar, is significant in the development of foreign relations of India. Myanmar shares close borders with the Northeast Indian states of Arunachal Pradesh, Manipur, Mizoram and Nagaland with a shared border of 1,643 kilometres and the land-locked nature of these states becomes a myth when we look at their connectivity through Myanmar to the Bay of Bengal.
Additionally, Myanmar is a key pillar of India’s Act East and Neighborhood First Policy. India’s ‘Act East’ policy is a diplomatic initiative to promote economic, strategic and cultural relations with the vast Asia-Pacific region at different levels. Certainly for India’s Act East Policy to be successful, the betterment of connectivity with Myanmar and Thailand is vital. Being the only country that sits at the intersection of India’s “Neighborhood First” policy and its “Act East” policy, Myanmar is an essential element in India’s practice of regional diplomacy in the Indo-Pacific and serves as a land bridge to connect South Asia and Southeast Asia.
Myanmar is also India’s closest defence partner in the region. Seeing that Myanmar is critical to its national security interests, India provides military training and conducts joint military exercises with the Myanmar Army like the India-Myanmar Bilateral Military Exercise (IMBAX-2017 and IMBEX 2018-19), by which India had trained the Myanmar Army to be able to participate in UN Peacekeeping Operations. Delhi has also agreed to train Myanmar army officers and allow them to study at military academies in India. Currently, with an energy portfolio of more than $ 1.2 billion, Myanmar is the largest destination for India’s investment in the oil and gas sector in Southeast Asia.
Therefore, in terms of the energy sector, defence sector, the Act East Policy and the development of the northeastern nations, the relations with Myanmar will turn out to be very important in the coming future. Being an important country amongst the Bay of Bengal countries, Myanmar plays a strategic role in the upliftment of the economy of India. Myanmar and India even share a 725-km maritime boundary in the Bay of Bengal.
Other agreements such as Project Agreement for the establishment of modern Integrated Check Post at Tamu, MoU for the construction of 50 basic schools and the Project Agreement for the upgrading of agricultural mechanization sub-station will also be signed shortly.The development in Rakhine State, the sharing of library material and other factors have a prime influence on the bilateral relations. The humanitarian assistance and the grants provided by India have always been a leading example for many other nations. In February 2020, the prime minister and President Myint later held talks at Hyderabad House and ten agreements were signed between the two countries, the focus being on development projects under India’s assistance, particularly in the conflict-torn Rakhine state.
The facts stated above reflect the complete dynamic approach adopted by India to establish strong strategic relations. It is undoubtedly true that both nations have the potential to flourish and can achieve significant heights if given the right incentive. With each other`s support, both the nations may even give a competitive edge to the neighbouring nations.
In fact, the proactive approach of India is indispensable in the prevailing circumstances so as to avoid the negative influence of China on Myanmar. Such influence could even conclude with Myanmar becoming a debt-driven nation in the clutches and control of China, completely. The balance of power in the Southeastern nations may even receive a drop once China acquires the control of Myanmar. This may cause a major security concern for India. But with a total bilateral trade of $2 billion, India’s economic engagement with Myanmar lags behind China, behoving Modi’s government to scale up India-Myanmar economic ties. Therefore, the proactive approach being initiated by India becomes a key factor to influence the regional relations.
If a reactive approach is adopted by India, it will be in a ditch with too many problems all occurring at once. The consequences will cost more if prevention is not done currently. It is a known fact that a spark neglected burns the house. Since India can predict the circumstances in the future as an outcome of these bilateral relations with reasonable certainty, a proactive approach becomes suitable. The benefits accruing to both the participants is desirable and may even achieve a higher standard, even if one of the participants plays a leading role.
The dominant powers in ties with Myanmar
There are several dominant powers that are building ties with Myanmar, namely India, China, USA, and other Western nations. Beijing is using COVID diplomacy to push its BRI initiative in neighbouring Myanmar via CMEC. China has also influenced economic development and political stability in Myanmar. In January 2020, “Paukphaw”, which literally means born together, implying not only a shared destiny but racial kinship, was reinforced through strong political and economic bonds between Myanmar and China. It was even reported recently, in September 2020, that China seeks to set up military logistic facilities in Myanmar. This is a measure to maintain military control in the region. The Auditor General of Myanmar also cautioned the government officials of Myanmar about the dependence on debt being given through Chinese loans. The “client state” formula or the “satellite state” formula of China has already affected Sri Lanka, and Myanmar must take into consideration the impact of the controlling influence of China, no matter how generous China behaves.
The influence of China on Myanmar dates back to decades of history. However, the rising influence on China on Myanmar was noticed by the US when Barack Obama came to power in 2009 and launched “Pivot to Asia” to emphasize that the US had strategic interests in Asia. Myanmar also launched political and economic reform in 2008 and adopted a “Look West” policy by re-establishing its linkages with the US. Even recently, in August 2020, US new Ambassadorial nominee to Myanmar Thomas Laszlo Vajda has emphasized that one of his goals as envoy would be “to advance US interests and values” in the Southeast Asian country and help defend the country against “malign influences” in a veiled reference to China. This shows how the US has also been observing Myanmar as a potential ally and wishes to enhance its position over Myanmar.
The dominance of Myanmar of neighbouring nations like China and India along with powerful western nations like the US has constantly been rising. In furtherance of promoting its domestic interests, Myanmar has accepted every proposal which may benefit the nation currently, keeping aside the intent behind these proposals.
Balance of Powers and Competing Interests for India
With Myanmar receiving aid and assistance from different time zones and diverse regions, a crucial question which arises is, how has Myanmar been balancing these powers? China and India not being in a “perfect” relation currently, Myanmar is technically attaining immense assistance from both these competing nations. Still, Myanmar has been effectively managing a diplomatic tie with both the nations. Similarly, Myanmar shows no stick-to-the-neighbour formula when dealing with the US. The balance of powers by Myanmar is commendable; however, very vulnerable as well. China and the US are at a constant pseudo-Cold War and with so many competing nations looking for Myanmar as a trophy prize, one day or another, Myanmar will have to choose. Although none of these nations would be quite happy with the second prize.
With so many competing interests, it may be probable that a country starts to wonder, is it even worth it? India, as a nation, has achieved remarkable heights recently and is still very encouraged to grow. There have been instances when Myanmar has shown a disinterest towards China. One can say that quick glances of the control of China keep occurring at Myanmar and at these junctures, Myanmar has broken several contracts and reacted boldly. By challenging China’s monopoly, the Myanmar government is opening strategic space to create further competition between India and the United States on the one hand and China on the other, affording the Myanmar government a more comfortable degree of leverage and autonomy in the international arena.
There is a high potential for India in Myanmar in various diverse sectors like agriculture, infrastructure and defence. With China trying to push Myanmar into a debt trap, it is the right time for India to stick with Myanmar when Myanmar realizes the intent behind practices of China.
One can foresee Myanmar`s bias towards India in the coming future. Myanmar has even decided to expedite India-backed infrastructure projects and widen security ties with India as it seeks to balance China’s expanding presence in the country in the backdrop of Beijing’s active cross-border support for rebel groups and push for early completion of BRI projects. By challenging the BRI project, Myanmar shows how India is a priority over China. The potential of India and Myanmar in exploring complementary linkages in pharmaceuticals, agriculture, information technology and telecommunication infrastructure, traditional and renewable energy, among others, can present a compelling case for commodity-linked, export-oriented investment.
Myanmar is a nation with latent qualities and abilities. Although several powers have been influencing the decisions of Myanmar, the actions of Myanmar must portray what is best for its domestic self. The interest of the nations itself must never be subsidized. India has a lot to gain from Myanmar and a lot to give to Myanmar as well. This give and take relationship has been the foundation of the bilateral ties between the two nations. However, the ties are in a vulnerable stage currently, but the proactive approach of India can mitigate all doubts and ensure that the struggle to support shall be worth the effort that India is putting in.
The ties will benefit the neighbouring nations with security and infrastructure and give the Southeastern Asian region a balance of resources as well as power. India is at a stage where it will regret if it backs out now and will have to take the risk of a proactive approach to assure support to Myanmar.
AUKUS One-Year Anniversary, Indonesia’s Response During NPT Review Conference
The dilemma experienced by Indonesia in responding to the arms race in the region reaps many concerns. Australia announced plans to acquire nuclear-powered submarines as part of a joint U.S.-British security alliance called AUKUS. Australia intends to respond to Chinese hegemony in the Asia Pacific. Exactly a year ago, Indonesia, represented by the Ministry of foreign affairs in September 2021, responded with 5 points to which Australia must pay attention. A year passed. How was the commitment of ‘ the Treaty of Amity and Cooperation (TAC) among regional countries, Indonesia’s response and analysis of nuclear non-proliferation diplomacy regional security during the NPT Review Conference on September 12-16, 2022?
AUKUS is an acronym for three countries: Australia, the United Kingdom (UK), and the United States (US). AUKUS is a trilateral security pact or international security agreement of three parties, namely Australia, the United Kingdom, and the United States. The primary purpose of this security pact is in response to the acceleration of Chinese power with the nuclear submarine project. In response to the arms race, Indonesia gave a warning signal to Australia by complying with the normativity of international law. A year later, academics need to analyze the normative perspective based on the ‘ Treaty of Amity and Cooperation approach to legislation. The case study will analyze the causes and responses of Indonesia.
Speaking about AUKUS, on September 17, 2021, Australian Prime Minister Scott Morrison said that he would hold a direct meeting with Joko Widodo. The case stems from the acceleration of Chinese hegemony in the South China Sea because there are strategic sea lanes and potential oil and gas wealth. This attitude of China is inseparable from the ‘Nine Dash Line’ claim that crosses Southeast Asia. Indonesia finally responded to the arms race in this region through 5 critical points for Australia, especially its commitment to the TAC. TAC is an association of Southeast Asian Nations (ASEAN) that feels vulnerable during a war between China and the US, where the supremacy of both is at play in Southeast Asian countries. Australia and the US have agreed to promote lasting peace, friendship, and cooperation in Southeast Asia.
Furthermore, TAC was established in 1976, and the basic principles of peaceful coexistence and friendly cooperation among countries in Southeast Asia include Australia as the closest country to Southeast Asia. Australia needs to pay attention to international norms that apply to good relations between countries. It is a legally binding code for relations between countries in the region and beyond. The treaty has been amended three times, in 1987, 1998, and 2020, respectively, to allow for the approval of countries outside Southeast Asia and regional organizations whose members are sovereign, among other countries. As of January 2021, there are 43 High Contracting Parties in TAC.
Looking more broadly at the AUKUS launch, Indonesia needs to look deeper into the big question mark of Australia’s interests, not only with the US but also with the surrounding region. AUKUS is a binding pact between the US and Australia. While it was the beginning of AUKUS, the pact will bring several technological benefits to Australia regarding cyber capabilities, Artificial intelligence, and quantum computing, among others. Moreover, there is comfort in that.
The cause of the formation of AUKUS is in the context of hegemony in the South China Sea. Disputes in the South China Sea involving China and the US are caused by several interests, namely political, strategic, and economical. The US claims the LCS should be guarded without lawful hindrance to the movement of the military, commercial and private vessels. In addition, the US emphasized that coastal states respect UNCLOS, which includes coastal states ‘ peaceful norms towards EEZ. The US has allied agreements with Thailand, South Korea, Japan, Australia, and the Philippines in the LCS region. The US also said it has close ties with New Zealand and Singapore. Therefore, the US offers a strong development and defense opportunity to the Asian country’s security network. Sometimes, Indonesia responds when the US defense in question does not involve Indonesia in it, including in the AUKUS. Australia and the United States have signed an agreement aimed at promoting lasting peace, lasting friendship, and cooperation in Southeast Asia.
ASEAN countries are already agitated about the re-emergence of multilateral cooperation (Australia, the US, Japan, and India). AUKUS now appears to have added military might, Connie Rahakundini Bakrie, a military analyst at Ahmad Yani University in West Java, said. Many alliances do not involve Indonesia, proof that Indonesia cannot remain silent because Indonesia is one of the leaders and influential countries among countries in ASEAN.
Referring to the functions of diplomacy, the melting of deteriorating relations, the Prevention of War, establishing cooperation, building opinions, and carrying out foreign policy countries, Indonesia responds to the arms race that began to heat up in the LCS case, the Australian Nuclear Submarine. Guided by TAC and UNCLOS, Indonesia gave Australia a precautionary warning. Based on the Ministry of Foreign Affairs, the TAC regulates conflict resolution mechanisms among state parties involved peacefully. The TAC was signed in 1979 by the 5 (five) founding Heads of state of ASEAN. The TAC was amended in 1987 to open countries’ accession in other regions. As of 2014, 32 (thirty-two) countries, including 10 ASEAN countries, have acceded to the TAC.
Nuclear proliferation over time has changed. At first nuclear development was associated only with security. Nevertheless, now nuclear is also narrated as a security holder. For instance the US-India deal, the US has taken the lead in acquitting India of the charges. Even before the U.S.-India nuclear deal appeared to be heard, it became a disturbing consequence. The US became willing to grant nuclear permits following its national interests. Another example of US intervention in nuclear matters, Pakistan and Israel, were also denied access to the nuclear technology market. Pakistan’s National Command Authority, responsible for the nuclear weapons program, was declared in August 2007. The US-India nuclear agreement would have implications for Strategic hegemony, allowing India a large number of nuclear weapons if left unattended.
That is what Indonesia fears when it is not included in the security agreement between the US country and its allies in the AUKUS. Disputes in LCSs close to Indonesia as a signatory to UNCLOS need to take action or voice recommendations along with a response. AUKUS started the project with the Australian Nuclear Submarine plan, which in the future may be nudging Indonesia because Australia and Indonesia are limited close to maritime waters. The Ministry of foreign affairs of the Republic of Indonesia stated the Australian Nuclear Submarine.
A result of the acceleration of Chinese power in the South China Sea attracted the United States’ response to become a player in it. The United States joined Australia. Indonesia, which borders the Nine-Dash Line and is directly affected by Chinese hegemony in the LCS, is proven by Chinese ships entering Indonesian waters. The non-inclusion of Indonesia as a collection of AUKUS countries makes Indonesia also have to respond to the AUKUS project, namely the Australian Nuclear Submarine. Although the purpose responds to Chinese hegemony in the LCS, Indonesia should be wary of a maritime country close to Australia. Therefore, Indonesia issued a statement, and its response to the Australian nuclear submarine project was withdrawn from the normative side, especially in holding the ‘ Treaty of Amity and Cooperation. Indonesia also warned Australia to be careful and pay tribute to UNCLOS 1982 in maintaining peace and security in the region.
During the anniversary of AUKUS, Indonesia said:
“Indonesia calls upon all States parties to the Treaty to garner political will and create opportunities for IAEA member States to develop a constructive approach on verification and monitoring arrangements of the nuclear-armed forces, with a view, among others, to enhance safeguards agreements that tighten monitoring measures for uranium designated for naval propulsion reactors in non-nuclear-weapon States to prevent diversion of that material for use in a nuclear weapons program.”
A year of the AUKUS commemoration, in July 2022, IAEA Director-General Rafael Grossi said satisfied with Australia’s commitment to comply with Nuclear non-Proliferation. The 10th Review Conference of the Treaty on the Non-Proliferation of nuclear weapons (NPT) on 12-16 September prompted discussions on AUKUS. Indonesia had opposed AUKUS, and the Ministry of Foreign Affairs of the Republic of Indonesia stated Australia’s nuclear submarines, especially the nuclear program close to Indonesian waters. A year later, Indonesia’s submission invited much international attention. This submission shows that Indonesia opposes Australia’S SSN program and seeks to prevent it. Whatever the Indonesian government’s personal views, the working paper does not oppose the acquisition of SSN by Australia. In fact, it provides a path to the establishment of a solid protective regime.
Muslim piety in Southeast Asia mirrors increased religious traditionalism in the Middle East
In a mirror image of recent polling in the Middle East, a just-published survey of Muslims in Southeast Asia suggests Islam’s central role in people’s daily lives and choices.
The survey was published days after former Indonesian minister of social affairs Habib Salim Segaf Al-Jufri was named secretary general of the Qatar-based International Union of Muslim Scholars (IUMS), founded by controversial Islamic scholar Yusuf al-Qaradawi, one of the world’s foremost Muslim theologians associated with the Muslim Brotherhood. Mr. Al-Qaradawi died on Monday in Doha at the age of 96.
Intriguingly, Mr. Al-Jufri, a senior member of Indonesia’s Brotherhood-affiliated Prosperous Justice Party (PKS), also represents the World Assembly of Muslim Youth (WAMY) in East and Southeast Asia, a Saudi government-funded organization initially established in the 1970s to promote Saudi religious ultra-conservatism globally. Since 2016, the group has been redirected to promote Crown Prince Mohammed Bin Salman as a reformer pushing the kingdom towards a more moderate and tolerant interpretation of Islam.
The publication also came as Nahdlatul Ulama, the world’s largest Muslim civil society organisation in the world’s most populous Muslim-majority country and democracy, forged an unlikely alliance with Saudi Arabia’s Muslim World League.
Like WAMY, the League, once a prime vehicle globally propagating Wahhabism, has become Mr. Bin Salman’s primary vehicle in his effort to garner religious soft power and propagate an autocratic version of Islam that is socially liberal, but that demands absolute obedience to the ruler.
Neither event will have influenced the responses of the 1,000 people covered in the survey of Southeast Asian Muslims. But the events put the poll into a context in which Muslim organisations, whether state-controlled or not, are pushing different concepts of a moderate interpretation of Islam and making political Islam’s perceived legitimacy or illegitimacy one of their key drivers.
Mr. Bin Salman, who pushes social reform against the background of a history of promoting ultra-conservative dominance, may be more concerned about the growing importance of traditional Islam than governments in Southeast Asia, whose history and encounter with Islam are often influenced by local culture, tradition, and mysticism.
Even so, political and business leaders in Southeast Asia, home to 276.5 million Muslims who account for 40 per cent of the region’s population, are likely to take note of the Southeast Asian survey as well as recent polling in the Middle East amid perceptions of greater religious conservatism in their countries that are not only aligned with trends in other parts of the Muslim world but also in major non-Muslim faith groups across the globe.
Malaysia and Indonesia, together with Saudi Arabia and the United Arab Emirates, emerged as the top four halal markets on this year’s Global Islamic Economy Indicator compiled by US-based research and consultancy company DigiStandard.
The Indicator considers various sectors, including halal food, Islamic finance, Muslim-friendly travel, recreation, and media. Malaysia maintained its long-standing top position because of a 20 per cent jump in investment in Shariah-compliant funds and the success of its Islamic cartoons for children.
Ninety-one per cent of the respondents of the Southeast Asian survey conducted by two New York-based consultancies, Wunderman Thompson Intelligence and the Muslim Intel Lab established last year by YMLY&R, described a strong relationship with Allah as very important.
Lagging in importance was wealth, which was of significance to only 34 per cent of those surveyed, followed by 28 percent who cared about their passions and 12 percent to whom fame was a concern.
Eighty-four per cent of the respondents in Malaysia and Indonesia said they prayed five times daily. Thirty-three per cent described themselves as more observant than their parents, 45 per cent said they were just as observant as their parents, and 21 per cent stated that they were less observant.
Religion’s increasing importance stroked with the polling in the Middle East where 41 per cent of 3,400 young Arabs in 17 Arab countries aged 18 to 24 said religion was the most important element of their identity, with nationality, family and/or tribe, Arab heritage, and gender lagging far behind. That is 7 per cent more than those surveyed a year earlier.
The Middle Eastern polls further showed that a majority disagreed with the notion that “we should listen to those among us who are trying to interpret Islam in a more moderate, tolerant, and modern way.”
In many ways, the Southeast Asian survey was more granular because it focused on Muslim consumer behaviour.
The poll put into perspective a decision in March by the Indonesian ministry of religious affairs headed by a prominent Nahdlatul Ulama figure to deprive the once-powerful Indonesian Ulema (Islamic scholars) Council of its de facto monopoly on halal certification by opening the sector to competition.
Halal certificates are big business. The Halal Product Assistance Agency issues the certificates based on a fatwa issued by the Council to companies in food, fashion, education, pharmaceuticals, cosmetics, tourism, media, travel, medical, health, art, culture, and finance.
The overwhelming majority of respondents in the Southeast Asia survey, 91 per cent, said whether a product was halal was very important in their decision to purchase. At the same time, 83 percent identified halal with certification by an Islamic body.
Sixty-one percent factor halal into their banking and investment preferences. Seventy-seven percent said the availability of halal facilities was important in their choice of travel destinations. Eighty-five per cent wanted a metaverse that caters specifically to Muslims, and 53 percent used prayer and Qur’an apps.
All in all, comparing the polls suggests that religion plays an increased role in people’s lives in the Muslim world beyond the Middle East.
In Southeast Asia, the survey underlines the importance of efforts by groups like Nahdlatul Ulama to promote a humanitarian interpretation of Islam that is tolerant, pluralistic, and respectful of human and minority rights.
In the Middle East, the surveys challenge autocratic leaders whose concept of moderate Islam is social reform needed to cater to youth aspirations, enable economic diversification, and provide religious legitimation of their absolute power as part of a strategy for regime survival.
As a result, Southeast Asia, rather than the Middle East, could emerge as the cradle of religious reform in the Muslim world.
Nahdlatul Ulama appears to believe it can achieve that if it convinces the likes of the Muslim World League that reform has to be genuine and holistic rather than self-serving. That’s an if with a capital I in a strategy that is as risky as it is bold.
The so-called Indonesia-South Korea Special Strategic Partnership
In several attempts, people can find out there are repetition phrases that informally appeared from 5 years ago until now related to South Korea-Indonesia relations, it is the label “special strategic partnership”. Initially it happened during South Korea’s former president, Moon Jae-in, official trip to Indonesia in 2017. Cited from Indonesia’s Foreign Ministry Press Briefing in Jakarta Globe site, the visit means to upgrade the bilateral relations level from strategic partnership into special strategic partnership, especially to accelerate industrialization in Indonesia.
The labels seem relevant as both governments agreed to continuing the discussion related to Indonesia-South Korea Comprehensive Economic Partnership Agreement (IK-CEPA) in 2018 that had been postponed in 2014 due to the shifting government. The agreement is likely to eliminate 95,54% post tariffs on the Korea side, while Indonesia does 92,06% post tariffs. Indonesia would get bigger market access in several sectors such as fisheries, agriculture, and other national industrial products, while South Korea is more accessible in several service sectors such as online game, construction, and healthcare service.
The agreement is barely ratified by Indonesia’s parliament at the end of August 2022 and the Parliament is also warning the executive branch to pay attention to keep the national interest & to be aware of the competitiveness in liberal market post-agreement since many countries are facing the post-pandemic recovery complex recently.
Besides the mentioned agreement, Indonesia and South Korea have several finished and ongoing strategic projects. Start with an ongoing joint-program on Boramae jet fighters in which Indonesia shares 20% and South Korea holds the rest of production cost. The program aims to reach mass production in 2027 and could have a competitive feature to US-made F-15, but likely less than the F-35 model. Besides that, South Korea is also involved in an Indonesia-owned submarine project for the 209/1400 type which is named KRI – Nagapasa 403 and KRI – Ardadedali 404, both respectively arrived in Indonesia in 2017 and 2018.
If the means of upgrading the relationship level to be a special one by holding the IK-CEPA, Boramae project, and other projects related to strategic necessity of the countries, then it seems Indonesia really has been treated as South Korea’s “Special Strategic Partner”. The mentioned projects aren’t covering all the government-to-government or business-to-business projects that can be classified to assert the upgraded relationship level such as Hyundai-LG investment on electric vehicle ecosystem in Karawang, West Java.
Is Indonesia the only one “Special Partner”?
To answer the question’s sub-headline, we may look back at the trade balance between South Korea and its several bilateral partners in southeast Asia, including Singapore, Vietnam, and Indonesia, for around 5 years. South Korea & Singapore had established the free trade agreement then put into force in 2006. The Korea’s import trade value from Singapore in 2006 is around $5,886,680,000 then in 2007 was risen around 16,5%, but 2017-2021 reports Singapore’s deficit trade with South Korea around $3,457,218,000 with Korea’s major deficit from importing parts of nuclear machinery & mechanical appliances.
Meanwhile, South Korea & Vietnam had signed similar agreements and were activated in 2015. Vietnam’s export values to Korea moderately rose from $9,804,831,000 in 2016 to $12,495,154,000 in 2017. However, as the same interval trade reports as Singapore, Vietnam is also facing deficit trade around $32,762,826,000. Meanwhile, South Korea itself faces big deficits in several of Vietnam’s competitive commodities such as articles of apparels & clothing, furniture, and fisheries commodities.
Now, let’s take a look at South Korea-Indonesia trade activity. As Indonesia just barely ratified the IK-CEPA in August 2022, it’s hard to set the significance of the IK-CEPA effect on both countries’ trade. However, Indonesia-South Korea trade performance benefited Indonesia for the interval 2017-2021 with Korea Custom Service noting the surplus for Indonesia is equivalent to $8,121,555,000. South Korea’s major deficits come from Indonesia’s prominent commodities such as mineral fuels & oils and other metal & mining products that are heavily demanded by Korea’s domestic industry.
Worth noting that even though the 3 mentioned countries may have their own bilateral economic agreement with South Korea, the countries are members of ASEAN and ASEAN itself has particular economic agreement under ASEAN-South Korea Free Trade Agreement (AK-FTA) which also benefited the 3 countries. In conclusion, the countries have so much leverage during trade with South Korea under several agreements.
Indonesia is relatively one of key partners for South Korea since both countries share a significant number of demands in particular industry commodities. However, South Korea’s trade volume with Indonesia isn’t as big as with Vietnam which shares 4.4% of Korea’s imports and 9.04% of Korea’s exports in 2020. Indonesia only shares 1.62% of Korea’s imports and 1.23% of Korea’s exports as OEC displayed. In conclusion, Indonesia moderately played a significant role for South Korea and recently both countries really upgraded their ties by holding many mutual projects, but we can’t be blind that Vietnam was way forward in captivating South Korea’s market as it reflected by the bilateral trade volume and one of the earlier Asian countries to established a bilateral trade agreement with South Korea.
Regardless of the “Special Strategic Partnership” label, Indonesia should seize the moment once the IK-CEPA applied in both countries by pushing diverse products to be exported, not merely relying on mineral & mining commodities. The government and Indonesia’s corporation must swiftly be aware of the Korean domestic market demands and its opportunities to make sure the IK-CEPA wouldn’t become boomerang which will hurt Indonesia’s domestic market since the market becomes more liberal & South Korea has a relative competitive advantage above Indonesia and its product highly demanded by huge number of Indonesians. The government can support the micro, small, and medium enterprises (MSMEs) to grasp the moment to export their product not only by providing them credit assistance but also information & legality aspects to fulfilled the necessity of exporters which somehow people aren’t aware of and facing complexity administration.
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