PRESIDENT Prabowo Subianto says he seeks to maximise what Indonesia can gain from its membership in multilateral organisations, such as the Organisation for Economic Co-operation and Development (OECD) and the BRICS group of emerging economies.
During the final hours of a work visit to the United States, Prabowo told reporters there was “no problem” in joining both the OECD and BRICS, an acronym derived from founding countries Brazil, Russia, India and China and early member South Africa.
“Yes, we are joining several groups. For our economy, we want to look for the best opportunities. We have to think about the welfare of our people, right?” Prabowo said on Wednesday in Washington, DC.
He said Indonesia was also looking into joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a free trade agreement between 11 countries including Australia and four Asean member states, and the Indo-Pacific Economic Framework for Prosperity (IPEF), launched by President Joe Biden two years ago.
Both the CPTPP and the IPEF are perceived as efforts to curtail China’s influence in the Asia-Pacific. Indonesia has entertained the idea of joining the OECD since 2022, and the organisation kicked off the country’s accession process earlier this year. BRICS founding member Brazil also seeks to join the OECD.
Given that most of its member countries are developed economies, the OECD is sometimes referred to as the “rich countries’ club”. BRICS represents the interests of the so-called Global South of low- and middle-income countries. As such, this grouping is said to be a counterweight to the Group of Seven (G7) major high-income economies.
However, the high-income United Arab Emirates joined BRICS on Jan 1, alongside Egypt, Ethiopia and Iran. Some portray the grouping as a geopolitical challenger to the West, particularly because of China and Russia’s influence as founding members.
Indonesia maintains close trade and investment ties with China and has not followed Western countries in their frontal opposition to Russia, as it pursues good relations with every country in line with its “free and active” foreign policy stance.
Former president Joko “Jokowi” Widodo expressed an interest in joining BRICS on several occasions but ended up refraining from submitting a formal application until he stepped down in October.
Meanwhile, President Prabowo decided that Indonesia should join BRICS mere days after his inauguration last month, dispatching newly-installed Foreign Minister Sugiono to the grouping’s 16th summit in Kazan, Russia.
Indonesia is currently a BRICS partner country and not a full member, a status that also applies to 12 other countries including fellow Asean states Malaysia, Vietnam and Thailand.
The President has repeatedly underlined his intention to befriend both China and the US, and that Indonesia would not join any military bloc.
Indonesia’s OECD accession was on the agenda for Prabowo’s meeting with Biden on Tuesday.
“President Biden expressed his support for Indonesia’s efforts towards an expedited accession bid to the OECD,” says a joint statement released on Tuesday.
“The two leaders also expressed their commitment to a rules-based international trading system and recognised the importance of multilateral institutions and norms which promote free and fair trade,” it states.
The statement also notes that Jakarta and Washington “are continuing to closely and concretely collaborate on the Just Energy Transition Partnership [JETP].”
The JETP aims to reduce the carbon footprint in the energy sector of several emerging economies, but hashing out the details of the deal for Indonesia has proven hard.
The JETP Indonesia includes a US$10bil pledge in grants and concessional loans from multilateral development banks as well as the International Partners Group (IPG), led by the US and Japan. The remaining US$10bil is to come from investments by private financial institutions through the Glasgow Financial Alliance for Net Zero (GFANZ).
Indonesia has been pushing its JETP sponsors to be more generous. To date, grants account for less than US$300mil of the pledged amount, and around half of that accrued fund is earmarked for technical assistance instead of actual projects. — The Jakarta Post/ANN
