The trade war between the United States of America and China has influenced global economic growth, including in Indonesia. Because the US and China are the two main trade partners for Indonesia, Indonesia is currently thinking of ways to overcome the effects of this trade war and create national strategies to minimize risks, optimize benefits, maintain regional stability and increase exports.
Before the trade war began, Indonesia had benefited from an open trading system and Indonesia was known for its activities in multilateral forums to achieve common goals globally. When the trade war occurs at this time where economic growth in Indonesia is indirectly affected, Indonesia expects more cooperation and collaboration as the best choice for Indonesia and other countries because this can have a positive impact on trade and investment, and for expanding the business capacity of all countries.
To discuss this matter, AmCham Indonesia and APINDO (Indonesian Employers Association) held the workshop that discussed about “US and Indonesia Business Perspective - Gaining and Sustaining Competitive Advantage” on 20th of August 2019.
Dr. Ir. Kasan Muhri, MM, the Head of the Trade Research and Development Agency of the Ministry of Trade of the Republic of Indonesia said that the impact of the trade war will not directly affect Indonesia, but Indonesia still needs winning and superior economic growth for both Indonesia and the US. This is all because the US is a strategic economic partner for Indonesia and Indonesia has not become an economic king like Singapore.
"I believe that Indonesia can catch up in the field of economic development when the trade war is happening right now. From my experience, what always happens in the field of trade between Indonesia and the US is that the US always provides material to Indonesia, and Indonesia provides the final product to the US. This gives confidence that there is always a balanced solution between the two countries,” said Kasan.
Kasan believes that trade war can be an opportunity for Indonesia to get different benefits because he believes that trade process can always move from one country to another.
Another speaker, Zelda Wulan Kartika, the Director for America at the Ministry of Foreign Affairs of the Republic of Indonesia said that some common effects of the trade war for Indonesia that might occur in the future would be a decrease in investment in Indonesia due to uncertainty in the global economy and there would be disruption to the value of export-import in Indonesia due to the imposition of unilateral trade tariffs by the US.
The trade war between the US and China is a call to "wake up" for the Indonesian Government and Indonesian businessmen, and this is also a good opportunity for Indonesia to grow its economy into a bigger one.
"Because Indonesia places trade war as a bilateral problem that only occurs between the US and China, this can make Indonesia focus more on positive economic ways to grow and this is also a momentum to advance Indonesia's regulatory framework and trade competitiveness. The current trade war is taken as a greater opportunity for Indonesia to open more market areas, increase Indonesia's exports to the US, increase bilateral trade volume, and many other positive things for both countries,” said Zelda.
The Indonesian Government has taken several steps to anticipate the effects of the trade war, such as the Roundtable Meeting on Building Synergy in the Textile and Cotton Sector where Indonesia cooperates with US Cotton Council International, Indonesia conducts series of activities to the US to meet stakeholders in the government and industry sectors from September to October 2019, and the Directorate of Foreign Affairs in America works together with the Indonesian Embassy in Washington DC to hold the Main US Regional Business Forum in October 2019.
Dr. Hariyadi B. Sukamdani from Sahid Group and Chairman of APINDO added that the real problems occurring in business activities in Indonesia usually come from business people in Indonesia themselves and the Government of Indonesia, and this is a problem that needs to be fixed before worrying about the trade war.
"Note: Photo by Tom Fisk from Pexels at: https://www.pexels.com/photo/aerial-photography-of-city-buildings-2398969/ ."
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