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Selasa, 30 Juli 2013

Beyond the boats lies the rising regional power of Indonesia

Beyond the boats lies
the rising regional power of Indonesia
Alan Oxley ;  The Principal of Public Policy Consultancy ITS Global
JAKARTA POST, 26 Juli 2013
  


There was bafflement in Jakarta about what Prime Minister Kevin Rudd intended when he suggested that the Coalition’s plan to turn back asylum-seeker boats might cause military conflict with Indonesia, raising the 1960s-era Konfrontasi campaign.

The confusion underlines how we will have to change the way we deal with Indonesia if we are to have an effective relationship.

Rudd’s link with the historical Konfrontasi – when Australia joined British and Malaysian troops to stop Indonesian military incursions into newly independent Malaysia — is not obvious.

But the mention will have an effect. Indonesian culture is heavy with double meanings and elliptical and indirect messaging. Some in the country are bound to draw convoluted conclusions about what Rudd, who visited Jakarta earlier this month, meant; perhaps even an indirect threat to enter Indonesian waters to return asylum boats.

Indonesia’s systems of governance do not support quick decisions on complicated matters. Authority is decentralised and has been for centuries. Indonesia has 34 provinces — three with more than 30 million people and six with more than 7 million.

Agreement with an Indonesian government to manage people-smugglers will require a long and protracted process of consultation. It should be led by a minister supported by a specific inter-agency body.

Any government which promises a quick solution with Indonesia on people-smuggling is simply asking for trouble.

We really didn’t need the Gillard government’s Asian Century Strategy to tell us China was a big and growing economy. It has been the giant of Asia for a millennium. But at least the exercise drew attention to the importance of Indonesia. The federal opposition says Indonesia will be their top diplomatic priority if they form government. They are right.

Indonesia is set to present Australia with an entirely new regional picture: a militarily powerful neighbour straddling important northern sea lanes. In 2011, Indonesia’s GDP was about US$860 billion; Australia’s about US$1.3 trillion.

If Indonesia’s economy continues to expand twice the rate of Australia’s (which has been the pattern of the past 20 years) Indonesia’s GDP will be bigger than Australia’s in two decades. It will have as much to spend on defence equipment as Australia does now.

To build a constructive and mutually beneficial relationship with Indonesia, two key things need to be understood. First, Indonesia has “big-country syndrome”. Second, we need to shape our policy of engagement around common interest, not what we think is best for Indonesia.

Any big nation with more than 200 million people thinks what happens at home is more important than what happens outside. And all large countries naturally think they are more important than smaller ones. Generally that’s true.

We should not believe Australia ranks highly in the consciousness of Indonesian people or government officials. For Indonesia, the ASEAN grouping, China, the US and Mecca rank more highly; Malaysia and Singapore figure when Indonesian maids and guest workers are maltreated there.

Nor should we think Indonesians have long memories. As Greg Moriarty, Australia’s ambassador in Jakarta pointed out to an Asia Link audience in Melbourne last year, Indonesia has a rapidly growing and young population. Australia cannot afford to assume that building government-to-government links, as important as they are, will be enough.

The reality is that government in Indonesia has less influence over what happens than in most countries, and certainly over the thinking of a young and rapidly growing population.

While Indonesia is now one of the world’s biggest democracies, rule of law is inconstant. There are Australian businessmen in Indonesia now under arrest because they fell foul of their business partners. This is the business environment. Success depends on getting along with business. It will be the same with diplomacy. Riding with the hiccups will be part of the process.

Australia has to base its relationship with Indonesia on common interest, not what has become the view among Western governments about how poorer countries should develop. OECD aid donors now direct aid to root out corruption, strengthen rule of law, improve human rights, improve gender balance, increase environmental protection and make societies more equal. But they don’t have large developing countries as neighbours. Yet these goals now also influence Australia’s aid agenda.

Some have called for Australia to cut its aid unless Jakarta collaborates in stopping the boats. Nothing could better demonstrate to Indonesians that aid is being used to advance Australian interests, not Indonesia’s people. The response, anyway, in Jakarta would be “as you wish”.

Indonesia has already had a taste of Australian trade policy being used for political ends. Following pressure from activists, live cattle exports were banned, and costly import barriers were imposed to prove that imported timber products from Indonesia and other developing countries were legal. 

Despite expert advice these measures would not work and cause resentment in Jakarta, Canberra let the activists have their way. There is no way we can work collaboratively on people-smuggling while that remains the case. ●

Rabu, 24 April 2013

Does the UK’s ‘Green Aid’ serve Indonesia’s interests?


Does the UK’s ‘Green Aid’ serve Indonesia’s interests?
Alan Oxley ; Chair of World Growth
JAKARTA POST, 23 April 2013

  
In 2011, the UK Government announced that it would end bilateral aid to Indonesia, with the exception of environmental programs to halt deforestation and to promote climate change remediation.

Just under 20 percent of Indonesians live on less than US$2 per day. Despite this, the UK decision concluded a decade-long decline in UK aid spending in Indonesia in areas such as health and humanitarian assistance.  At the same time, it mirrors a lamentable trend among Western donors to reduce spending on programs that promote economic growth.

By this action, the UK effectively denounced a formal commitment made in 2009, along with other donors, to align aid programs with Indonesian development goals. This was called “The Jakarta Commitment”. Fourteen donors pledged to support leading Indonesian priorities such as governance, education, health and the reduction of poverty.

But even by 2009, UK bilateral aid spending in Indonesia (around £10 million a year) had come to be dominated by two policy areas: illegal logging and low carbon development — particularly relating to deforestation.

A key British strategy was to take the lead in promoting an EU program in Indonesia on illegal logging.  The program encouraged and pressured — under threat of restricting trade — Indonesian authorities to comply with EU demands on timber exports under a bilateral agreement, and cease any further clearance of natural forest.

This was part of a larger EU campaign on global timber regulation across a number of countries for which the UK has been lead advocate.

But this relatively small UK bilateral program in Indonesia was set to deliver a much bigger result than most. The problem is that the impact is negative.

Economic modeling commissioned by the European Commission estimates that the Department of International Development (DFID) policy approach to illegal logging would have a detrimental impact on Indonesia’s forest sector. It indicated the economy could lose around $2.1 billion and around 450,000 jobs.

And in the case of the global campaign on illegal logging, not a single agreement is currently operational in the ten years since the EU committed to it.
That is not the end of it.

More than half of UK bilateral aid spending is being used to promote environmental strategies to make Indonesia a low carbon economy — particularly in relation to deforestation.

Development agencies and forest experts now generally recognize that that the leading driver of deforestation and forest degradation is not timber production — it is food production. Some estimates put agriculture’s share at close to 75 percent. It is also recognized that the majority of this is from clearing of forest land by subsistence and small-scale farmers.

The UK’s DFID’s own policy states that the UK must demonstrate that the “low carbon economy” model is viable. It has not done so.

Unsurprisingly, not a single investor has been found for a £10 million project designed to attract low-carbon investments in Indonesia.

Why would an agency that is supposed to reduce poverty spend money that damages economies?

The key motivation for DFID appears to be to advance the UK’s foreign policy goals rather than support development outcomes for Indonesia.

When UK Prime Minister David Cameron and Nick Clegg announced the reorientation of DFID spending in 2011, they declared that support for halting deforestation and tackling climate change would continue.

The UK has undertaken a concerted effort to make forest policy a key international issue since 1998.  Former UK prime minister Tony Blair put in on the G8 agenda.  DFID has made this a leading priority ever since, despite FAO statistics showing a steady decline in the rate of global deforestation.

DFID’s international efforts to promote action on greenhouse gas emissions focused on generating support for action by developing countries in the lead up to the 2007 Climate Change conference in Bali.

In 2006, a report by UK Treasury official, Lord Stern, argued developing countries would be worse off if they did not act quickly to substantially greenhouse gas emissions.

The report did not alter the thinking of major developing economies.  Development economists considered the report flawed, overstating the benefits and understating the costs of dramatic action to reduce emissions.

The UK appeared to focus on Indonesian policies in the same period. DFID spent almost £450,000 in the lead up to the 2007 UN climate conference. One report it supported claimed Indonesia was the third-highest emitter of greenhouse gases. The Indonesian government reported numbers to the UN showed clearly it was not, but the canard remains part of climate change lore.

DFID also supported building capacity for foreign campaign groups and NGOs to lobby it for policy action on climate change and forest protection. And in Indonesia, with other foreign donors, supported projects to demonstrate how Indonesia could replace productive industries that promote growth and create jobs with substitute low carbon emission activities, like tourism.

Its current projects in Papua appear to promote locally-based activism in the name of climate change against government resource development plans. In 2011, DFID Indonesia officials stated that they have “never treated development and environmental protection as being automatically in tension”.  It’s time they did.

DFID itself has acknowledged that climate change and deforestation are not priority areas for Indonesian society at large.

The question to DFID is whose interests its aid is serving?

The UK has used aid for years to advance its own national interests.  One long-standing goal was to reduce Britain’s trade deficit. DFID was originally established to remove aid policy from the dictates of other UK departments of state.  It seems those who set aid policy have fallen back to their old ways.

DFID should suspend all environmental and climate change related aid programs to Indonesia and commission an independent internal inquiry into the underlying costs and impact of such programs.