Devi Asmarani, Jakarta – Despite having opposed the United States' invasion of Iraq, Indonesia will probably not be among those countries that suffer trade punishment by the US, analysts here believe.
They say the US understands that support for the war by the world's largest Muslim nation, amid escalating anti-US sentiment, would have been tantamount to political suicide for the government of President Megawati Sukarnoputri. This would destabilise the country and possibly the region, where the US has strong interests.
Economist Umar Djuoro of the Habibie Centre think-tank said: "I think that the United States will tolerate Indonesia to a limit. As long as Indonesia does not do something to disrupt the stability of the region – such as giving room for the escalation of terrorism – the United States knows it cannot expect much from Indonesia because of our situation." And Indonesia kept its promise to safeguard US interests at the height of anti-American protests last month.
The much-anticipated protests proved to be more subdued than in other countries. The harsh anti-war and anti-US statements by Indonesian officials and politicians were directed largely at the domestic audience.
A political risk consultant said: "The US knows the psyche of Indonesian politics. They learnt it the hard way when three years ago their ambassador Robert Gelbard was talking tough to Indonesians, ending up alienating and angering the Indonesians. So now they treat Indonesia more delicately because they have such strong interests here." That is why Indonesia will get neither rewards nor punishments from the US.
Others believe the US offers of trade rewards for supporting its Iraq policy were not worth the risk to domestic support.
Economist Dradjat Wibowo of the Institute for Development Economic and Finance said: "I think that if Indonesia had supported the war on Iraq, the political and social cost to the country would be bigger than the possible reward from the United States. And even now, we hardly see any token of appreciation from the US for what Indonesia has done in the war against terrorism: the arrests of the Bali blast suspects, the trial of Abu Bakar Bashir. There's no reward of any kind despite all the kudos they have been giving us."
And any rewards, he said, probably would not have included the removal of some of the fundamental obstacles to Indonesian exports to the US.
The US is Indonesia's biggest export destination, especially for food products, forestry and textiles. Yet trade restrictions imposed by the US have limited access for Indonesian exporters and made them less competitive. These restrictions included the Bioterrorism Law and environmental laws on imports of products such as shrimp, said Mr Wibowo.
"There are a lot of regulations imposed by the US that are not conducive to our exports of biological products, food products and forestry," he said. "And I am not sure the US can give concessions to Indonesia on this because they have domestic politics to worry about." More attractive to Indonesia, he said, would be a reward in the form of a debt cut to help the country's fiscal sustainability, he said.
Mr Dradjat said a punishment on Indonesia by the US would be counterproductive because of US strategic interests. "The US should realise the limitation of Indonesia's domestic politics," he said.