Marchio Irfan Gorbiano, Jakarta – Indonesia's diplomatic missions overseas should focus heavily on economic diplomacy, President Joko "Jokowi" Widodo instructed on Thursday, with the primary aim of increasing trade and investment flows between Southeast Asia's largest economy and its partner countries.
This shift in foreign policy priorities would fall in line with the government's overarching goal of swinging Indonesia's current account and trade balance positions into the green, Jokowi said in a speech to more than 120 Indonesian envoys.
"We all should focus on economic diplomacy. I want that 70 to 80 percent of what [resources] we have [in our overseas missions] to focus on that because that is what our country needs," he said at the State Palace, underscoring the diplomatic corps' task of becoming "investment ambassadors" who must lure in more investors.
"Our goal is to reverse the current account and trade balance into surpluses. Once we post a current account surplus, that is when we are truly independent because then we truly won't be dependent on anyone financially and economically."
Jokowi called on the chiefs of mission to attract more investors, particularly those who showed interest in investing in industry sectors that have high import contents, such as the petrochemical or oil and gas sectors. He also asked them to attract investors who would dole out funds for the downstream natural resource sectors to help diversify Indonesia's exports portfolio.
"Exporting raw materials, such as coal and CPO [crude palm oil] is already out of fashion. We want our export products to be in the form of semi-processed or finished products," he said.
Increasing investments in the downstream natural resource sectors would also make the trade balance become more resilient from outside pressures, the President said, citing the recent example of the state biodiesel policy as a way to absorb increased CPO production amidst an ongoing spat with the European Union over one of the country's main export commodities.
Indonesia is still on course to continue the negative trend in its trade balance that started in 2018, when a decline in exports, partly caused by the trade war between the United States and China, contributed to a US$8.6 billion trade deficit, the largest in 44 years.
Throughout 2019, Jakarta rolled out several policies to court investments, particularly for the production of goods that substitute imported raw materials for export-oriented companies. (tjs)