Ruth Dea Juwita, Jakarta – President Prabowo Subianto has emphasized that Indonesia's national transformation strategy must be rooted in "realism" as the country navigates escalating global conflicts and economic uncertainty, triggered by tariff policies under United States President Donald Trump.
"These real conditions cannot be dealt with through theories or imaginations," Prabowo said during a plenary cabinet meeting at the State Palace on Wednesday.
"Idealism is needed, but what will save us is realism. We must realistically assess the situation and take appropriate steps."
In his opening remarks, Prabowo said the escalating geopolitical and geo-economic turbulence had tested the transformation strategy he announced before taking office on Oct. 20 last year, a plan he reaffirmed was based on "real, factual conditions" at national, regional and global levels.
He further highlighted geo-economic uncertainty driven by rising protectionism, particularly the unilateral tariffs imposed by the US.
Prabowo praised his economic ministers and the National Economic Council (DEN) for conducting trade tariff negotiations with Washington since April with "composure".
"We've succeeded in negotiating without being emotional, without taking the bait and with full awareness of the major interests we must protect," the President said.
"The duty of the Indonesian government is to protect its people, the workers and their families. We've reached the best outcome possible for now, but we will not stop striving for better conditions for our economy and for the people," he emphasized.
Prabowo struck a trade pact with Trump following a phone call negotiation, resulting in lower US imposed tariffs on Indonesian exports from 32 percent to 19 percent.
Indonesia is among a handful of countries that reached a preliminary deal with Washington to reduce tariffs ahead of the initial Aug. 1 deadline.
Jakarta has committed to broad regulatory changes to secure the trade deal, according to a joint statement on the "framework" for the prospective agreement published on the White House website on July 22.
The deal includes purchasing US$34 billion worth of US goods and easing non-tariff barriers, including local content requirements for US firms.
In digital trade, Jakarta agreed to allow personal data transfers from Indonesia to the US and to eliminate tariffs on intangible products by recognizing the US as having "adequate" data protection.
Some had hoped the deal would tip the scales in Indonesia's favor, until it was later revealed that its regional peers Malaysia, Thailand, the Philippines and Cambodia received the same 19 percent rate.
Exporters in manufacturing powerhouse Vietnam, meanwhile, must contend with a slightly higher rate of 20 percent to access the US market.
That difference, however, was deemed "negligible" and "insignificant" in altering the region's trade landscape with the US, given Vietnam's capacity and efficiency, according to some economists.
On the geopolitical front, Prabowo said the world was "not as complex" as it is today, reflecting on his inauguration day. He added, "We are facing the impacts of wars and conflicts everywhere."
"Ukraine, the Middle East, [including] Gaza, the West Bank, Lebanon and Syria, have all seen victims fall before the eyes of the world: Women and children, tens of thousands of lives slaughtered. We also see the Israel-Iran conflict, in which major powers are now directly involved."