Indonesia will continue to open its market to international market
Trade Minister Thomas Lembong cited the bravery and determination demonstrated by Indonesians in facing last week’s terror attacks in Jakarta as evidence of the nation’s high self-confidence in taking on any global challenge, including with regard to the economy.
In his speech at the Indonesia Lunch Dialogue during the World Economic Forum’s Annual Meeting here on Thursday, the minister said the international community was deeply impressed with the way the government had defeated the terrorists and with the maturity of the people in responding to the brutal terrorists’ assaults.
The handling of the terror attack has even created a positive image for the nation, and it is crucial in boosting international market confidence in Indonesia, the world’s most-populous Muslim nation.
“Our response [to the terrorists] was not military, we did not panic. We even booed the terrorists. The world sympathizes with Indonesia. We should build on that,” the minister told global business leaders, scholars and government officials.
“We are not just the most-populous Muslim nation in the world, but also moderate and tolerant. And what is also very important, Islam in Indonesia is very modern,” Thomas added.
The minister said Indonesia was ready to open itself to the international market, because that was the only way, no matter how painful it would be, to win global trade. In the past, Indonesia was protective and tended to close its door to the world market, because it was much dependent on resources-based industries.
The rapid growth of e-commerce is a new model of international trade. The government has no choice but to readjust itself to the new trend by changing obsolete regulations and laws to match current economic trends.
“We can no longer handle e-commerce with 20th-century regulations. We must use the 21st [century’s] regime of regulations,” he said.
The background of President Joko “Jokowi” Widodo and Vice President Jusuf Kalla as businessmen and the presence of technocrats and professionals in the Cabinet played a crucial role in the decision to fully open Indonesia’s economy.
“This is an era of competition, so we can no longer hide behind protection or waste money on subsidies. We should have the courage to compete,” the minister said.
Thomas pointed out, however, that the government would not be reckless in its economic policies and would always take into account domestic challenges.
Before addresing the audience, Thomas briefed a group of Indonesian journalists on the goals the government wanted to achieve in Davos.
Finance Minister Bambang Brodjonegoro joined his Cabinet colleague at the forum. Coordinating Political, Legal and Security Affairs Minister Luhut Pandjaitan, however, cancelled his scheduled appearance in Davos.
When asked about the political risks of the liberalization program, the trade minister responded, “Other countries will treat us like we treat them. If we are serious about [increasing] our exports and opening other markets, we should also open ourselves to them. If we close our market, they will do the same.”
“In the past we could do it, because the prices of commodities were high. We did not need to open markets for our shoes, garments and jewelry. Now we have to transform our exports, as we can no longer just rely on our coal and oil palms,” the minister noted.
To support his argument on the open market policy, Thomas pointed out the President’s decision to significantly reduce fuel and electricity subsidies. The President chose to implement unpopular policies, because he firmly believed it was the only way to keep the economy healthy. The government has also achieved progress on infrastructure despite budget restrictions from the House of Representatives.
The minister mentioned agriculture, the creative economy and services as the country’s promising sectors for the future. “We are very strong in the service sector,” said Thomas.
On Thursday evening, the Trade Ministry was to host Indonesia Night with the support of several private companies and state-owned Bank Mandiri.