Indonesian Economic Challenges in 2015

Indonesia is an emerging country that have many potentials to compete in the

international market. Indonesia does have many resources, natural resources is one of

them. Indonesia have many natural resources, but crude natural resources does not have

high value in the market, the resource must be process and become goods. Does Indonesia

have this? No Indonesia not yet reach this level of development. Is this Indonesian only

challenges in the development of the business and economic? The answer is no. There are

more problem that Indonesian will face to overcome the obstacle that block the development

of this country. So what Indonesia’s challenges in 2015 economic? The answer will be

discussed in this resume.

First we will talk about what does the most significant challenge that Indonesia will

overcome in 2015. In my opinion, after reading books and several news, the challenge is the

upcoming Asean Economic Community. It is the most important challenge right now. We

might be thinking is it AEC will hurt Indonesia’s economic. We don’t need to think anymore,

because no doubt that AEC will hurt Indonesia’s economic if Indonesia can’t compete in the

situation. The situation that Indonesia’s will face are:

a single market and production base,

a highly competitive economic region,

a region of equitable economic development.

a region fully integrated into the global economy.

The AEC is an unquestionable inevitability, and more alarmingly, an inevitability

absolutely none of the many hundreds of millions of Southeast Asian citizens have asked

for, voted for, or have any direct say in regards to. So inevitable is AEC’s unfurling in 2015

that few have even bothered to ask “why?” “For what?” and “by whom?”

If AEC’s premise as described by ASEAN itself sounds really similar to the European

Union (EU), that’s because it is the same. It is not only driven by the same immense global

spanning corporate-financier special interests that consolidated Europe’s economies,

currencies, and institutions, but for the very same goal of collectively looting the region if and

when it is successfully consolidated.

The EU now struggling in debt, endless proxy wars fought on behalf of Wall Street and

London, and socioeconomic strife caused by EU regulations ruled upon people against their

will. While it was always difficult for citizens of respective European nations to have their

voice truly represented within the halls of their own respective national governments, it is

more difficult still for the EU’s lead the elite assembled in Brussels to be held accountable

and made to actually work for the European people.

Instead, the EU serves the immense corporate-financier interests that cobbled this

supranational consolidation together in the first place. The European people were not

allowed to vote on entering into the EU, and those that did repeatedly voted against it until

threats, economic extortion, and propaganda finally succeeded in overcoming resistance. In

Southeast Asia, nothing of the sort has even been proposed, and most Southeast Asians are

oblivious to what ASEAN and the AEC even represent. Like the International Monetary

Fund’s (IMF) incursion into Asia during the late 1990’s, it won’t be until catastrophic failure

has already swallowed the whole of Southeast Asia that people begin to realize what has

been grown upon them.

Southeast Asia are already being affected by many FTAs and now the other form of it is

rising This FTAs allow local markets to be flooded by cheap foreign goods. Socioeconomic

disparity, even across Southeast Asia and greater Asia itself can devastate communities and

industries already just barely making do. Special interests driven to ink FTAs generally make

no provisions to prepare local markets about to be devastated, and no provisions after FTAs

take demonstrable tolls. For example we can take from our neighbor Asean country,

Thailand, which had FTAs inked by ousted Thai Prime Minister Thaksin Shinawatra with

China, devastated their local farmers when cheaper Chinese produce flooded Thai markets.

Some farmers including those who grew garlic, were driven almost entirely out of business.

That is just how cruel a FTA can be, and yet another type of it will rise in the shades of AEC.

AEC will absolutely multiply this by creating similar conditions across all industries

and between all of ASEAN’s members nevertheless it is in the small or big scale. Additionally, the AEC then seeks to integrate ASEAN into the greater “global economy,” or in

other words, FTAs with the US and EU. Industries just emerging in each respective ASEAN

member state will be utterly crushed, bought out, or overrun by foreign corporate-financier

monopolies. For local business laboring under the delusions that somehow there is a place

around the “global elite’s” table for them, the current state of the EU should serve as a

cautionary reminder that indeed, no there is not.

In conclusion AEC might exploit the people and the resources of the Southeast Asia

region, but the people cannot even argue about it. Many outsiders that support the AEC is

the one who talking about democracy and human rights, for example America, but the truth

is AEC might just kill the democracy and human rights in an instant.

For this reason, whether one is a conservative nationalist or a liberal democrat, the

idea of an AEC forced upon the people without their input, consent, or even expressed

desire for such a system should be appalling and surely protested against. However, many

must already know that such protests would be futile. But this futility itself only further

exposes the unwarranted influence and power that truly drives the AEC’s undemocratic and

intolerable implementation.

Instead, it will be up to groups within each respective ASEAN member, and up to

each community within to expose, boycott, and replace with local alternatives both the

national and multinational special interests involved. While such a campaign will be difficult,

the only other choice is to do nothing and suffer the same indignation, socioeconomic decay,

and perpetual war the EU now suffers. The people of Southeast Asia have many

advantages including the advantage of time on their side to mitigate a repeat of the EU’s

slow-motion collapse, but it is only an advantage if people begin acting now.

Indonesia will also face all of those condition. The question remain is Indonesia

ready to face these situations? We will see it ourselves in several years, but by judging in the

current situation that happens in Indonesia, this will be the hardest challenge and Indonesia

might not make it. Our country were always weak to confront the outsiders power especially

the financial company which always rule in our regulation and politics. But Indonesia must

realize and confront it now or it might be suffer more miserable condition than our last

recession. The way Indonesia must confront it is towards the policy that can save the local

industry and local economic, but we will talk about it later in the next topic

The second challenge that Indonesia will face in 2015 is global economic slowdown

that happening recently. We must consider this is a challenge because we know that

Indonesia is part of global economic that also actively working in the global market, which

means if there something affect global economic it will affect Indonesia economic too. What

is global economic slowdown? Who is the source? What is the effect? We will discuss this

question on this part.

Global economic slowdown is an event that happens because there are several

event that was lead the global economic being held from growing. The event usually

happens in the country which lead the global market. It was usually when the leading

country economic is failing and it starts to affect the global market. When the economic is

keep failing then the global economic will also slowdown, unless the global market and

economic find a way not to depend on the market leading country.

The reasons of global economic slowdown that happens in 2015 are Oil price that

suddenly drop and the China’s economic slowdown that happen in this first quarter of 2015. This kind of things also affect Indonesia because Indonesia is also do oil tycon and actively

conduct cooperation with China. So Indonesia must acknowledge this event as a challenge.

The oil price will affect the price of Indonesia consumer goods, but Indonesia have

already increase the price before it suddlenly drop. It means there will be an escalated price

but it will be hard to see a falling price of the goods and services. Indonesia also into the oil

production, even it is not really significant industry but it will affect this industry too.

The China economic slowdown affect our economic because Indonesia usually have

ten percent average export to china. The slowdown can make the export rate to china is

also droping or china subtitute the export to another country which more affordable for them

to improve their economic growth.

Evaluation of Indonesia investment and trade policy

We are talking about evaluation of Indonesia policy in trade and investment, but

before do that we must sum up what the base of these policy to be made.National Trade

Policies is made because several reasons. In addition to focusing on the needs of particular

industries, governments may also implement broad policies designed to consider the needs

of the economy and society as a whole. These broad national policies are then followed by

specific industry policies.

There are many trade startegist in the world. We will tak about to know what

strategy Indonesia is into. In many countries, the focus of broad national policies is

economic development. Some countries that depend on a single export commodity will

attempt to diversify their economies to minimize risk.

Some countries will follow an export-promotion strategy as a means of achieving

higher levels of economic development. An export-promotion strategy encourages a

country's businesses to compete in foreign markets by capitalizing on a particular advantage

the country possesses. There are also import-substitution strategy encourages the growth of

domestic manufacturing industries through the erection of high barriers to imported goods.

This policy was used by Australia, Argentina, India, and Brazil after World War II.The export-

promotion strategy has been more successful at stimulating economic development than the

import-substitution strategy.Industrial policy is used by a government to promote the

competitiveness of key products and industries with high growth prospects in international

markets. The policies are formulated based on the needs of the national economy. Indonesia in my opinion is rather an user of export promotion strategy because right now

Indonesia is trying to compete in foreign markets by capitalizing on a particular advantage ,

which is we can make cheaper goods with same quality.

Critics of industrial policy argue that such programs may not improve the global

competitiveness of a country since bureaucrats cannot perfectly identify the right industries

to favor. Critics further suggest that political clout, rather than potential international

competitiveness, may play a role in determining which industries are selected.Governments

struggle to identify what the role of government should be in a market economy. The text

notes, for example, that while the Reagan and Bush administrations believed that

government’s role in the economy should be limited, and thus did not formally adopt an

industrial policy, the Clinton administration believed that the government should play a much

larger role, and consequently selected five key areas to receive increased federal support.

Public choice analysis suggests that special interest will often dominate the general

interest on any given issue because special interest groups are willing to work harder for the

passage of laws favorable to their interests than the general public is willing to work for the

defeat of laws unfavorable to their interests.

Since 2007 up until now Indonesia has made steady economic development with an

averagae annual real GDP growth rate of 5.9%. The GDP per capita is almost doubled into

$3500 and the poverty rate declined to 12.4%.

Since its previous review in 2007, Indonesia has made steady economic progress

with an average annual real GDP growth rate of 5.9%. GDP per capita almost doubled to

almost $3,500 and the poverty incidence declined from a post-crisis peak of 24% to 12.4%

in 2011. These and other solid fundamentals provided good underlying support in the face of

the 2008-09 global recession. Looking ahead, the government's 2011 Master Plan for the

Acceleration and Expansion of Economic Development 2011-2025 recognizes that higher

and sustainable economic expansion requires that the country diversify sources of growth,

accelerate infrastructure development and close the development gap between eastern and

western regions. Real GDP has been forecast by the World Bank to grow by 6.1% in 2012,

rising slightly to 6.3% in 2013, assuming continued strong consumption and investment

growth, supported by a recovery in exports. 

Indonesia has taken steps to improve its business environment, which is reflected in

improvements in its rankings in various global indicators. In addition to positive assessments

of Indonesia's macroeconomic climate and FDI regime, some notable reforms include the

launch of the Indonesia National Single Window to facilitate online processing of trade and

licensing activities and the development of initiatives to improve governance. 

State-owned enterprises (SOEs) continue to play a key role in Indonesia's economy,

estimated to account for around 40% of Indonesia's GDP. There has not been any

significant privatization activity over the review period. However, the government has

partially divested itself of some of its ownership shares in various industries, including:

cement, telecommunications, mining, energy, pharmaceuticals, construction, highways,

steel, manufacturing, airlines and banks. An SOE monopoly on the importation of alcoholic

beverages was terminated in 2010. 

Trade remains limited as a share of economic output, with merchandise exports accounting

for between 21% and 26% of GDP during the review period and imports for between 15%

and 18.5% of GDP. Indonesia continues to trade more energy-related products (fuels) than

any other product category on both the import and export sides. A number of measures -

including export restrictions and taxes on raw resources, tighter import licensing

requirements, point of entry restrictions on imports, ownership limitations on banks and

certain divestment requirements for foreign mining companies - have recently raised

concerns about the direction of trade and investment policy-making. In this regard, the

authorities consider that domestic industrial policy considerations, aimed, inter alia, at

developing local industries and moving up the value chain, should be balanced with

maintaining an open foreign trade and investment regime in order to ensure that Indonesia's

external commitments continue to be fully respected. 

Indonesia provides at least MFN treatment to all WTO Members. In order to improve trade

and investment policies, Indonesia has enacted new laws relating, inter alia, to investment,

its SPS regime, export financing, special economic zones as well as in agriculture, fisheries,

shipping, mineral and coal mining and tourism. Indonesia is continuing to strengthen its

economic ties with countries in the region, both bilaterally and through its participation in

ASEAN. Under ASEAN, which is working towards achieving an ASEAN Community by

2015, new goods and investment agreements have recently entered into force. 

Indonesia's medium-term trade policy objectives are to increase the export of non-oil

products, strengthen the domestic market and manage the availability of basic products; and

to strengthen national distribution channels. To this end, it has identified ten priority products

of key interest in its trade negotiations. Its economic priorities may also be understood within

the context of various development plans, which aim to increase the competitiveness of

Indonesia's businesses and encourage a shift into higher value-added activities. Central to

this is the economic development of six regional economic corridors, each with industrial

clusters focusing on priority sectors. These corridors would be connected through an

enhanced transport and ICT infrastructure, which is currently poor. The realisation of these

objectives will be dependent to a considerable extent on private investment. 

There have been significant legal and institutional changes to Indonesia's foreign investment

regime. A new foreign investment law was enacted in 2007 which represents an

improvement to previous rules by doing away, for example, with maximum timeframes for

investment in permitted sectors and has provisions on national treatment for foreign

investors as well as access to international arbitration. Investment restrictions, including

limits to foreign equity participation, are set out in a comprehensive "negative list" which has

been revised and liberalised over the review period. Foreign ownership is restricted in a

number of sectors which include agriculture, forestry and fisheries; energy-related activities;

communications and financial services and health services. Overall, the 2007 Investment

law offers greater transparency in terms of the sectors covered and a reduction in

administrative burdens. 

Indonesia has continued to undertake systematic efforts to reduce constraints to trade,

investment and production and to streamline procedures at the border. Customs reform is

prominent on the government's agenda. This includes the 2007 launch of Indonesia's

National Single Window, which allows for the online processing of customs documentation,

applications for licences, and duty payments. It is now operational at all of Indonesia's ten

main customs entry points, through which an estimated 90% of trade enters and leaves

Indonesia. Efforts are also being undertaken to improve risk management and facilitate

trade by introducing schemes for reputable importers. The goal of customs reform is to

reduce the time and cost of clearing customs and to limit smuggling and customs fraud. The

authorities have observed a significant drop in customs-related appeals as a result of

guidelines issued to assist customs officers to determine the customs value of imported

goods. On the other hand, import procedures tend to be complicated by registration

requirements, port of entry restrictions for several products, and extensive pre-shipment

inspection and import licensing requirements. 

The tariff has remained Indonesia's main trade policy instrument, albeit a relatively small

source of tax revenue. Indonesia's revenues from taxes on international trade constitute

around 4% of total tax revenues, which is considerably lower than the average for

developing countries. Nearly half of Indonesia's trade taxes are levied on exports, mainly

commodities, the main policy objectives being price stabilization, development of

downstream processing facilities and reducing the rate of depletion in non-renewable

resources.  

The Ministry of Finance concluded a five-year tariff harmonization programme in 2010, which

has resulted in the lowering of Indonesia's simple average MFN tariff to 7.8% in 2012, down

from 9.5% in 2006. The average applied MFN tariff is 7.5% for industrial products and 9.5%

for agricultural imports. More than 85% of tariff rates are currently in the range of zero to

10%. In line with long-standing sectoral support, the highest tariffs apply mainly to motor

vehicles. As has been the case in previous reviews, 95% of tariff lines are bound but at

37.4% the average bound rate largely exceeds the average applied rate, creating a degree

of unpredictability for the tariff. The difference between average applied and bound rates

remains much higher for agricultural products (at 9.5% and 47.1% respectively). With the

exception of a few tariff lines subject to specific rates, virtually all applied tariff rates are ad

valorem, a feature that contributes to the transparency of the tariff. Tariff preferences offered

by Indonesia through bilateral and ASEAN FTAs have resulted in significant tariff reductions,

ranging from 0.8% to 5.9%, thus widening the gap with its MFN tariff rate. In addition to the

tariff, Indonesia levies VAT at a flat rate of 10%, luxury taxes which range from 10% to 75%

and excise taxes on alcohol and tobacco products; for alcoholic beverages with an alcohol

content of 5% or more excise tax rates on imports are higher than on domestic production. 

Around 20% of Indonesia's tariff lines are affected by import licensing requirements, which

have been expanded since Indonesia's previous review. Many are in place to implement

policies designed to protect domestic production, such as rice, sugar, salt, certain textiles

and textile products, cloves, animals and animal products and horticultural products. Various

concerns have been raised by WTO Members with regard to the complexity, lack of

transparency and trade-impairing effects of Indonesia's import licensing requirements. 

In 2011 Indonesia enacted new rules governing anti-dumping, countervailing and safeguard

measures, with the main changes intended to reinforce investigation procedures as well as

to bring the regulation of trade remedies under one piece of legislation. Relevant institutional

restructuring is in progress. Indonesia has not so far initiated a countervailing investigation.

At end-2012, it had 18 definitive anti-dumping measures in force. Since 2010 Indonesia's

use of safeguard actions has increased significantly, making it the WTO's second most

frequent user of this instrument.  

National standards are formulated in accordance with international standards, where

feasible. Indonesia has a transparent approach to the formulation of standards and technical

regulations, which allows for the participation of interested members of the public. During

the review period, new SPS-related legislation has entered into force relating to animal

husbandry and animal health and to horticulture. All imported meat and dairy products must

be accompanied by a halal certificate issued by an approved halal certifying body. Regulations to implement horticultural legislation have tightened up import quarantine

procedures to prevent the spread of fruit fly, which imits the ports of entry into Indonesia for

imports from countries that do not have recognised food safety systems.  

Public procurement in Indonesia is undertaken by numerous entities at the central and

regional levels of government as well as by state owned enterprises. Indonesia became an

observer to the WTO Government Procurement Agreement (GPA) in 2012. Government

procurement remains an important instrument of industrial policy. Foreign companies may

only bid in co-operation with a national company (unless no national company has the ability

to provide the goods and services requested) and only on bids that exceed certain

thresholds. Procurement rules mandate the use of domestic products in government

procurement if there are providers offering goods and services with a local content

exceeding 40% of value. Since 2007, transparency in procurement has been improved with

the introduction of mandatory e-procurement for public tenders. New procurement

regulations require each procuring entity to implement stronger management controls and

also set out contracting procedures and timeframes. However, in spite of these reforms, bid-

rigging remains a major problem and accounts for around 70% of the Competition

Commission's caseload, pointing to the need for a comprehensive procurement law and

strengthened audit procedures. Indonesia's competition policy framework has not

undergone any significant change in the period under review. 

Support for production and trade has been provided through a variety of incentives for

domestic and foreign investors. These include: corporate tax relief and exemptions; fuel

subsidies; customs duty exemptions; as well as various incentives related to free trade

zones and special economic zones. Indonesia currently has one FTZ in operation. The

Government enacted a Special Economic Zones (SEZ) Law in 2009 to encourage the

development of SEZs as centres of economic activity situated in strategic positions and

encompassing export processing zones, bonded zones, industrial zones, technology parks,

and supporting activities. Two SEZs are currently being developed. 

Indonesia has export licensing, prohibitions and restrictions in place to ensure protection of

natural resources and endangered species, provide an adequate domestic supply of

essential products, promote higher-value-added downstream industries, and upgrade the

quality of export products. In addition, the government will prohibit mining companies from

exporting mineral ore products (currently subject to export licensing and taxes) as of 2014,

when they will be required to undertake refining activities onshore. During the review period,

new export taxes have been introduced on leather and wood, palm oil, raw cocoa and

mineral ore products. The main objective of these measures is to encourage value-added

processing within Indonesia. Secondary considerations are to secure domestic supply,

safeguard the environment and raise revenue. 

In 2009 the state-owned Bank Ekspor Indonesia, which had provided pre-shipment and post-

shipment financing facilities for exporters was transformed under new legislation into the

Indonesia Eximbank. It provides exporting financing, guarantees and insurance in areas not

entered into by commercial financial institutions, with enterprises in the areas of crude palm

oil, textiles, oil and gas, and mining being among its main clients. Another state-owned

enterprise, Asuransi Expor Indonesia offers export credit insurance to exporters for all

products other than oil and gas.  

A net importer of IP-intensive goods, Indonesia has sought to strengthen protection of

intellectual property rights by improving its legal framework. Indonesia is at an advanced

stage in drafting amendments to legislation concerning copyright, trademarks, patents and

industrial designs. Over the review period Indonesia has used compulsory licensing on two

occasions to permit Government use of pharmaceutical patents in order to produce certain

antiviral and antiretroviral drugs: in all instances Government use of these patents is until

their expiry. IPR infringements, particularly with respect to copyright, remain of concern to

Indonesia's trading partners and Indonesia is making efforts to combat IPR violations

through inter alia import licensing requirements and upgraded monitoring and investigation

efforts.

How Government Should use International Cooperation

When nations cooperate, they do so on a voluntary basis and are able to abandon

agreements at will. Global governance, which is understood here as the institutionalisation

of IC, in the ideal case implies regulations aiming to solve global problems through

agreement enforcement and accountability of the actors involved. The most established

definition of cooperation in academic literature is the one by Robert Keohane (1984).

Keohane assumes a conflictive policy situation at the outset of each cooperative agreement. Policy adjustments are then negotiated to bring agreements more in line with each actor’s

preferences. Once both policies become more compatible, the act of cooperation is

completed. But does this definition adequately describe IC across all fields? Also, does it

describe IC in the 21st century? There is evidence that it does not. The actual meaning of

the Latin cooperatio—joint operation—does not require a conflictive policy situation at the

outset. Neither does it require a policy adjustment to the preferences of other actors. For a

joint operation, it is sufficient that two or more actors operate together using shared

resources. Keohane´s definition, written primarily for security issues during the Cold War, no

longer seems appropriate for the wide range of IC in the 21st century. Due to its limitations,

for this essay IC is redefined as follows: Cooperation occurs when two or more actors are

involved in a joint operation with shared resources. This endeavour can be repeated

whenever there is a commitment of all actors. The initial purpose of cooperation can

transform throughout time, but it can also not lead to anything, or result in the complete

opposite intended (cp. Anderson 1999). In some cases, it can trigger new agreements

between governments, which may lead to change in international political relations.

The perspective of holism, the ability to go beyond the simple view of oneself,

understanding the unit as a part of the whole, provides an explanation for this

enlightenment. National governments will want to participate in “steering the boat” of

international politics, without neglecting their self-interest in a leak-less boat because they

necessarily will always be passengers. Therefore, at some point, nations will be ready to

give up a part of their sovereignty to participate in this navigation, submitting themselves to

the resultant enforcement and accountability, thereby enhancing IC and constructing global

governance. This is by no means a linear or automatic process. Examples such as the

integration of the European Union demonstrate that what may seem at the beginning a

utopian illusion (a single currency for all countries) can become real in the end. Even though

the current debt crisis reveals drawbacks of the monetary union, a collapse of the whole

system is unlikely; instead of exclusive national policies further political integration

constitutes a tangible solution. Another example of this non-linear process is cooperation on

climate change. Whilst there have been several steps back on the ladder of IC on

environmental issues, such as the refusal of the United States (the world’s top CO2

producer) to sign the Kyoto Protocol,(10) the achievement of committing 191 countries to the

mandates of the agreement itself is remarkable. These examples portray the trial-and-error

nature of constructing global governance, in which the experiment of IC constitutes a

stepping-stone to a world government.

Indonesia will also face the utopian illusion condition even not in one currency but, in

diffrent aspects it is simillar to EU. It is called AEC, and Indonesia must make a agood

choice of action to make this cooperation become the advantage, not disadvantage not only

for the sake of economic but also the sake of people prosperity. It means Indonesia must

make a suitable cooperation with our current sittuation with another country to make

Indonesia have advantages in this. Even EU is a bad example of this kind of international

cooperation but at least Indonesia now can learn from what EU fault. Indonesia dont need to

be affraid about AEC, but Indonesia must take advantages of by carefully use it and adapt to

Indonesia’s condition.

Indonesia government is already have many policy towards international

coorperation. This policy must use to make advantage in Indonesian economic. With a

population of almost 200 million people on 13,667 islands, Indonesia is the world's largest

archipelago located between the continents of Asia and Australia, and between the Pacific

and the Indian Oceans. Only 35% of the population live in urban areas, but there are more

than thirty cities with 100,000+ population. Plus, five cities have a population of over one

million. Indonesia should consider that government must use international cooperation to

improve this kind of situation.This means Indonesia should consider the international

cooperation more to the non- urban situation or any necessary means to improve the

condition of Indonesia that suitabale in this condition.

Engaged in creating, improving and managing a production base for irrigation

facilities, improving the securing and usage of agricultural production materials such as

seeds and fertilizer, and cooperation that looks at the whole value chain including

processing, distribution and sales, and it is deploying assistance with the objective of

improving the capacity to provide a stable supply of food is one of kind cooperation need to

do because Indonesia really need to improve the agriculture industry and all that kind of

agricultural improvement by using international cooperation is seriously needed.

The development of agricultural technologies based on sustainable management of

environment and natural are necessarily needed in Indonesia because Indonesia is one of

the country that gettiing paid to reserver our environtment. It is need to be done not only

because Indonesia is paid to do that, but also for the continuation of the whole world and the

global warming event that recently become and importan issue. Technology development

for increased productivity and stable production of agricultural products in the tropics

environments; technology development for income and livelihood improvement of the rural

population in developing regions; and collection, analysis and dissemination of information

for understanding trends in international agriculture, forestry and fisheries is also seriously

needed in Indonesia. Cause this one of Indonesia advantages, and Indonesia must realize

to use this.

Indonesia does not need another new International cooperation in importing food

supply because actually Indonesia have a lot of resources to make sufficient food stock but

Indonesia never realized to develop it. If Indonesia make antoher import cooperation then it

is just the same that Indonesia make new gap in economic development that will slow down

the progress.

The need for international cooperation in fisheries management in Indonesia is also

really needed because Indonesia not yet optimize this kind of industry sector.It is also driven

by the highly migratory nature of many of the targeted and bycatch species and the

exploitation of common resources outside areas of national jurisdiction, on the high seas. The sea of Indonesia is also recieve the sama exploitation as the forest, and it must be

solved as soon as posisible. International cooperation is the right answer of this. We can

cooperate with another nation that have a better fisheries industry and get a lesson from

them.

Regional fisheries management organizations (RFMOs) play a critical role in the

global system of fisheries governance. They are the primary way to achieve cooperation

among fishing nations, which is essential for the conservation and effective management of

tuna and tuna-like stocks that cross national boundaries. Through these organizations, the

International Fisheries Division aims to promote international cooperation to achieve

effective and responsible marine stewardship and ensure sustainable fisheries management

globally. Domestic management is guided by our efforts and participation in these regional

fisheries management organizations. Indonesia need to joint this kind of cooperation or

organization, or at least have a cooperation with one of the member of this organization or

any simillar organization that have better management in fisheries.

The Agreement between the Government of Australia and the Government of the

Republic of Indonesia Relating to Cooperation in Fisheries (1992 Fisheries Cooperation

Agreement) provides the framework for fisheries and marine cooperation between Australia

and Indonesia, and facilitates information exchange on research, management and

technological developments, complementary management of shared stocks, training and

technical exchanges, aquaculture development, trade promotion and cooperation to deter

illegal fishing. Cooperation under the Agreement today takes place under the auspices of

the Working Group on Marine Affairs and Fisheries.

Established in 2001, the Working Group on Marine Affairs and Fisheries is the

primary bilateral forum to enhance collaboration across the spectrum of marine and fisheries

issues relevant to the areas of the Arafura and Timor seas. The Working Group brings

together the fisheries, environment and scientific research portfolios and agencies from both

countries. DAFF takes the lead for Australia and the Ministry of Marine Affairs and

Fisheries for Indonesia. The Working Group meets annually.

In 2010 the Working Group agreed to:

Continue work on developing and implementing measures to deter and reduce illegal

fishing activity

Enhance fisheries management, conservation and research (including in the area

known as the MOU Box, see below)

Continue training and capacity development programs

Continue developing seafood quarantine and safety processes, and

Consider mechanisms to further enhance cooperation on marine environmental

issues.

A major initiative under the Working Group is the joint conduct of the Public

Information Campaign in eastern Indonesia delivering information to coastal fishing

communities about the serious impacts of illegal fishing and the consequences fishers face if

caught fishing illegally in Australian waters.

Indonesia - Australia Fisheries Cooperation is one of the example of the cooperation

needed by Indonesia, but Indonesia need more suitable cooperation, because up untill know

Indonesia still not yet optimize the fisheries even with the help of Australia. It means

Indonesia need more help or need an expert help.

In recent years, Indonesia has done well in domestic-focused manufacturing but has

lost its edge in manufacturing for export. It means Indonesia also need to improve the

manufacturing industry so it can be more competitive in global markets. Indonesia has come

a long way since the 1997-1998 Asian financial crisis and has shown a capacity for

managing the many shocks that have confronted it since. It even came through the 2008

global financial crisis relatively well. Moreover, the sharp depreciation in the rupiah last year

has been partly reversed as the nation’s external accounts have improved, allowing foreign

reserves to surge once again. Nevertheless, manufacturing has been held back by a few

major structural problems.

First, Indonesia’s infrastructure development remains poor,a common complaint

among private investors ,due to under-investment. Then, Indonesia suffers from widespread

corruption, as shown in the annual perception index of the Berlin-based Transparency

International. Third, its labor legislation needs to be made more flexible, as Indonesia

currently provides overly generous provisions for employment-termination and faces

frequent labor strikes. Furthermore, there is a problem of structural unemployment where

there is a mismatch of labor skills to the available jobs.

All these issues translate into Indonesia’s underperformance in the competitiveness

rankings. A lack of competitiveness means losing vital export business and becoming less

attractive for foreign direct investment (FDI), both of which are needed to revitalize the

manufacturing sector. In the World Economic Forum Competitiveness Index, Indonesia is

ranked 38th compared to Singapore’s second place and Malaysia’s 24th. Furthermore, in

the World Bank Doing Business Indicator, Indonesia is ranked in 120th place compared to

Singapore’s first-place ranking and Malaysia in sixth place.

In the early 1980s, Indonesia accounted for more then 24 percent of ASEAN’s total

exports and almost 6 percent of Asia’s exports, on average. However, in recent years, its

share has fallen by more than half, to about 12 percent and 3 percent, respectively. While

Indonesia’s manufacturing sector has stagnated, countries like Vietnam have industrialized

rapidly, catching up or even overtaking Indonesia. Furthermore, Indonesia’s ability to attract

FDI has diminished. Once commanding an average of 21 percent of Asia’s FDI between

1971 and 1980, its share dwindled to an average of 1 percent over the past 10 years. Its

failure to attract FDI is a major setback, as FDI is vital to jump-starting Indonesia’s economy,

climbing up the value chain and improving competitiveness.

Partly as a result of the lack of manufacturing-sector growth, real GDP growth

continues to underperform its pre-1997 rates, when Indonesia was lauded as an “Asian

Tiger” and vast numbers of Indonesians were lifted out of poverty. This has had a direct

impact on the welfare of the common citizen. Furthermore, real gross national income (GNI)

per capita is still very low compared to that of Indonesia’s neighbors, which indicates the

country still has much catching up to do. While its poverty rate has improved since 1990, it

still sits at 10 percent and is higher than the poverty rate in Vietnam. According to the UN

Human Development Index, Indonesia is ranked 121st, far below the median, behind

countries such as Thailand, the Philippines and China. If Indonesia fixes its structural

problems, it could realize its growth potential and achieve much more than it has to date.

This means Indonesia is also need international cooperation to improve this

manufacturing industry. International cooperation can help Indonesia optimize this sector

and make Indonesia manufacturing industry once again compete in the global market. Importing goods and technology may be help for today’s economy for Indonesia, but

Indonesia must realize that it can never relying on other countries technology and goods to

survive. Indonesia cannot remain as a consumer forever, and must step forward to become

the producer also. In making international cooperation to develop this industry, Indonesia

will make more inovative technology and good. It means once again Indonesia can compete

in the producer market

After considering about how government should use the international coopertaion,

we can conclude one thing. That thing is the need of an international cooperation in

developing most potential industries such as agricultute, fisheries, and manufacture. By

developing this industries, Indonesia can once again compete in the global market and AEC

wont be a nightmare for Indonesia. When these industries is developed, another sector of

industries will also growing. It is because of the economic will grow from the support of the

developed industries, and by the growth of the economic other industries will also grow

simultaneously.