Publication in Economics, Politics and Public Policy in East Asia and the Pacific

Indonesia’s garment industry in crisis

Workers produce protective suits at a textile factory which usually produces jeans trousers before amid the spread of coronavirus disease (COVID-19) outbreak in Malang, Indonesia, 6 April 2020. (Photo: Reuters/Antara Foto/Ari Bowo Sucipto).

Authors: Deasy Pane, Bappenas and Donny Pasaribu, ANU

The COVID-19 pandemic is causing a slowdown in all parts of the world, but its impacts on exporters of textiles and textile products are hitting developing countries hard. The sector is one of the main exporters for many developing countries because its production process is generally labour-intensive and requires little formal training. The effects of the pandemic on the textile industry are especially concerning because the sector is a large source of employment in developing countries, including in Indonesia.

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IA-CEPA will not solve Indonesia’s FDI problem

Stacks of containers are seen at Tanjung Priok port amid the coronavirus disease (COVID-19) outbreak in Jakarta, Indonesia, 3 August 2020 (Photo: Reuters/Ajeng Dinar Ulfiana).

Authors: Krisna Gupta and Andree Surianta, ANU

The Indonesia–Australia Comprehensive Economic Partnership Agreement (IA-CEPA) came into effect on 5 July 2020. It is intended to facilitate less restrictive movement of goods, services and investment between the two countries. As attracting foreign direct investment (FDI) is a top priority for Indonesian President Joko ‘Jokowi’ Widodo, a freer flow of investment from Australia is certainly welcomed. But while IA-CEPA holds promise for trade, there are issues that will undermine its effectiveness in helping Indonesia attract increased FDI. Read more…

Incentivising Indonesia’s academics

Testing for bacteria believed to help reduce the chances of mosquitoes passing dengue and Zika to humans in a lab at Gadjah Mada University, Yogyakarta, Indonesia, 5 February 2016 (Photo: Reuters/Darren Whiteside).

Author: Muhammad Beni Saputra, UIN Sulthan Thaha Saifuddin Jambi

In his visit to Australia early in 2020 to ratify the Indonesia–Australia Comprehensive Economic Partnership Agreement (IA-CEPA), Indonesian President Joko ‘Jokowi’ Widodo announced that Australia’s Monash University will open a branch in Indonesia. The historic initiative is intended to improve Indonesia’s human capital — Jokowi’s top priority in his second term in office. But Indonesia’s university reform must centre around incentivising its own academics to publish better research.

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Indonesian investment in northern Australian agriculture

Cattle wait in an enclosure at a livestock export yard in Noonamah, about 50 km south of Darwin, Australia (Photo: Reuters/Tim Wimborne).

Author: Ashley Vines, University of Melbourne

Indonesia is Australia’s oldest trading partner, with Aboriginal people from northern Australia having traded goods and produce with Makassan people long before European settlement. But this long-standing trade connection remains underdeveloped given the size, complimentary economies and proximity of the two countries. This is particularly the case in the agricultural sector.

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Indonesia needs more than debts against COVID-19

A currency exchange service vendor wearing a protective face mask while waiting for consumers on the sidewalk in Bandung, Indonesia, 22 May, 2020 (Photo: Reuters/Agvi Firdaus).

Author: Rainer Heufers, Center for Indonesian Policy Studies

Governments around the world have been borrowing money during the COVID-19 crisis to fund programs to protect vulnerable citizens. Additional debt is deemed acceptable because problems are not directly related to unsound economic policies but to a pandemic beyond government control. Yet sound policies matter more than ever. Read more…

Missing pieces in Australia’s security strategy

The Indonesian Air Force's aerobatic team performs during celebrations marking the 70th anniversary of the Air Force at Halim Perdanakusuma air base in Jakarta, Indonesia, 9 April 2016 (Photo: Reuters/Beawiharta).

Author: Editorial Board, ANU

Australia’s official outlook on the strategic environment in its region has darkened. On 1 July, Prime Minister Scott Morrison launched the Department of Defence’s Strategic Update, which ‘sets out the challenges in Australia’s strategic environment and the implications for [d]efence planning’.

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Australia’s strategic appetite should take more account of Indonesia

Indonesian Air Force planes fly near the National Monument in Jakarta, Indonesia, 17 August 2016 (Photo: Reuters/Iqro Rinaldi).

Author: Evan A Laksmana, CSIS Indonesia

Australia launched its 2020 Defence Strategic Update this month to bring defence policy up to speed with the deteriorating strategic environment in the Indo-Pacific, marked by the rapid military modernisation in the region, sharpening US–China strategic competition, and the rise of ’grey-zone’ forms of assertiveness and coercion to achieve strategic goals without provoking conflict. Read more…

COVID-19 punishes Indonesian commodity exporters

A worker prepares to label barrels of oil at the state oil company Pertamina's production facility in Cilacap, Central Java, Indonesia, 6 November 2017 (Photo: Antara Foto/Rosa Panggabean via Reuters).

Authors: Donny Pasaribu and Krisna Gupta, ANU

Predictions of recessions in countries affected by COVID-19 no longer surprise anyone, but the outlook may be getting even worse for commodity-exporting countries. The World Bank forecasts that the economies of commodity-exporting developing countries will shrink by 4.8 per cent, a much sharper decline than other developing countries. This is important for Indonesia, where natural resources — especially oil, gas, coal and palm oil — have an outsized role in the economy.

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Protecting Indonesian seafarers’ rights on Chinese vessels

The Indonesian Navy vessel KRI Imam Bonjol (L) inspects the Chinese flagged fishing boat Han Tan Cou (R) in the waters near Natuna Islands, Riau Islands province, Indonesia, 17 June 2016 (Antara Foto/Handout/Indonesian Navy/ via Reuters).

Authors: Anisha Maulida, CSIS Indonesia and Bayu Arif Ramadhan, Brawijaya University

In May, a viral video allegedly showed a Chinese fishing crewman dumping the dead body of an Indonesian seafarer in waters near New Zealand. There have been four Indonesian deaths in six months linked to the same Chinese ship, the Long Xin 629. According to the ship’s captain, every crewman who dies from an infectious disease is buried at sea, despite contractual obligations to return the bodies to their home countries. Read more…

Gauging Indonesia’s interests in the South China Sea

Indonesian President Joko Widodo visits a military base at Natuna, Indonesia, near the South China Sea, 9 January 2020 (Photo: Reuters/Antara Foto).

Authors: Aristyo Rizka Darmawan and Arie Afriansyah, University of Indonesia

In June, four years after the Hague’s 2016 South China Sea tribunal ruling, Indonesia put forward a formal diplomatic note to the UN. This was in response to Malaysia’s 2019 continental shelf submission that objected to China’s maritime claims in the South China Sea, including the area bounded by China’s nine-dash line. It said that ‘Indonesia is not bound by any claims made in contravention to international law’.

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Implementing Indonesia’s COVID-19 stimulus

Indonesian airport officer conducted the disinfectant while 547 Indonesian workers arrived at Kualanamu international airport in North Sumatra province, Indonesia on 9 April, 2020 (Photo: Reuters/Aditya).

Author: Lili Yan Ing, ERIA and Yessi Vadila, Indonesian Ministry of Trade

COVID-19 is a wake-up call for the world. The pandemic has brought some of the worst economic impacts since World War II. While some Eastern countries seem much better prepared than their Western peers in terms of handling infections, testing and mitigating the pandemic’s economic impacts, the poorest countries will be hit hardest. Read more…

Indonesia’s PPE export ban backfires

Women are pictured wearing a protective face mask and face shield as the Indonesian government eases coronavirus restrictions in Jakarta, Indonesia, 8 June 2020 (Photo: Reuters/Ajeng Dinar Ulfiana).

Authors: Arianto Patunru and Krisna Gupta, ANU

By 16 June 2020, Indonesia had recorded 39,294 cases of COVID-19, second only to Singapore in Southeast Asia. Indonesia’s death toll tops the region with 2198 lives lost. The government has drawn a lot of criticism for its slow response to the pandemic — from the lack of testing to ineffective physical distancing measures. The fear of the infection spreading has also shaped economic policies, including trade.

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Asian economies positioned to ride out crisis

A currency exchange service vendor wearing a protective face mask while waiting for consumers on the sidewalk in Bandung, Indonesia, 22 May 2020. (Photo: Agvi Firdaus/INA Photo Agency/Sipa via Reuters).

Author: Brad Setser, Council on Foreign Relations

Social distancing has become the primary tool for protecting public health amid the coronavirus pandemic, and its inevitable impact on economic life has required governments to provide income and support to those who can no longer work, even as spending on public health rises. Nearly all governments globally are now running large fiscal deficits, and a sharp rise in the stock of public debt globally is expected. Asian countries, though, are well-suited to handle this increase in public debt — with some exceptions.

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Unmasking India and Indonesia’s COVID-19 challenges

Medical Officers collecting a swab sample for a polymerase chain reaction (PCR) test to detect COVID-19 coronavirus at Leuwipanjang Station, Bandung, West Java, Indonesia, 13 May 2020. (Photo: Reuters/Bukbisj Candra Ismeth Bey/Sipa USA).

Author: Raina MacIntyre, UNSW

COVID-19’s unprecedented health, economic, social and geopolitical impacts are still unfolding. It is often compared to the 1918 Spanish flu because both pandemics have similar fatality rates, but the world has become much more dependent on global supply chains, travel and trade. Read more…

Re-energising Indonesia’s electricity policy during COVID-19

State Electricity Company officials stand between solar cell panels at the largest solar power plant in Indonesia, at Oelpuah village in Kupang, 20 July 2017 (Photo: Reuters/Anatara Foto).

Author: Abidah B Setyowati, ANU

Major disruptions caused by the COVID-19 pandemic show how modern societies depend on access to electricity. With millions of people confined to their homes, distant modes of learning and working — as well as online streaming for entertainment — are now an everyday reality around the globe. Electricity is also critical to operating medical equipment to treat those badly infected with COVID-19. But the comfort of being able to work, learn and play from home should not be taken for granted.

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