The British Ambassador is himself a great product of multi-cultural Britain. He epitomises the modern world, bringing British expertise from his experience in Asia, Africa, and the Middle East. His very positive and proactive stance on Indonesia is very encouraging. In this insightful interview he updates us on the very important visit of President Jokowi to the UK.
One of the high points of the UK-RI relationship in recent years has to be President Joko Widodo’s visit to London last month. Can you tell us more about it?
The trip went very well. Prime Minister David Cameron invited the President on a reciprocal visit when he was here last July and the dates were agreed with the Palace. President Jokowi stayed in the UK for two days, including an almost two hours meeting with the Prime Minister, plus speeches to the combined Houses of Parliament and to the International Maritime Organisation and to a Business Forum with over 300 business leaders. There were lots of meetings between the delegation, and their British counterparts, including a “Round Table” with CEOs. The President also had several one-on-one meetings with CEOs, those either already involved in or considering investment in Indonesia. There was also a memorable visit to Fenwick Department Store in New Bond Street where, thanks to the assistance of the British Council, five Indonesian designers were displaying their work for the first time. The President was very excited since it reminded him of when he first broke through as a furniture manufacturer to display his products in Paris. He connected with their success, especially since they achieved weekly sales target in the first day.
There was a lot of talk about his interaction with the UK business world, and the “usual” signing of MOU’s and contracts during the visit. Was the impact good?
Yes. There were four MOU’s signed: one on Creative Industries, one on Higher Education, and implementation agreement on Maritime Industries, and a host-to-host Sports Cooperation agreement to assist Indonesia in its preparation to host the Asian Games. The President also visited Olympic Park to see how the accommodation has been designed and managed, for athletes then passed over to families, then visited the Velodrome since the Jakarta Velodrome will be built by British Companies. After meeting with NGO “Football for Peace”, the President met local children with heritage from Africa, Europe, and Asia and was much taken with “the modern face of Britain”. At the same time the delegation of ministers including the Coordinating Minister for the Economy, the Foreign Minister, the Trade Minister, the Finance Minister, the Minister of Maritime Affairs and Fisheries, and the Head of the Creative Economy, a full contingent, were also having meetings, as were two trade delegations, one of 70 people from Kadin, and one led by BritCham bringing people from Bandung and Surabaya on a country tour including Yorkshire and Sheffield. It was a very high impact visit but the journey still continues.
How has the visit positioned the UK as a partner for Indonesian progress? Are you now enjoying a new, higher relationship?
The trip was part of our effort to raise the profile of Indonesia in the UK, and continues with four festivals in London: one, Indonesia weekend on the South Bank (in May 2016) in front of the new mayor’s office, two days in Trafalgar Square in August, one at the University of London in October, and potentially another event in the Victoria & Albert Museum. There are also events showcasing Indonesia in Nottingham run by the Indonesian Students Associations. This is all good but my binding constraint is that we need a thicker pipeline of engagement: education is doing well, BritCham’s webinars are going well, the number of visas issued for UK visits in increasing but the level of engagement compared to Malaysia and Singapore is still small. We should be two or three times the current engagement level. Indonesia needs high quality skills to increase its capacity to do business and we have the universities and research facilities to help.
How is the current trade balance between the countries? Has the level of trade increased? In whose favour is the balance?
The 2015 UK Trade Data shows bilateral trade up 51% in 2015, with the balance of favour in Indonesia. But there is room to go much further. On the European part of the President’s trip, we agreed to start negotiating Comprehensive Economic Partnership Agreement (CEPA) which will remove barriers to trade between Indonesia and the EU. There is every indication that trade can grow dramatically creating jobs and economic growth. This will take at least two years to complete but the President directed the Minister of Trade to prioritize the EU deal.
In terms of direct investment, what new projects or companies from the UK have been happening in Indonesia? Have the recent economic stimulation “packages” helped to make Indonesia a more attractive prospect for UK investment?
The trip itself generated USD 19 Billion in deals with the UK focused on investment and trade; the lion’s share of the whole European trip including Germany, Holland, and Belgium which generated USD 21 Billion in all. A recent Britcham/Eurocham survey showed that CEO’s of UK/EU companies have good levels of confidence in Indonesia. There has been a broad welcome for the reform packages and a strong desire to see them implemented. The President is very clear: he wants to build an “open and competitive” economy. On the World Bank “Ease of Doing Business” Ranking, he wants Indonesia to get to number 40 from the current position of 109. That’s why the packages are interesting: the ministries need to work with political leaders to overcome vested interests blocking their path. It’s urgent for Indonesia’s growth to go to 6% plus to meet job creation targets and living standards.
On the environmental front, the UK has been at the forefront of ethical forestry, for example. Can you bring us up to date on this?
The big success has been the achievement of the SVLK certification system which ensures legality in the timber trade. This has taken 10-15 years to achieve but it is an Indonesian certification system recognized by the EU. It will make Indonesia a world leader in wood products, potentially generating 200% growth in the industry in the next few years. I recently visited Jepara. 67,000 people work in the wood industry there. A 200% increase means more jobs, rising incomes, and fewer trees cut down illegally. This is a huge success for Indonesia, the UK, and Europe.
The question is, can we pull off the same approach with palm oil creating a palm oil standard and gaining access to world markets?
Of course there is still a lot to do; the rate of deforestation is still too high, there’s still “haze” there’s the problem of land use and spatial planning, and the fact that Indonesia is the 5th largest emitter of greenhouse gasses. So the SVLK is a brilliant success but not the end of the journey.
What is UK’s position on the security situation in Indonesia after the recent Jakarta bombing? Are tourists still encouraged to come?
There are still concerns, it hasn’t gone away but of course there are risks of terrorist attacks all across the world: Europe and Asia, it is one of the challenges of our time. But Indonesia has a strong track record on tolerance: 500 to 800 Indonesians are estimated to have gone to join Daesh-ISIS out of 250 million people, whereas UK has more from its 2-3 million Muslim population. Indonesia is head and shoulders above others in dealing with extremism, so we need to find out how can we learn from them, and get them to share their experience.
What have you been personally focused on? Please share your highs and lows over the last 12 months?
Indonesia, along with India and China, will be a country that shapes the 21st century. A big theme for me is to find ways to encourage Indonesia to be more open and more internationally active. Along with size and potential comes responsibility, and international problems cannot be solved by the west alone, so the big countries need to come forward and take responsibility. At the Paris climate change talks, Indonesia was much more progressive than people expected. In London the President’s stance on tolerance was also much stronger than expected. Indonesia’s ambitions on rising up the WB “Ease of Doing Business” Rankings are also much more ambitious than expected. In Brussels the President said he hoped the UK will stay in Europe; showing a readiness to take a position on a major international issue as a G20 leader. Indonesia is still learning and testing what its position in the world should be. Given our future, bilaterally and multilaterally, depends on our relationship with the big Asian countries, we really need to be an active partner to help Indonesia achieve its potential politically and economically. My motto remains: “bekerja bersama, berhasil bersama”.