Indonesia’s Analysts Have Doubts About Romney’s Many Promises

By webadmin on 10:50 am Sep 01, 2012
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Pitan Daslani

Prominent Indonesian political and economic analysts expressed doubt on Friday toward US presidential candidate Mitt Romney’s campaign promises to slice the US budget deficit and reduce the unemployment rate, saying that such lofty promises could backfire if he fails to deliver.

Senior economist Dradjat Wibowo said it is easy for Romney to promise to create 12 million new jobs and trim the unemployment rate from the current 8.3 percent level, “but the question is how would he do that?”

“I don’t feel confident with that promise, especially about slicing the budget deficit because even today, the US is experiencing an economic slowdown,” Dradjat said. “In such a situation, the budget deficit would become larger if they attempt to boost growth while slicing taxes.”

Dradjat did not address similar promises made by President Barack Obama four years ago, many of which have not been met. Such unfulfilled pledges have put him in a neck-and-neck campaign with Romney, Dradjat said.

The worst consequence as seen from Jakarta, he said, is that in order to correct the trade balance, the winner in the 2012 election would have to become protectionist in the sense that “they could impose non-tariff barriers in many hidden ways that we cannot detect.”

“This could come in the form of unnecessary certifications and verifications that would hamper Indonesia’s exports to the US,” Dradjat said.

Under Obama, relations between Indonesia and the United States reached a peak, with the United States resuming its military weapons sales to Southeast Asia’s largest economy.

Indonesia is currently the United States’ 28th largest trading partner, with $26.5 billion in total two-way goods in 2011.

Last week, the Obama administration said that it will sell air-to-ground missiles to arm the F-16s fighter jets that it has sold to Indonesia.

Historically Republican presidents have been good for business and trade, but because Obama has an emotional connection to Indonesia, where he lived as a child, it remains unclear whether Romney would be able to improve ties between the two nations, some analysts say.

Dradjat does not expect a Romney victory to reverse this and cause a decline in Indonesia’s exports.

But he said that if Romney, as president, could turn around the budget and trade deficits, America’s financial sector will grow even stronger to fuel the rest of the service sector. In turn, that would benefit countries like Indonesia that could host numerous multinational companies, Dradjat said.

Philips Vermonte, a Center for Strategic International Studies expert on US affairs, said that whoever wins the November election will need to focus on accelerating the pace of economic recovery as the focal point of US foreign policy.

He added that “over the past four years under Obama, we have seen Asean emerging on America’s radar, even though the US has yet to play a better role in our relations with China.”

Vermonte said that in the July’s Asean summit in Cambodia, “China flexed such a strong muscle to the extent it influenced Asean’s decision.” And yet, the United States did little to prevent that, he added.

The CSIS analyst also said that, on the other hand, should Romney win and “if that leads to America drawing itself closer to Israel, that could affect Washington-Jakarta relations.”

Vermonte cautioned that “the tone of bilateral relations will be affected,” because the Muslim majority in Indonesia “will feel uneasy” with strong US support for Israeli occupation of the Palestine.

If Obama retains his position, Indonesia’s relations with the United States will proceed at the same pace that the two countries have seen thus far, so no big surprises are to be expected, he said.