Starting From a ‘Firm Handshake,’ India and Indonesia Build Successful Partnerships

By webadmin on 11:07 am Jul 05, 2012
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Shoeb K. Zainuddin

In March this year, some 72 companies representing a broad swath of the Indian economy participated in the India Show in Jakarta as part of a new push to add dynamism to relations between Asia’s two largest democracies.

The show was an unqualified success and heralded a new age in relations between the two nations. On the agenda were issues such as accelerating trade and investment and enhancing people-to-people ties so as to bring the countries closer together.

Indonesia and India have much in common. Both are large nations with diverse cultures and fast expanding economies. Both also share similar challenges to upgrade infrastructure and deal with rising urbanization. The two countries are also members of the G-20.

But as Gurjit Singh, India’s new ambassador to Indonesia, noted in an interview with the Jakarta Globe, both sides could do more to forge a new partnership that would elevate both nations on the world stage.

“Recently we put out a YouTube video from the embassy with the title ‘Old Heritage, New Partnership,’ ” he said. “We have an age-old partnership, good political engagement and an established framework of cooperation, but the idea is how do we maximize this for mutual benefit?”

He added that the fact that Indonesia is a democracy, a market economy and is doing well in the world gives it the character of a bigger opportunity for developing a partnership.

“India today wants to develop this partnership and make it more dynamic and diverse,” he said. “In that there is no limitation in any area.”

The two sides already have frequent diplomatic and political exchanges but Singh aims to boost economic ties as one of his top priorities. He wants to make India a partner of choice for Indonesia, so it is not just what India wants but also what Indonesia needs, which will contribute to a successful partnership.

“In our mind, an expanded economic engagement is high on the priority list,” he said. “This does not only include trade but investment, participation in infrastructure development, developing Indonesia’s natural resources with value additions for the development of the whole country itself.”

Although trade between the two countries has been growing at a steady pace — it is well on the way to achieving a target of $25 billion by 2015 — investments have not kept pace.

“I would be much happier if I had $25 billion of investment but I think trade will grow by itself,” Singh said. “We already have large Indian investments in Indonesia, which are in excess of $10 billion, and I think this will grow rapidly.”

This is one area he is taking a personal interest in because he believes that bringing in investments leads to far more substantive cooperation and benefits than just boosting trade. For this reason, he wants to encourage Indian industrialists to build power plants, steel plants and smelters for processing minerals, as well as putting up manufacturing plants.

“We are confident that Indian FDIs will become an important player in Indonesia,” he said. “We are also looking at the various economic corridors to see if we can aggregate something by putting in greater diversity, which will also help in diversifying more Indonesian exports away from commodities.”

There is, therefore, a shifting of gears from having large trade to having large investments.

The career diplomat, who has had postings in Africa, Japan and Italy, has been pleasantly surprised by Jakarta’s modern skyline and its metropolitan makeup.

“To be honest, when I first came here, I was a bit surprised at how modern Jakarta was,” he said. “I knew it was modern but perhaps it was beyond my initial expectation so obviously there has been a big boom here.”

He has, therefore, had to reorient his thinking in that he was dealing not just with any country but a country and a people in full bloom. “When you are blooming, there are many bees hovering around the flower, so the challenge for me would be how I am not just one bee and I need to make a hive.”

He has also been impressed with the vibrancy of the local press, which he said is critical to his understanding the country. “You see fairly open debate on many issues, cogent editorials and open-minded op-ed pages,” he said. “This level of open-minded debate and discussion helps my understanding of this country.”

The other big surprise for him was discovering how young Indonesia’s population is and in this regard it is very much like India. More than 30 percent of Indonesians are under 35 years of age, a fact that changes the dynamics of engagement and offers huge opportunities for foreign and domestic investors.

Given the country’s youthful population, Singh said he hoped to visit universities across the country to engage directly with the youth and to look for opportunities to form deeper cooperation with Indian universities.

“I want to reach out to the people of Indonesia at all levels,” he said. With so much diplomatic and economic activity between the two countries, he added, it is a good time for an Indian ambassador to be posted to Indonesia.

“India finds that when we shake Indonesian hands, we have a firm handshake,” he said. “That is coming from a very long heritage of good relations, which are now becoming a very successful partnerships.”