Mario Draghi, Prime Minister of Italy, passed the G20 Presidency’s honorary gavel to Indonesia’s president Joko Widodo, it marked the start of two crucial years of international influence for South East Asia’s largest country, during which time it will chair firstly the G20 (culminating in a summit in Bali on 15-16 November this year) and then, for the following year, the ASEAN group of nations.
The G20 leadership is a rotating “troika” of countries, comprising the preceding, current and following chairs, such that Indonesia is joined by Italy and, more importantly for ASEAN, next year’s president, India.
As the nations of South East Asia strive to rebuild, following the economic and social shock of the Covid-19 pandemic, and deal with the impact of other crises such as the war in Ukraine and unrest in Sri Lanka, it seems that Indonesia’s turn to preside over the G20 may have come at just the right time to promote the needs and agendas of lower-middle income economies like itself and India, as well as Cambodia, Myanmar, Vietnam and the Philippines, according to World Bank classification. Lower-middle income economies are the true face of ASEAN, accounting for 82% of its combined population of nearly 680 million.
Put it this way - in Indonesia, ASEAN has a suitable champion, and in this year’s G20 theme (“Recover Together, Recover Stronger”) an authentic rallying-cry.
Last October, the G20 finance ministers’ and central bank governors’ meeting reflected that “most emerging and developing countries will take many more years to recover” from the effects of the pandemic and have already suffered greater losses and economic scarring than advanced economies. Indonesia is particularly committed to strengthening diplomacy in the health sector, and is highlighting the wide gap between developed and developing countries in terms of Covid-19 vaccine access – a key issue for economic recovery and development.
Indonesia’s three priority issues during its G20 presidency are: the need for greater resilience and fairness in global health systems, digital transformation, and fair, affordable sustainable transitioning to clean energy. Indonesia is also keen to pursue structural and financial reforms, similar to those being promoted by Cambodia as chair of ASEAN this year - again, common ASEAN interests are coming to the fore.
Speaking in Davos address last year, President Jokowi welcomed foreign investments in six of Indonesia’s core sectors – including automotive (especially electric vehicles); export-oriented manufacturing, including healthcare; infrastructure; and renewable energy. Foreign direct investment, and the upgrading of production lines with leading-edge equipment and technologies, will be essential to Indonesia, as it strives towards greater prosperity, and entry into the World Bank’s “middle income” bracket - something that Jakarta hopes to achieve very soon.
Companies seeking to expand their business into Indonesia and the region can expect a growing domestic market, an improving investment climate, and a young, technically trained workforce. Growth figures from this year suggest that Indonesia is bouncing back from the shock of the pandemic.
These could well prove to be defining years for Indonesia, and for its ASEAN neighbours.
Melchers in Indonesia
Melchers operates through its local partner PT Melchers Melindo Indonesia, established in 1981 in Jakarta specifically to handle and develop Melchers operations, and the business of Melcher’s international client companies, in Indonesia. With offices in Jakarta and Surabaya, PT Melchers Melindo Indonesia is a strong partner for the distribution of a wide range of machinery products and after-sales service within Indonesia.
Initially, the company focused on the import of technical products from Europe, mainly machinery, project engineering and supply of industrial raw materials. It has now developed into an agile sales and service organization for a broad range of European equipment companies, and also has become a reliable sourcing, QC, and logistics base for overseas clients.
Established in 1806, and with more than 150 years of experience in East Asia, Melchers is trusted by many international brands and producers to be their “feet on the ground” in this region’s diverse markets, drawing on deep local networks and knowledge, and combining them with dynamic business services and trade infrastructure, to create powerful synergies that deliver results for your business.
Contact us: contact@melchers.de
#asiarevisited #Indonesia #G20 #ASEAN
