Gift behind Obama's Cancellation Visit to Indonesia This Month

(News Today) - President Obama's decision this week to delay yet again his state visit to Indonesia provoked regret in both capitals. But there's a silver lining in the delay: the gift of time to devise a serious framework for partnership that the two leaders can then launch when they eventually do meet.

Most of Mr. Obama's first term has been spent on domestic policy, with much of the remainder of his time devoted to the broader Middle East and Russia. Asia policy has taken a back seat.

Secretary of State Hillary Clinton and her chief Asia deputy, Kurt Campbell, are the most visible members of Mr. Obama's foreign-policy team in Asia-Pacific. But they, too, have been engaged with problems with North Korea and China. Indonesia, now arguably the most important country and economy in Southeast Asia, has been largely ignored.

This is a strategic mistake on the part of Washington. Indonesia, a nation of 243 million, is the world's most populous Muslim-majority state, the world's 16th-largest economy and a natural U.S. security partner. It sits next to the Malacca Strait and astride the Lombok Strait -- most of Asia's energy and other trade with Europe and the Middle East flow through these two bodies of water. Its democracy is now more stable than many of its neighbors.

President Susilo Bambang Yudhoyono's administration has made great strides tackling terrorism and corruption. Indonesia is one of the world's few Muslim-majority states that protects the rights of non-Muslims, including large numbers of Christians and Hindus.

That being said, Jakarta still faces big challenges. Economic growth, which is projected to reach 6% this year, is good but insufficient to create the number of jobs necessary to employ the large number of young Indonesians who will be joining the workforce in coming years. Nearly 30% of the country is below the age of 15.

Corruption remains a big problem. In any Muslim state with pockets of radical and violent elements, there is always the risk that social strife or factors that call into question the benefits of modernity can suddenly provide a ripe recruiting ground for Islamists. Preventing this is a key U.S. interest, and is one of many reasons to seek a deeper alliance.

The U.S. and Indonesia could derive mutual benefit from three areas of cooperation. First, the U.S. could help Jakarta build a larger middle class by enabling more free enterprise.

Small- and medium-sized businesses employ most people in developed economies and are the key to building a middle class and a stable country. But in Indonesia, these businesses face a scarcity of growth capital and those that can access debt commonly must pay interest rates of 14% or more.

Beginning to remedy this could be as simple as sending a positive signal to investors that hurdles faced by private-equity providers and other capital sources will be addressed. The Overseas Private Investment Corporation could work with the Indonesian finance ministry to resolve regulatory and legal issues, or partially insure funds invested. Government does not have to provide capital for private use, but can create mechanisms to facilitate its flow.

Second, both governments can take immediate steps to increase trade. The U.S. could start by repealing nontariff barriers to trade created via the 2008 farm bill, which amended the Lacey Act of 1900.

These include forestry certifications that are protectionism masquerading as environmentalism. American consumers pay higher prices as a result, and the estimated 40 million Indonesians who rely on forests for their livelihoods suffer.

Trade can also be enhanced by enlisting the U.S. Coast Guard to aid Indonesia in developing a similar maritime security force out of its existing marine police. Eliminating piracy and further securing the nation's ports against smuggling and terrorist threats would cut transportation and insurance costs and ease security-related restrictions placed on Indonesian trade by some countries.

Third, the two governments could deepen military cooperation to counter the growing threat from China and other regional dangers. Rather than pursue traditional military bases in Indonesia, the U.S. could seek to build standby facilities with prepositioned equipment for use in a crisis.

This light footprint approach to basing would reverse the long-term decline of U.S. presence in Southeast Asia that followed the loss and removal of bases in Vietnam and the Philippines. It would also telegraph to U.S. allies and adversaries that the stabilizing presence of American forces is there to stay.

The U.S. could also develop a combined Indonesia-Singapore-U.S. military command for managing security in the Strait of Malacca. Securing this sea lane is imperative to collective defense and trade, yet it may be contested by China's growing navy.

Developing this framework would complement a presidential trip that can be expected to include much positive imagery with a set of real accomplishments. In addition to invoking the past, where a young Mr. Obama attended Jakarta's Basuki School, and celebrating the present, where crowds of Indonesians welcome America's first black president, the trip could also accomplish something deeply meaningful for the future.

Source : kompas.com

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