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DOI: http://dx.doi.org/10.21686/2410-7395-2021-3-93-112
УКРЕПЛЕНИЕ ТОРГОВО-ЭКОНОМИЧЕСКИХ ОТНОШЕНИЙ ИНДОНЕЗИИ И РОССИИ: УСИЛИЯ ИНДОНЕЗИИ ПО ВЫХОДУ НА РЫНОК ЕВРАЗИИ
Хендра Манурунг, Теуку Резасях, Арри Бейнус,
Русади Кантаправира
Университет Паджаджарана, Бандунг, Западная Ява, Индонезия
В статье рассматривается экономическое сотрудничество между Индонезией и Россией, а также возможность выхода Индонезии на рынок Евразии. Индонезия признана крупнейшей экономикой Ассоциации государств Юго-Восточной Азии (АСЕАН) и лидером стран Юго-Восточной Азии с высокими темпами экономического роста. Ожидается, что рост региональной экономики будет поддерживать глобальную экономическую стабильность. Россия является нетрадиционным рынком для основных товаров Индонезии в Евразийском регионе, поэтому индонезийские товары на российских рынках и в супермаркетах можно встретить довольно редко. В связи с этим важно понимать, какие индонезийские экспортные товары интересны россиянам и как эти товары могут попасть в Россию. Для этого необходимо изучить бизнес-потенциал партнеров, с которыми можно начать совместно работать. С 2016 г. Индонезия подчеркивает важность сотрудничества и торгово-экономической интеграции в Азиатско-Тихоокеанском регионе, Евразии и Юго-Восточной Азии. В разгар глобальной пандемии необходимо развивать дипломатию и экономическое сотрудничество между Индонезией и Россией, чтобы предотвратить потенциальные конфликты в Южно-Китайском море с участием США и Китая. Вместе с тем Индонезия должна развивать экономику и торговлю посредством двустороннего и многостороннего сотрудничества в международных организациях. Исследование показало, что экономическое сотрудничество обеих стран должно способствовать укреплению торговых отношений, увеличению инвестиций и повышению конкурентоспособности экспортной продукции Индонезии. Ключевые слова: экономика и торговля, сотрудничество, Евразия.
STRENGTHENING INDONESIA-RUSSIA TRADE ECONOMY RELATIONS: INDONESIA'S EFFORT TO ACCESS EURASIA MARKET
Hendra Manurung,Teuku Rezasyah, Arry Bainus,
Rusadi Kantaprawira
Padjadjaran University, Bandung, West Java, Indonesia
The article discusses economic cooperation between Indonesia and Russia, as well as the possibility of Indonesia entering the Eurasian market. Indonesia is recognized as the largest economy of the Association of Southeast Asian Nations (ASEAN) and the leader of Southeast Asian countries with
high rates of economic growth. The growth of the regional economy is expected to support global economic stability. Russia is an unconventional market for Indonesia's main goods in the Eurasian region, so Indonesian goods can be found quite rarely on Russian markets and in supermarkets. In this regard, it is important to understand which Indonesian export goods are of interest to Russians and how these goods can fall into Russia. To do this, it is necessary to study the business potential of partners with whom you can start working together. Since 2016, Indonesia has been emphasizing the importance of cooperation and trade and economic integration in the Asia-Pacific region, Eurasia and Southeast Asia. In the midst of a global pandemic, it is necessary to develop diplomacy and economic cooperation between Indonesia and Russia in order to prevent potential conflicts in the South China Sea involving the United States and China. At the same time, Indonesia should develop its economy and trade through bilateral and multilateral cooperation in international organizations. The study showed that economic cooperation between the two countries should contribute to strengthening trade relations, increasing investment and increasing the competitiveness of Indonesia's export products. Keywords: Indonesia, Russia, economy and trade, cooperation, Eurasia.
Introduction
Indonesia and Russia diplomatic relations which have lasted for seventy years years since the opening of relations between the two countries on February 3, 1950 are going well and growing stronger based on the spirit of friendship, equality, mutual respect and understanding. In Asia Pacific, the two regional major countries both view their position as one of the important partners in the bilateral, regional and international arenas. Indonesia carries out foreign policy priorities for the 2020-2024 period which is based on Priority 4 + 1, i.e.: strengthening diplomacy economy, diplomacy of protection, sovereignty and nationality diplomacy, increasing Indonesian contribution and leadership globally and regionally, strengthening diplomatic infrastructure1. Indonesia needs consistent macro strategy at the international level with the pivot to the Eurasia market as its component. Thanks to its geopolitical position and its communication and economic infrastructure, Indonesia could play an important role in new global environment. This has made Indonesia an important pillar of Russia's Southeast policy where both governments share interests in preserving regional stability, such Myanmar coup d'état led to political instability, South China Sea, from Afghanistan to Central Asia and the Middle East and have initiated cooperation in important areas. Indonesia's Foreign Minister Retno Marsudi stated Indonesia and Russia has a trade target of US$5 billion in 2020 [2]. Both countries understand that such target has not been met among other due to the pandemic. Indonesia always welcomes and supports the intensification of ASEAN-Russia cooperative relations, and appreciates Russia's important role in maintaining regional peace and stability.
Indonesia and Russia works together to fight traditional and non-traditional threats such as terrorism and transnational crimes, as well as settling
1 Strategic Plan 2020-2024. - 2021. - January 5. - URL: https://kemlu.go.id/download/ L1NoYXJlZCUyMERvY3VtZW50cy9SRU5TVFJBJTIwTU9TS09XJTIwMjAyMC0yMDI0LnBkZg==
issues related to maritime security and freedom of navigation and aviation. Both sides also support the implementation of the Declaration on Conduct of Parties in Southeast Asia, and the early conclusion of a Conduct of Parties in the international waters. Affirming respect of international laws and principles and prevention of protectionism and unilateral acts are a solid foundation for ASEAN - Russia strategic partnership in the field of politics-security. Obviously, seeking to approach specific problems, nations will likely form flexible situational coalitions of the willing which will include not only committed nation states but also various actors from the private sector, civil society and other actors involved in international affairs [8. - P. 3]. Indo-Pacific terminology has emerged recently, covering the Indian Ocean, Pacific Ocean, Mainland Asia continent, Japan, Southeast Asia and the Australian continent. This region is considered a dynamic area in the 21st century with the highest rate of economic growth compared to other regions of the world. The increase in welfare in a number of countries in the Indo-Pacific, coupled with an increase in defense budgets, reflects an arms race. This is inseparable from conflicts of interest between a number of Indo-Pacific countries in various forms, such as territorial disputes, seizures over natural resources, struggles over access to export goods markets and competition over control of maritime shipping lanes. Territorial disputes become a vulnerable issue and have the potential to turn into open conflict [31. - P. 26]. At the moment, Indonesian and Russian governments are still in negotiations regarding the procurement of the Sukhoi-35 fighter jet. The procurement of these fighter jets is completely without any political interest. Indonesia has never linked the purchase of fighter jets with non-technical elements. Russia is ready to be a military ally that Indonesia can rely on. Suppose this agreement will benefit both countries. Kremlin is ready to send fighter jets to Indonesia in the near future. Moscow confirms its goodwill to continue to fulfill defense cooperation contracts with Jakarta.
Indonesia strategic partnerships in the economic field with Russia should also be improved in parallel as long as it does not create a significant conflict of interest with other global major powers. In the era of President Soekarno, known as Old Order period, Jakarta and Moscow relations were very close. The two heads of state often meet and visit each other. President Soekarno visited the Soviet Union four times in 1956, 1959, 1961 and 1964. Meanwhile, Soviet Union leaders, Kliment Voroshilov and Nikita Khruschev, visited Indonesia in 1957 and 1960. In July 1986, during a speech in Vladivostok, Soviet leader Mikhail Gorbachev mentioned Indonesia one of Asia Pacific countries where Soviet Union was ready to expand relations. In research from Manurung and Bainus [13. - P. 78] in responding to Indonesia's strategic environment in Southeast Asia, thus, defense architecture development is pursued through the smart power defense strategy approach, which is a synergistic combination of the building of hard power and soft power based on strategic rational decisions.
Looking at the economic side, prosperity in the Indo-Pacific region has been affecting developed exporting countries to compete with each other to market their products in the region. The competition is not limited to international trade, but also direct investment to a number of countries in the Indo-Pacific in the fields of distribution network development, manufacturing industry and investment in economic infrastructure development such as ports, roads, railways, power plants and banking. Further, the competition from a number of countries in investing in the region has triggered a significant acceleration of economic growth, so that the Indo-Pacific region is increasingly advanced and progressively attracts foreign investors' interest.
In research from Sanaei and Karami [20. - P. 27] in geostrategic terms, the policies of regional and international rivalries have prompted the four great regions of the world, Europe, transatlantic with the U.S. as its center, Eurasia on the Russian axis, and East Asia with China as the pivot, to attach the greatest importance to shaping the international order architecture. The end of bipolarity and the so-called unipolar moment of the US as the sole superpower is momentum to changing the growing globalization of world politics. Russia and China present themselves as a new counterweight to the neoliberal concept of Western globalization. This was revealed at the BRICS Summit in Russia, which, five newly industrialized countries were attempting to elevate their status as a balancing power to the G-7 group1. The political economy of the US and the EU in combating the financial crisis had a global impact like what happened in Greece. Western global neo-liberalization affecting of destroying job opportunities as well as damaging the global environment, in developing countries particularly. Most likely, imperialism is the final stage of capitalism. The formation of an Asian economic alliance with the region after the dissolution of the Soviet Union was initiated and echoed by Russia and China after the BRICS Summit and the Shanghai Cooperation Organization meeting in 2015.
Acharya and Buzan [1. - P. 218] identified the Third World gets collectively weaker, but some of its members, notably China and India, move into the great power club, and China and Russia align against the US. It creates clear boundary between core and periphery begins to blur. Globalization is characterized by a complex set of interconnectivities and interdependencies with an increasing number of actors vying to influence outcome of these relationships [26]. Liberalism argued that countries do not enrich themselves by running trade surpluses [18]. Instead, countries gain from trade regardless of whether the balance of trade is positive or negative. They are not necessarily made wealthier by producing manufactured goods rather than primary commodities. Governments should make little effort to influence the country's trade balance or to shape the types of goods the country produces.
1 Rusia dan Cina Berambisi Perangi Neoliberalisme. - 2015. - July 10. - URL: https://www.dw. com/id/rusia-dan-cina-berambisi-perangi-neoliberalisme/a-18574852
Petrodollars increased the supply of foreign capital to many developing countries during the 1970s, and the dynamics of international financial integration increased the supply of foreign capital to Asian countries during the 1990s. Developing countries have exploited the opportunities presented by changes in international financial markets with great enthusiasm. According to scholars, neoliberalism has become a common, if still contested, conceptual frame of reference for International Political Economy scholars to better understand the governance of the global economy [21].
Indonesia-Russia Relations: Looking For Closer Cooperation
Indonesia and Russia have a clear commitment to resolve the trade barriers between the two countries. Declaration of the Republic of Indonesia and the Russian Federation on the Framework of Friendly and Partnership Relations in the 21st Century is a historic document that forms a new foundation for strategic cooperation relations at the global, regional and bilateral levels1. Still, there are various great opportunities in activating relations between the two countries in the fields of politics, economy, trade, technology, and military engineering. Additionally, the expansion of market access to the Eurasian Economic Union area should be a priority for Indonesia's trade economic diplomacy. Indonesia highlighted three important things to strengthen cooperation between the two countries, i. e.: building strategic partnerships that are more action-oriented; strengthening economic diplomacy; and refocusing cooperation priorities in the new normal era. One-and-half track diplomacy formulation targeted trade of US$ 5 billion in the future. The Declaration of Friendship and Partnership signed in 2003, thus, became the main basis for the strategic cooperation relationship between the two countries at various levels, including military techniques. Heads of State/ Government have also made state visits, namely: 1) President Megawati Soekarnoputri to Moscow, Russia (June 2003); 2) President Susilo Bambang Yudhoyono (December 2006); 3) President Vladimir Putin's visit to Jakarta Indonesia (September 2007); 4) President Joko Widodo's visit to Russia for the ASEAN-Russia Summit in May 2016.
The closeness of Jakarta's political relations with Moscow, among others, is also reflected in Russia's support for the integration and integrity of the Unitary Republic of Indonesia, against the efforts of separatist groups in Indonesia, as well as mutual support for each country's candidacy in various international organizations. Indonesia and Russia concern with regional and international issues of mutual concern, such Myanmar political turbulence, Middle East situation, Indo-Pacific cooperation, and Indonesia's G20 chairmanship in 2022. Russia firmly supports the centrality of ASEAN and the ASEAN Outlook on Indo-Pacific. The recent arrival of Foreign Minister Lavrov to Jakarta was related to the 25th anniversary of the ASEAN-Russia
1 Hubungan Bilateral antara Indonesia dan Rusia, 2018. - URL: https://kemlu.go.id/moscow/ id/read/hubungan-bilateral-antara-indonesia-dan-rusia/392etc-menu
Partnership1. Foreign Minister Lavrov's visit to Jakarta is the second time in the last four years, after the previous visit on 9 August 2017. Meanwhile, Foreign Minister Retno visited Moscow on 13 March 2018.
The ASEAN and EAEU relations that has been going well so far, both in the economic sector as well as global and regional geopolitics, is proof that the geographical distance does not limit how the two regional organizations can improve their network. Indonesia itself is ready to push for a more strategic and comprehensive framework of cooperation with the EAEU countries, both in a bilateral cooperation pattern, as well as together with ASEAN countries. It is important to prioritize cooperation and economic integration for its member countries, as a way to get out of the middle income trap. Two things are still needed to get out of the middle income trap, namely through investment and the continued digitalization of information technology. Under President Joko Widodo leadership, the increased development of the bilateral trade relations Indonesia and Russia has made closer economic trade cooperation [18].
In trade relations with Russia, Indonesia recognizes that there are still trade barriers that can hinder two countries strategic relations in the future. Thus, Indonesia encourages Russian government to eliminate various trade barriers, increase promotions, and accelerate the process of licensing Russian imports for several agricultural, plantation and fishery products from Indonesia2. Indonesian palm oil, tropical fruit, and coffee are in demand by various groups, especially the younger generation and coffee shop entrepreneurs in Russia. The value of coffee export transactions to Russia in 2019 reached US$17,3 million with a total volume of 11,1063 tons. Indonesia itself is listed as the 7th largest coffee exporter to Russia. For many years, Russia is a non-traditional market for various commodities of Indonesia's leading products.
Henceforth, Indonesian government also always strives to improve trade economic relations with Eastern European and Central Asian countries-members of Eurasia Economic Union. It is done by the establishment of Indonesia-EAEU free trade agreement. The EAEU provides for free movement of goods, services, capital and labor, pursues coordinated, harmonized and single policy in the sectors determined by the Treaty and international agreements within the Union [14]. Indonesia and the EAEU free trade agreement is expected boost export market and trade cooperation. One of ways to open new markets in various regions is through exploring Indonesia's participation in various bilateral, regional and cross-continental trade
1 Bertemu di Jakarta, Menlu RI dan Menlu Rusia Sepakat Tingkatkan Kerja Sama Bilateral. - 2021. - July 7. - URL: https://kanalsatu.com/id/post/56333/bertemu-di-jakarta--menIu-ri-dan-menlu -rusia-sepakat-tingkatkan-kerja-sama-bilateral
2 RI-Rusia Cari Langkah Strategis untuk Tingkatkan Nilai Perdagangan dan Investasi. - 2020. -October 16. - URL: https://ekon.go.id/publikasi/detail/582/ri-rusia-cari-langkah-strategis-untuk-tingkatkan-nilai-perdagangan-dan-investasi
agreements (Cross Regional Trade Agreements), such as Russia's offer to establish free trade cooperation between ASEAN and EAEU.
EAEU is a regional economic integration in the form of an Economic Union, similar to the European Union (EU). However, the EAEU will not apply a policy of using a common currency such Euro (€). This is due to the large differences in economic and financial conditions between EAEU member countries. EAEU promises for the entry of Indonesian products. For this reason, Indonesia needs to carefully map the commodities of leading export products to be traded with EAEU countries, so that they can catch up with the value of the trade deficit so far.
Declaration Framework for Friendship and Partnership Relations Indonesia-Russia In 213t Century
ASEAN 10
(Bangkok,8 August 1967)
1. ndonesla
2. Malaysia
3. Thailand
4. Singapore
5. Philippines
6. Brunei Darussalam
7. Cambodia
8. Laos
9. Myanmar
10. Vietnam
V
Eurasian Economic Union (EAEU)
1. Belarus
2. Kazakhstan
3. Armenia
4. Kyrgyzstan
5. Russia
Figure. Indonesia - Russia Relations
East Europe Central Asia
While, in 2016, Indonesia with Russia signed Defense Agreement guided by the 'Declaration on the Foundations of Friendly and Partnership Relations between the Russian Federation and the Republic of Indonesia in the
XXI Century' was signed in Moscow on April 21, 2003. It also prioritizes defense cooperation between defense ministries and reaffirms the importance of bilateral dialogue on the maintenance of international and regional security, stability and mutual understanding in the field of defense policy, intending to intensify and strengthen the existing bilateral relations through joint defense activities based on the principles of equality, mutual benefit, full respect for the sovereignty and territorial integrity of states, as well as non-interference in internal affairs, with the aim of further strengthening ties between armed-forces.
Further, Russia and Indonesia also signed the Agreement on 'Mutual Legal Assistance in Criminal Cases'1. This Agreement signed in Moscow and
1 Соглашение между Правительством Российской Федерации и Правительством Республики Индонезии о сотрудничестве в области обороны. 2019, 18 Мая. - URL: https://www.
intended solely to provide one Party with legal assistance to the other Party. The provisions of this Agreement do not give rise to the right for any individuals and legal entities to receive or exclude evidence or to impede the execution of a request for legal assistance. State behavior varies more with differences of power than with difference in ideology, in internal structure of property relations or in governmental form [25. - P. 21].
Indonesia-Russia Economics Relations
The structure of the anarchic system compelled states to worry about security and take adequate measures achieve it. Realism and neoliberalism, two schools of international relations theory, provide contending explanations for state behavior in the international system [22. - P. 5]. The latter expects that interstate cooperation will create institutions and regimes for the peaceful settlement of conflicts. The former argues that only 'self-help', the building of individual state military capabilities can assure that state interests will be protected. The study of International Relations has experienced dramatic change as the foundational epistemology has been criticized by post-modern theorists who attack the underlying assumptions of positivism [30]. According to Wendt [29. - P. 193], material forces still matter and people are still intentional actors, but the meaning of the former and the content of the latter depend largely on the shared ideas in which they are embedded, and as such culture is a condition of possibility for power and interest explanations. Culture, power, interests still leave unexplained.
All modern social science disciplines have framed their claims to legitimacy around their divorce from subjective reasoning and a fastened adherence to scientific objectivity [23. - P. 3]. Therefore, International Relations is understood, theorized, and discussed in different locations is also shaped by how the world looks from different vantage points. Scholars recognize that there is not a clear analytical line between security and economic issues, but institutionalist theory has placed an importance on the role of institutions providing information removing the problem of uncertainty [7. - P. 39].
Furthermore, in research from Grigoryev [4. - P. 498] the socio-economic history of Russia demonstrates that its place in global economic relations has been subject to complex cyclical processes. The country entered the 20th century with a high growth rate and burgeoning industrialization that included significant foreign capital. Indonesia still prioritizes its important role and contribution to economic integrity in the Asia Pacific region and supports regional economic recovery through investment openness and advanced industries. Indonesian economy has developed in recent times and managing how the pandemic situation affects the stability of economic activity in the Southeast Asia region.
mid.ru/ru/foreign_policy/international_contracts/2_contract/-/storage-viewer/bilateral/ page-51/43623
The broad impact of COVID-19 on Indonesia's and Southeast Asia's economic development and pursue a resilient community. There are three main pillars to support the Asia-Pacific economic recovery during the ABAC IV 2020 virtual meeting which includes economic integration, innovation, and inclusion [28]. These three priorities are expected to encourage APEC's economic growth in the long term. For twenty five years, economic integration has been the cornerstone. But, Indonesia supply chain and regional manufacturing products are relatively small and has not yet integrated globally. In the Industry 4,0 era, Indonesia as Southeast Asia largest digital economy market has produced many innovations that have benefited the development of startup companies in the last decade, from online ride hailing to digital wallets with broad business models from Business to Business and Business to Consumer.
Methods
Indonesia and Russia relations have fluctuated along with the change in the leadership regime of the Indonesian government since President Soekarno, 1945-1966; President Soeharto, 1966-1998; President B. J Habibie, 1998-1999; President Abdurrahman Wahid, 1999-2001; President Megawati Soekarnoputri, 2001-2004, President Susilo Bambang Yudhoyono, 2004-2009 and 2009-2014 to President Joko Widodo, 2014-2019 and 2019 to present. This research employs descriptive analysis of qualitative research. Economic and trade cooperation between Indonesia and Russia has been revived since Megawati Soekarnoputri was elected as the 5th president.
The method used in this paper is a qualitative analysis method. The collection of literature study data is done by looking for various related information, official data, official reports from government institutions, as well as previous research and writing that raises the topic of the role of Indonesia's economic diplomacy and efforts. Indonesian government is able to engage and improve its trade economic relations with Russia and the Eurasia region that can strengthen the nation's economy to enhance national development. Through this research, the authors wants to elaborate further Indonesia and Russia bilateral cooperation dynamics through economic and trade relations. In explaining geo-economics dynamics, the authors use International Political Economy and Liberalism approach, believes that decisions about resource allocation also have distributional political-economy consequences as influence how income is distributed between groups within countries and between nations in the international system. The concept of national economic interests is also represented by authors to identify how Indonesia implements trade and economics strategies and focus on Russia with EAEU countries to enlarging export commodities of Central Asia and East Europe potential market.
Indonesia in Asia Pacific's Economic Integration
National resilience of a country is a reliable ability to anticipate internal and external threats, shocks and change and channel radical changes or challenges in line with efforts to maintain political stability and prevent violence. Thus, national resilience shows the capacity and national legitimacy to regulate the population, territory, and the integrity of national sovereignty. For many years, Indonesia has a role and contribution in the Asia Pacific regional economic recovery. Economic integration can be pursued through global cooperation which is the key to driving economic progress and sustainable development as the foundation for a strong recovery. Indonesia is open to foreign and domestic business and investment.
Nationally, economic recovery and the investment climate agendas are one of Indonesia's policy priorities at this time. Indonesia has also recently passed the Omnibus Law, which simplifies regulatory barriers, creates a supportive investment climate, and provides legal certainty for businesses and investors. The Omnibus Law is expected to increase the ease of doing business in Indonesia, and become a catalyst for accelerating economic recovery in the regions. According to scholar, economic regionalism has become a real phenomenon in Asia Pacific during the last decade 20. In research from Oatley [18. - P. 34], liberalism argued that countries do not enrich themselves by running trade surpluses. Instead, countries gain from trade regardless of whether the balance of trade is positive or negative. Some countries are made wealthier by making products that they can produce at a relatively low cost at home and trading them for goods that can be produced at home only at a relatively high cost.
Asia Pacific region has experienced the explosion of bilateral and regional trading arrangements since 1990s. Obviously, it is considered as the most progressive and forefront in proliferation of the establishment of Free Trade Agreements (FTAs) and Regional Trade Agreements (RTAs). Further, Asia Pacific Economic Cooperation is not a legally binding economic cooperation forum, but its nature as collective peer pressure is quite effective encourage the dynamics of discussing economic issues in it and give weight to the creation of regional architecture in the region. One of APEC's missions, namely the creation of an area with free trade and investment, is indeed not an easy achievement target and is confirmed through a long process. There are still many differences in perspectives and interests, levels of development, among its members as well as the complexity and dynamics of the region.
Sooner or later, Indonesia will focus on the growth of advanced industries and encourage the adoption of the digital economy as a means to overcome the challenges of the pandemic. Indonesia is home to 2,193 startups, with five startups worth more than US$1 billion, however, the growth potential of Indonesia's digital economy sector is still quite large [10]. Therefore, for this reason, Indonesia opens the door for multi-level cooperation from partners in the region to work together to explore the existing potential. In supporting
people's welfare, the passing of the Omnibus Law is also a complement to the government's efforts to support economic growth and job creation. Inclusion by creating a supportive investment climate for investors is very important in the midst of these conditions. Various programs have been carried out to encourage Indonesia's sustainable development within the framework of the United Nations' Sustainable Development Goals (SDGs), a framework used to end poverty, overcome climate change and protect the planet.
The major paradigms in international relations have viewed power over the past 40 years. It argues that theorizing in the 1970s began a bifurcation that served to split the vison of power between two extremes: a hard-power pole on one side as Realism, and a soft-power pole on the other as Neoliberalism and Constructivism [30]. However, in research from Manurung [16. - P. 38] the loss of Ukraine in 1991 has also ultimately marked the decline of Russia control over this state. Therefore, with the changing of security structure after the Cold War, it also adjusts both states interaction. The political instability in Ukraine on the year of 2014 has sent a significant challenge for Russia's national security, especially towards Crimea as its naval base.
Strengthening Indonesia and Russia Trade Economy Relations
Indonesia's economic diplomacy is a diplomatic activities carried out to achieve economic goals and the achievement of the country's economic policies through various bilateral and multilateral cooperation, covering the sectors of trade, investment, energy, transportation, tourism, agriculture, fisheries, industry, finance, taxation, employment, economics, engineering, and information technology. In new research from Makarov, Rubinchik and Kladkin [11. - P. 5] founded that Russia and the Netherlands have centuries of experience in the successful development of trade and economic ties. When both states were just beginning to develop actively, ships filled with various goods were already cruising between their shores, and the heads of state were building a bilateral trade policy. Indonesia is important trading partner for Russia, and Russia is committed to increasing the value of trade and investment with Indonesia.
Indonesia is one of Russia's largest and most promising trading partners in Southeast Asia. In 2019, Indonesia's exports to Russia significantly exceeded Russia's supply volume to Indonesia. The participation of Indonesian export commodity products in various international exhibitions is an effective way to promote products and services to new markets. Russian President Vladimir Putin's last meeting with Indonesian President Joko Widodo on the sidelines of the ASEAN Summit in Singapore in November 20181. This was followed by an intensive meeting between the parliaments of the two countries in February 2019. Indonesia and Russia balance of trade period 2018 to 2020 according to Statistics Indonesia data, as follows:
1 Indonesia Mitra Dagang Penting Rusia di ASEAN. - 2019. - March 14. - URL: https://economy. okezone.com/ read/2019/03/14/320/2029853/indonesia-mitra-dagang-penting-rusia-di-asean
T a b l e 1
Indonesia-Russia Balance of Trade, 2018-2020* (in million US$)
Country Balance of Trade
Russian Federation Export Import Balance of Trade
2018 2019 2020 2018 2019 2020 2018 2019 2020
1 000,90 864,10 973,50 1551,10 1 204,50 957,90 -550,20 -340,40 15,70
* Source: Statistics Indonesia.
Meanwhile, the relatively high disparity in the welfare of each ASEAN member country can always trigger regional economic problems. This kind of thing happened in the European Union, where a number of EU member countries experienced an economic recession indirectly, thus hampering the progress of the EU's economic growth as a whole.
Indonesia's effort to enhance its regional power reputation for implementing foreign and defense policy at the international level, particularly at upgrading its national defense system [12. - P. 27]. The purchase of the fighter jets is aimed at replacing a squadron of obsolete US-made F-5 E/F Tiger fighters. Before finally deciding to buy the Su-35, the Indonesian government had first considered buying Lockheed Martin Corp's F-16V, BAE Systems Plc's Eurofighter Typhoon, or Saab AB's Gripen.
Indonesian Foreign Minister Retno Marsudi stated that Russia is one of Indonesia's most important partners, especially in the Eastern European region. Additionally, Russian Foreign Minister Lavrov highlighted Russia and Indonesia are celebrating the 70th anniversary of the establishment of diplomatic relations. A significant date is always a good opportunity not only to sum up the results of the path traveled together, but also to outline plans for the future1. According to Lavrov, Indonesia is Russia's most important partner in Asian region. The statement was made in Jakarta when Indonesia and Russia signed an agreement to further enhance bilateral cooperation in various fields, particularly in the fields of health, trade, investment, education, and security2. Overall, the deliveries of military products to Indonesia have totaled more than US$2,5 billion since November 19923. Over this period, Russia has delivered BTR-80A armored personnel carriers and BMP-3F infantry fighting vehicles, 100th series Kalashnikov assault rifles, Su-27SK and Su-27SKM, Su-30MK and Su-30MK2 planes, Mi-35 and Mi-17 helicopters, and also other weapon systems and military hardware. The two foreign ministers agreed to increase various
1 Лавров С. В. Россия и Индонезия: 70 лет плодотворного сотрудничества / / Компас. - 2020.
2 февраля. - URL: https://www.mid.ru/foreign_policy/news/-/asset_publisher/cKNon-kJE02Bw/content/id/4016185
2 Bertemu di Jakarta, Menlu RI dan Menlu Rusia Sepakat Tingkatkan Kerja Sama Bilateral. - 2021. - July 7. - URL: https://kanalsatu.com/id/post/56333/bertemu-di-jakarta--menlu-ri-dan-menlu -rusia-sepakat-tingkatkan-kerja-sama-bilateral
3 Russia's Arms Exports to Indonesia top $2,5 bln over 25 years. - 2018. - February 21. - URL: https://tass.com/ defense/991061
efforts to realize the bilateral trade target between Indonesia and Russia to US$ 5 billion as agreed by both countries leaders previously. These ministers also agreed to speed up the negotiation process of Indonesia and Eurasian Economic Union Trade agreement, in which Russia is part of the EAEU so that the total population reaches 450 million people.
In research from Hong, Lugg and Sumsky [5], in 2012, Russia assumes the Chairmanship of APEC, and is keen to build on its memberships of both the East Asia Summit (EAS) and the Asia-Europe Meeting (ASEM). Russia is geographically and historically part of Asia and the Asia Pacific, and has been a dialogue partner of ASEAN since 1996. Russia attempts to diversify relations in the region away from China due to the overdependence of Russia's Far Eastern region on China in economic terms [9. - P. 138]. In addition to the refinery project, Russia is also interested in investing in energy and infrastructure, including in the development of Indonesia's new capital city. Both countries agreed to prepare a strategic partnership cooperation document to be signed during the visit of Russian President to Indonesia, in addition to 27 other agreements in various sectors to enhance partnerships at a strategic level. Russia is Indonesia's main trading partner in Eastern Europe. Even though in the midst of the COVID-19 pandemic, in 2020 the trade value between the two countries was recorded at US$ 1,93 billion, only down 6.61% from 2019 of US$ 2,06 billion. Meanwhile, Russian investment in Indonesia in 2020 was recorded at US$ 4,6 million in 202 projects.
Indonesia Effort to Access Eurasia Market
Russia as the largest country in EAEU is 80 percent of the contributor to gross domestic product for the EAEU, thus, increasing cooperation with Russia is an absolute must. One of Indonesia's leading products with great potential for the EAEU market is palm oil. The Eurasian Economic Union is an economic union of states located in Eastern Europe, Western Asia, and Central Asia. EAEU treaty was signed on 29 May 2014 by the leaders of Belarus, Kazakhstan, and Russia, and came into force on January 1,2015. Armenia accession is on 9 October, and Kyrgyzstan also joined on 23 December 2014. It is being created to comprehensively upgrade, raise the competitiveness of and cooperation between the national economies, and to promote stable development in order to rise. Indonesia can take advantage of the memorandum of understanding of cooperation with the EAEU, through the formation of working groups, to negotiate tariff exemptions for goods and services of the two countries and other matters, before finally Indonesia decides to form an integration of economic cooperation in the form of a free trade area or a Comprehensive Economic Partnership Agreement (CEPA), or some other form [24].
T a b l e 2
Indonesia - Kazakhstan Balance of Trade, 2016-2021* (in thousand US$)
Description 2016 2017 2018 2019 2020 Trend 20162020, % Jan - July Change 2021/2020, %
2020 2021
Total Trade 22,123.1 52,920.9 60,299.8 348,940.4 149,868.6 77.05 82,619.3 156,637.8 89.59
Oil & Gas 0.0 0.0 0.0 0.0 0.0 0.00 0.0 0.0 0.00
Non-oil & gas 22,123.1 52,920.9 60,299.8 348,940.4 149,868.6 77,05 82,619.3 156,637.8 89,59
Export 7,176.6 15,300.0 33,561.2 207,135.6 19,786.6 58,94 11,879.0 8,602.2 -27.58
Oil & Gas 0 0 0 0 0 0.00 0 0 0.00
Non-oil & gas 7,176.6 15,300.0 33,561.2 207,135.6 19,786.6 58,94 11,879.0 8,602.2 -27.58
Import 14,946.5 37,620.9 26,738.6 141,804.8 130,082.1 76,02 70,740.3 148,035.6 109,27
Oil & Gas 0 0 0 0 0 0.00 0 0 0.00
Non-oil & gas 14,946.5 37,620.9 26,738.6 141,804.8 130,082.1 76,02 70,740.3 148,035.6 109,27
Balance of Trade -7,769.9 -22,321.0 6,822.6 65,330.7 110,295.5 0.00 -58,861.3 -139,433.5 -136,88
Oil & Gas 0.0 0.0 0.0 0.0 0.0 0.00 0.0 0.0 0.00
Non-oil & gas -7,769.9 -22,321.0 6,822.6 65,330.7 110,295.5 0.00 -58,861.3 -139,433.5 -136,88
* Source: Indonesia-Kazakhstan Trade Balance Period 2016-2021. - URL: https://satudata.kemendag. go.id/balance-of-trade-with-trade-partner-country
Indonesia still deficit in its trade balance with Kazakhstan from January to July 2021 with US$ 139,433.5 thousand. Total trade in 2021 reaches US$ 156,637.8 thousand and in 2020 is only US$ 82,619.3 thousand.
T a b l e 3
Indonesia - Belarus Balance of Trade, 2016-2021* (in thousand US$)
Description 2016 2017 2018 2019 2020 Trend 20162020, % Jan - July Change 2021/ 2020, %
2020 2021
1 2 3 4 5 6 7 8 9 10
Total Trade 166,547.1 205,307.8 221,332.6 210,167.4 165,192.6 0.07 101,570.6 129,914.0 27,91
Oil & Gas 0.0 0.0 0.0 0.0 0.0 0.00 0.0 0.0 0.00
Non- oil & gas 166,547.1 205,307.8 221,332.6 210,167.4 165,192.6 0.07 101,570.6 129,914.0 27,91
Export 2,885.5 3,519.7 3,762.9 3,009.9 7,023.6 17,62 2,138.0 626,5 -70,69
Oil & Gas 0 0 0 0 0 0.00 0 0 0.00
Non- oil & gas 2,885.5 3,519.7 3,762.9 3,009.9 7,023.6 17,62 2,138.0 626,5 -70,69
Import 163,661.5 201,788.1 217,569.7 207,157.5 158,169.1 -0,42 99,432.6 129,287.4 30,03
Oil & Gas 0 0 0 0 0 0.00 0 0 0.00
Non- oil & gas 163,661.5 201,788.1 217,569.7 207,157.5 158,169.1 -0,42 99,432.6 129,287.4 30,03
* Source: Indonesia-Belarus Trade Balance Period 2016-2021. - URL: https://satudata.kemendag.go.id/ balance-of-trade-with-trade-partner-country
E n d o f t h e t a b l e 3
1 2 3 4 5 6 7 8 9 10
Balance of Trade -160,776.0 -198,268.4 -213,806.7 -204,147.6 -151,145.5 0,94 -97,294.7 -128,660.9 -32,24
Oil & Gas 0.0 0.0 0.0 0.0 0.0 0.00 0.0 0.0 0.00
Non- oil & gas -160,776.0 -198,268.4 -213,806.7 -204,147.6 -151,145.5 0,94 -97,294.7 -128,660.9 -32,24
Indonesia balance of trade with Belarus is deficit from January to July 2021 with US$ 128,660.9 thousand. Total trade in 2021 reaches US$ 129,914 thousand and in 2020 is US$ 101,570.6 thousand.
T a b l e 4
Indonesia - Armenia Balance of Trade, 2016-2021* (in thousand US$)
Description 2016 2017 2018 2019 2020 Trend 20162020, % Jan - July Change 2021/ 2020,%
2020 2021
Total Trade 2,193.0 4,290.6 3,586.6 2,476.0 1,809.9 -8.92 844,7 1,948.1 130,62
Oil & Gas 0.0 0.0 0.0 0.0 0.0 0.00 0.0 0.0 0.00
Non-oil & gas 2,193.0 4,290.6 3,586.6 2,476.0 1,809.9 -8,92 844,7 1,948.1 130,62
Export 2,185.7 4,178.7 3,129.1 2,433.4 935,2 -20.06 537,0 1,288.8 139,99
Oil & Gas 0 0 0 0 0 0.00 0 0 0.00
Non-oil & gas 2,185.7 4,178.7 3,129.1 2,433.4 935,2 -20,06 537,0 1,288.8 139,99
Import 7,4 111,9 457,5 42,6 874,7 135,97 307,7 659,3 114,26
Oil & Gas 0 0 0 0 0 0.00 0 0 0.00
Non-oil & gas 7,4 111,9 457,5 42,6 874,7 135,97 307,7 659,3 114,26
Balance of Trade 2,178.3 4,066.7 2,671.6 2,390.9 60,5 -53,69 229,3 629,5 174,52
Oil & Gas 0.0 0.0 0.0 0.0 0.0 0.00 0.0 0.0 0.00
Non-oil & gas 2,178.3 4,066.7 2,671.6 2,390.9 60,5 -53,69 229,3 629,5 174,52
* Source: Indonesia-Armenia Trade Balance Period 2016-2021. - URL: https://satudata.kemendag.go.id/ balance-of-trade-with-trade-partner-country
Indonesia balance of trade with Armenia is surplus from January to July 2021 with US$ 629.5 thousand. Total trade in 2021 reaches US$ 1,948.1 million and previously in 2020 reaches US$ 844.7 thousand.
T a b l e 5
Indonesia - Kyrgyzstan Balance of Trade, 2016-2021* (in thousand US$)
Description 2016 2017 2018 2019 2020 Trend 20162020, % Jan - July Change 2021/ 2020, %
2020 2021
1 2 3 4 5 6 7 8 9 10
Total Trade 1,912.0 907,3 17,550.9 1,345.8 1,540.0 -0,38 893,6 1,731.2 93,75
Oil & Gas 0.0 0.0 0.0 0.0 0.0 0.00 0.0 154.1 0.00
Non-oil & gas 1,912.0 907,3 17,550.9 1,345.8 1,540.0 -0,38 893,6 1,577.1 76,50
Export 1,486.6 666,8 1,803.4 1,250.3 1,302.5 3,71 803,4 1,620.1 101,64
Oil & Gas 0 0 0 0 0 0.00 0 154.1 0.00
* Source: Indonesia - Kyrgyzstan Trade Balance Period 2016-2021. - URL: https://satudata.kemendag. go.id/balance-of-trade-with-trade-partner-country
E n d o f t h e t a b l e 5
1 2 3 4 5 6 7 8 9 10
Non-oil & gas 1,486.6 666,8 1,803.4 1,250.3 1,302.5 3,71 803,4 1,466.0 82,46
Import 425,4 240,5 15,747.4 95,5 237,5 -18,85 90,1 111,2 23,33
Oil & Gas 0 0.0 0 0 0 0.00 0 0 0.00
Non-oil & gas 425,4 240,5 15,747.4 95,5 237,5 -18.85 90,1 111,2 23,33
Balance of Trade 1,061.1 426,3 -13,944.0 1,154.8 1,064.9 0.00 713,3 1,508.9 111,54
Oil & Gas 0.0 0.0 0.0 0.0 0.0 0.00 0.0 154.1 0.00
Non-oil & gas 1,061.1 426,3 -13,944.0 1,154.8 1,064.9 0.00 713,3 1,354.8 89,93
Indonesia balance of trade with Kyrgyzstan is surplus from January to July 2021 with US$ 1,508.9 million. While total trade in 2021 reaches US$ 1,731.2 million and previously in 2020 reaches US$ 893.6 thousand.
The COVID-19 pandemic has an impact on changing the world's new political order with the emergence of several government policies such as the total closure of countries or lockdown policy [6]. The policy of Indonesian government to close its geographical boundaries temporary, finally making matters of international cooperation cause a paradox, so that countries are forced to return to the concept of the each state.
Further, in response to the impact of the global pandemic, Indonesia and Russia agreed to increase economic cooperation in trade, investment and industry for economic recovery. Indonesia and Kazakhstan recorded a significant increase in trade value from US$ 60.3 million in 2018 to US$ 317.85 million in the January to October 2019 period. Previously, Kazakhstan asked Indonesia to increase the participation of observers to become members of the Islamic Organization for Food Security. Kazakhstan also invited Indonesia to attend the Conference on Interaction and Confidence Building Measures in Asia in 2020, that Kazakhstan will be chairman for the period 2020 to 2022. Until now, there are still many potential for cooperation between both countries that need to be optimally explored, including the fields of air transportation, banking, halal industry, agriculture, energy, and various strategic industries.
Furthermore, at the end of December 2019, Indonesia has asked Kazakhstan as a member of the initiator of the Eurasian Economic Union to support the initiative to establish the Indonesia and EAEU Free Trade Agreement. Cooperation within the EAEU framework is expected to further advance the regional economy development, particularly in Europe and Asia.
It is currently negotiating a free trade agreement with the EAEU, as part of the priority of economic diplomacy [27]. In the international market, it is believed, Indonesia has a huge asset to develop a quality and sustainable economy. In 2019, the markets and productive population of Indonesia reached about 150 million people will optimize the bargaining power of its own and will continue to be capitalized in developing economic cooperation with other countries for mutual benefit [14].
This opportunity advantage should be taken by Indonesia due to the previous active engagement of other ASEAN countries, such as Vietnam, Singapore, and Malaysia have already utilized EAEU's market for some years. One of the real challenges that Indonesia faces in conducting economic cooperation with the EAEU is connectivity. Ports in Russia are Indonesia's mainstay for loading goods in the EAEU. Indonesia and the EAEU are able to have advantage of the People's Republic of China mega project that increases economic cooperation for countries on the Silk Road followed by One Belt One Road initiative through massive infrastructure development, so that shipping costs can be reduced.
Indonesia supports Russia's efforts with the EAEU in overcoming the impact of the COVID-19 pandemic through increasing more facilitative policies on trade cooperation, and encouraging the importance of the collective efforts of all countries involved to avoid mutually hindering actions that could exacerbate the impact of the pandemic on international free trade performance.
Conclusion
Indonesia still needs to improve and optimize the value of the benefits of economic diplomacy through the intensity of foreign relations, especially the trade economy with Russia. It is necessary to utilize Russian domestic market as a bargaining power to establish mutually beneficial economic cooperation at the bilateral and regional levels; strengthening strategic and mutually beneficial economic cooperation with major key markets and breakthrough steps to penetrate potential markets in Eurasia regions, among others through the completion of various CEPA/FTA/PTA negotiations that will benefit Indonesia's national interests; integrate the promotion of trade and investment that is more focused and provides concrete results for increasing economic growth of both countries and the region.
Indonesia's economic diplomacy should be improved globally and able to mapping the main prioritized trade sectors, boost exports of Indonesia's leading product commodities, and investments that are of interest to the Russian business world and particularly in Eurasian countries (EAEU), as well as continuously advance Indonesia's economic potential by involving business players and local governments.
Promoting paradigm of mutual benefit, justice, and not zero-sum should always become Indonesia diplomacy trade economy priorities in building coalition in the midst of countries protectionism and over nationalism. Only collaboration can develop economic growth opportunities. It is necessary also to develop and maintain positive image in the eyes of the international community. The current existing of a positive image that is formed will generate international trust, thus, that it can place Indonesia's position as a sovereign nation in various aspects of international cooperation.
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Сведения об авторах
Хендра Манурунг
департамент международных
отношений Университета
Паджаджарана.
Адрес: Бандунг, Западная Ява,
Индонезия.
ORCID: 0000-0002-4560-1729 E-mail: hendra19001@mail.unpad.ac.id
Information about the authors
Hendra Manurung
International Relations Department Padjadjaran University.
Address: International Relations Department Padjadjaran University, Bandung, West Java, Indonesia.
ORCID: 0000-0002-4560-1729 E-mail: hendra19001@mail.unpad.ac.id. ORCID 0000-0002-4803-1418
Теуку Резасях
департамент международных
отношений Университета
Паджаджарана.
Адрес: Бандунг, Западная Ява,
Индонезия.
E-mail: teuku.rezasyah@unpad. ac. id Арри Бейнус
департамент международных
отношений Университета
Паджаджарана.
Адрес: Бандунг, Западная Ява,
Индонезия.
E-mail: arrybainus@unpad.ac.id
Русади Кантаправира
департамент международных
отношений Университета
Паджаджарана.
Адрес: Бандунг, Западная Ява,
Индонезия.
E-mail: rusadi.kantaprawira@unpad.ac.id
Teuku Rezasyah
International Relations Department Padjadjaran University.
Address: International Relations Department Padjadjaran University, Bandung, West Java, Indonesia.
E-mail: teuku.rezasyah@unpad.ac.id Arry Bainus
International Relations Department Padjadjaran University.
Address: International Relations Department Padjadjaran University, Bandung, West Java, Indonesia.
E-mail: arrybainus@unpad.ac.id
Rusadi Kantaprawira
International Relations Department Padjadjaran University.
Address: International Relations Department Padjadjaran University, Bandung, West Java, Indonesia.
E-mail: rusadi.kantaprawira@unpad.ac.id
