Tue, 21 Mar 2023

VOA Interview: Indonesia's Sri Mulyani Indrawati

Voice of America
27 Nov 2022, 18:36 GMT+10

jakarta - Following this month's G-20 summit in Bali, Indonesia, White House Bureau Chief Patsy Widakuswara spoke with the country's finance minister, Sri Mulyani Indrawati, in Jakarta about the geopolitical tensions of hosting the summit during Russia's war on Ukraine. They also discussed the U.S.-China rivalry in Southeast Asia.

This interview has been edited for clarity and brevity.

VOA: Madam Finance Minister Sri Mulyani, thank you so much for spending time with VOA today. I'd like to start with a brief look back at the G-20. Indonesia hosted this summit under very challenging circumstances, geopolitical tensions from the fallout of the war on Ukraine. I mean, even just a few months ago there were these boycott threats from Western leaders unless Vladimir Putin was excluded. I think there was a lot of pressure on Indonesia to focus the summit on isolating Russia and helping Ukraine. So, if you can share a little bit about the behind-the-scenes dynamics and how Indonesia navigated those challenges.

Sri Mulyani Indrawati: Well, Indonesia presidency is very firm. First, from the very beginning we said that the theme of 'Recover Together, Recover Stronger' is very important. This is showing that the G-20 as a global economic forum, premier global economic cooperation forum, should be able to address the issue of economically important globally. That is, how to recover together, recover stronger from the pandemic, and then the new challenge because of the new race which is coming. And for us to be able to recover together, the cooperation is definitely needed, that's one very important [thing].

The second one, we also as a presidency, we also remind the membership, especially the one who tried to say that, well, why don't we just disinvite Russia? We said that the G-20 was created to save the world from the economic collapse during the global financial crisis, and that kind of cooperation certainly we'll need it, not only facing the global financial crisis back in 2008, but also when we are facing the pandemic, in which all countries need to work together. No single country can actually address an issue like pandemic, which is actually borderless.

And then also the issue regarding climate change, which also requires a lot of cooperation, definitely, for us to address the issue of this global challenge. So, we reminded all the membership that this kind of cooperation is non-negotiable for us. This forum should not be breaking, but two weeks after our February meeting, then the war began. So, April is actually the most difficult one, because that's only a couple of months after the war started. So, we have to respond to whether Russia should attend, whether if they attended, they are allowed to speak, when they are going to speak, how they are going to respond - those very, very detailed preparation and negotiation.

VOA: And the outcome with G-7 leaders coming, President Vladimir Putin not showing up in person, obviously, and then President Volodymyr Zelenskyy participating virtually. Is that the optimum outcome for Indonesia?

Sri Mulyani: Yes, well, considering that we try to create the honest broker, and at the same time also try to overcome the problem by creating a platform of communication. Because when you are even in the war, you still need to communicate to each other, right? Or else then the war is going to be long-lasting. So, our initiative to say that, OK, we are going to invite President Zelenskyy, in this case at the ministerial level, I invite the minister of finance first. So, we invited, for example, this in April. They are actually welcoming this gesture. And then we also provide them with the ability, or the time, to speak regarding what is happening and, also, Russia to also allow, to also intervene and make the statement. Although on the first meeting, there were a group of seven that walk out from the room, but I think that is good for the ministerial level, to provide this kind of tension to be diffused. So, when we have these leaders' meeting, I think they already know what is actually what we want, in terms of their expectation of the meeting and who should attend, how we are going to address the issue.

VOA: I want to move on to another meeting that was considered partly Indonesia's diplomatic success, which is the meeting between President Biden and President Xi, which was some sort of modest lowering of tension in the region. From your point of view, from point of view of Indonesia and the region, what is the most concerning on the U.S.-China rivalry? Do you feel that there is a new Cold War brewing in this region?

Sri Mulyani: Well, the two countries are the two biggest countries in terms of the economy. So whatever is going to happen between the two countries definitely is going to affect the rest of the world. That's one.

The second one, that China is in Asia. So when there is tension or geopolitical change in this case, trade or investment relations, which is creating a tension, it will definitely affect Asia in general because it's really happened in this region. So for all of us, I think Asia and then the rest of the world, we have the interest to make the relationship work in a responsible way. And that's exactly what is communicated by the two leaders. That is going to create less damage to the very fragile global economic recovery at this very moment and at the same time also creating a much better if they have any differences or any political objective, then they should have the ability to discuss among them that for sure. Asia and ASEAN in general, this is the region which is being seen as the brightest spot of the world in terms of the economic performance, relatively safe in terms of the security as well as the war or tension in this case. And that's allowing many of the ASEAN countries to actually catch up and build and develop so that they are reducing the poverty, creating prosperity and creating also a positive benefit to the world. So that kind of benefit, that needs to be emphasized.

VOA: And how would you characterize Indonesia's position in this rivalry between the U.S. and China? I mean, you know, we understand the free and active foreign policy. We heard President Joko Widodo call President Biden 'my senior' and President Xi Jinping 'big brother' - I mean, we get all of that. But when we're looking at trade volume investment in infrastructure, the interaction between leaders, it does seem that Jakarta is closer to Beijing compared to Washington. Is that a fair characterization?

Sri Mulyani: Politically, we always stated that we are nonaligned. Economically, whether you're talking about trade investment, I think we're establishing a strategic relation with parties. If you look at the trade partner, Indonesia to China as well as the United States, they are always among the two largest. Of course, sometimes going through the Singapore as another hub. But they are still the most important. If you talk about the investment sources also, I think China, in terms of their many of the objective to build like a Silk Road, that is going to also create an opportunity for Indonesia to continue improve connection. But at the same time Indonesia traditionally also has a lot of investment from the United States. So I don't know what do you mean by characterizing it? Meaning that Indonesia is an open small, or relatively small, if you talk about the size. But we are always open and nonaligned. And I think that's also the situation we just adopted by relatively ASEAN-10, which I said earlier it's creating a much, much better result in terms of the peace, security and prosperity for many people. Don't forget, of course, for Indonesia, we are still need first trade partner which is reliable. We also need investors to come to Indonesia because we continue to have the capital inflow in order for us to be able to continue building, although domestic resources is starting to be also becoming so important and significant. But we are still open economy.

VOA: What about the plan for the new capital city in Kalimantan? Can you speak about the source of financing, whether it's from the Belt and Road Initiative or from G-7 countries, that Indonesia envisions?

Sri Mulyani: The new capital city is actually, through the legislation, going to be built in stages. It will be at least four or five times five years, so it's going to be 20 to 25 years. From the first stage, the whole idea, first, of course, the government's own money is very important because, for example, like opening the road to the location, water, and we are also allowing, in this case, the electricity, the power plant to be able to, starting to produce the electricity, but Kalimantan is a huge potential for renewable over there.

VOA: So is this also open?

Sri Mulyani: Most of them, in this case, each stage has a difference regarding how much the portion of the government-driven money. And this is also government-driven money was actually invested in order for us to be able to attract more investors coming to Indonesia. So it's like one package. The president is, of course, is seeing this as a project which they also offer for many strategic partners, whether it is from the Middle East, whether this is coming from G-7, or from China. I think they are open for that and what we are now aiming to achieve is on the first stage, in which the level of readiness for the building that needs to be executed, I think, is already being started. And much as I can remember, until today, is mostly the government budget money. The next stage, when we are allowed to have a more mature plan, then we are going to be able to attract more private sector to come.'

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