Beijing, China, 23-10-2008

Addres at Beijing University: `Indonesia, China and East Asia: Building Bridges During Turbulent Times`

 

INDONESIA, CHINA AND EAST ASIA:
BUILDING BRIDGES DURING TURBULENT TIMES

DR. SUSILO BAMBANG YUDHOYONO
PRESIDENT OF THE REPUBLIC OF INDONESIA

ADDRESS AT BEIJING UNIVERSITY
BEIJING, PRC - 23 OCTOBER 2008
( 13:30 – 14:30 )

<i>Bismillahirrahmanirrahim
Assalamu’alaikum Wr Wb</i>

President of Beijing University, Prof. Xu Zhihong
Distinguished Guests,
Ladies and Gentlemen

It is a great honor for me to address this audience at the world famous Beijing University. And it is a pleasure to be in China once again and mingle with the Chinese people, who are exuding so much confidence and goodwill after hosting the very successful Summer Olympic Games of this year. For this accomplishment, I warmly congratulate the great Chinese nation.

I also bring with me the warm greetings and respects of the people of Indonesia. We have much admiration for China’s progress and transformation as a nation, which has become one of Asia’s most remarkable success stories. China is more than the world’s oldest civilization; within a generation or two, it will become the world’s biggest economy. What happens to China determines what happens to Asia, and the world.

And this is why the strategic partnership between Indonesia and China is, indeed, very strategic—both to our national interests, and to Asia. I will talk about this later.

But first let me say a word or two about Indonesia.

Perhaps many of you have a mental image of Indonesia. A large country with a population of 240 million people. A country with many islands – some 17,000 of them. A country with the largest moderate Muslim population in the world. A country of immense diversity of ethnic groups and cultures. Perhaps the mention of Indonesia evokes an image of the island paradise of Bali, since this is a favourite destination of Chinese tourists.

But let me give you now a more comprehensive picture of Indonesia.

Like China, Indonesia has undergone a major transformation in the last 10 years. We have fully recovered from the financial crisis of 1997. Our two elections—in 1999 and 2004—is the culmination of our democratic transition. In 2004, I was privileged to be Indonesia’s first directly elected President. In the past couple of years, we have experienced a dramatic growth in our democracy at the local level, where all local officials: governors, mayors, and regency heads—are all directly elected.

We have also resolved and managed separatist conflicts, which means Indonesia is today more united and stronger than ever. And we have regained political stability.

We are also waging a relentless battle against corruption, which some say is the most aggressive anti-corruption campaign in our history. We have managed to break up the terrorist networks in the country and brought most of their operatives to justice.

And we have cleansed our legal system and our society of all forms of discrimination. We have made sure of that through our Citizenship Law of 2006. People from ethnic minorities, including those of Chinese descent, are represented at various levels of the local and national governments. Indonesians of Chinese descent are active in the various political parties. There is a Chinese-language news program on our television. And the Chinese New Year is a national holiday in Indonesia.

In short, Indonesia, as in the case of China, is a different nation from what we were two or three decades ago. The difference is due to what we achieved during that period.

Our economy has also done well, although our growth is still below China’s. Our growth last year was the highest since the crisis. In spite of the global economic slowdown, our growth for 2008 is expected to be between six and 6.3 percent. Our reserves are at its highest ever.

Our debt to GDP ratio, at some 35 percent is our lowest in history. Our exports have surpassed USD 100 billion. And China is becoming an increasingly important export market. China’s share of Indonesia’s exports grew from 3.6 percent in 2002 to 8.6 percent in 2007.

Like China, Indonesia’s domestic consumption has also remained robust as incomes grow and the middle class continues to expand. Ten years ago at the height of the Asian Crisis, Indonesia’s per capita income fell to less than US $1000. It is back to $2300 in 2008 and is expected to reach $2500 in 2009.

We are also highly committed to good governance, and to reducing poverty and unemployment with strong focus of the budget on social welfare and poverty alleviation programs. Our poverty figures today are at their lowest in 10 years.

So that is the picture, in broad strokes, of Indonesia today.

As Indonesia changed, so has our relationship with China. Since 2005, Indonesia and China has entered into a Strategic Partnership. This has been a major development in our diplomacy -- a great leap from the days when our diplomatic relations were frozen. Indeed, it has been a personal pleasure for me to see our relations with China flourish and elevated to new heights.

What we need to do now is deepen and expand this strategic partnership. The potential for this relationship to flourish across all sectors is astonishing. China’s investments in such sectors as oil and minerals, power generation and infrastructures are rising. At a time when there is a global energy crisis, we appreciate China’s role in building power generation in Indonesia.

China and Indonesia already have a Free Trade Agreement which covers goods, and will soon cover services and investment.

In terms of sectoral investment opportunities, there are plenty of these in the agricultural and infrastructures sector. Major expansions are expected in infrastructure and resource-based sectors, as well as increasing the competitiveness and value added of manufacturing industries.

A key part of this strategic partnership is making it go deep to the grassroots. We are seeing more exchanges of tourists and students and social organizations between the two countries. This means that there are more stake-holders in our strategic partnership.

We are also working closely together to contribute to the political stability of the larger Asia-Pacific region. This is important because China today is the world’s most dynamic economy and an anchor of stability in this part of the world. Indonesia, on the other hand, is the largest country with the largest economy in Southeast Asia.

Thus individually and together we are called upon to play a role in ensuring that the East Asian region remains stable so that it can weather the current turbulent economic situation and achieve its own recovery. Both must do what it can to sustain its economic dynamism and to take a leadership role in promoting and strengthening economic and security cooperation in East Asia.

By security cooperation, I refer to efforts at addressing non-traditional security threats like terrorism, transnational crime, the possible outbreak of pandemics and the impact of natural disasters that often visit upon the region.

Why are we strategic partners? Well, for many reasons. China is the world’s most populous nation and Indonesia is the fourth most populous. China is the largest country in Asia and Indonesia is the largest country in Southeast Asia. As our economies grow, we have become more interdependent than ever.

Our relations have strategic impact on our respective national interests: for example, our bilateral trade in 2008 is expected to exceed the $20 billion target that President Hu Jintao and I set in 2005 and will easily reach $30 billion by 2010. Our relations are strategic because China’s success and Indonesia’s success have now become increasingly intertwined.

Our strategic partnership is also for the long-term, because we take a long view on nurturing our friendship. Our relations are guided by shared views and common principles, including the Ten Principles of Bandung, which include non-interference and respect for sovereignty. And our relations are strategic because they help promote regional peace, cooperation and stability.

Indonesia and China have similar views on world affairs. We are both advocates of enlightened nationalism. We both embrace multilateralism. And we are both playing an active role in the realization of the long-anticipated Pacific Century.

There is no denying the peaceful rise of China as an economic powerhouse and the tremendous expansion of the reach of its soft power into Southeast Asia. This is the most important geopolitical development in Asia in recent times. And it is crystal-clear evidence that the Asian Century has dawned. And like all the nations of Southeast Asia, Indonesia is responding positively to China’s soft power.

But the eyes of China and Indonesia are not focused on Asia alone. Our visions have a global sweep. We both seek a better world order based on mutual respect and equality among nations, peace and stability, social justice, and equitably shared prosperity.

Such a world order, however, has been elusive. There are armed conflicts, unresolved disputes and tensions in various places around the world. Arsenals of weapons of mass destruction have not been reduced. The nuclear Non Proliferation Treaty is being shaken. The possibility of a clash of civilizations still looms on the horizon. Terrorist organizations are still very much around and still constitute a threat to our societies.

Some 80 percent of the world’s wealth is still controlled by only 20 percent of the human race. Hundreds of millions in Asia and Africa still languish in poverty. A scarcity of resources and technology continues to render the nations of the developing world vulnerable to all sorts of disaster—natural and man-made.

And as if all these challenges are not enough, the world is now in the midst of an array of crises: the financial crisis that has led to the crash of markets and the downfall of multinational lenders, the energy crisis, the food crisis and the crisis of the environment, which is the reality of climate change.

A world in crises is a world full of opportunities for reform, for the making of a new order that is more just and more supportive of the long-term survival of humankind. China in partnership with Indonesia and all like-minded nations have all the opportunities to bring about the shaping of that better world.

This is Indonesia’s considered view: together we can push for the formation of a global partnership that will serve as a new global architecture. It will be a new global architecture for cooperation to address such intractable issues as world trade, financing for development, disarmament, and reform of the United Nations.

At the regional level and for regional purposes, we have the beginning of such an architecture in East Asia. That regional architecture has been given concrete reality by a network of arrangements and processes that includes the East Asia Summit, the ASEAN Plus Three process, and an ASEAN that is transforming itself into an ASEAN Community. In all these processes, China is a major factor and Indonesia is a founding participant.

I fervently believe that it is about time that what we are doing for East Asia, we should now also do for the world. We can do it because today when China speaks, the world has no choice but to listen to its proven wisdom. And because ASEAN, of which Indonesia is a founding member, is the UN’s recognized partner in this part of the world.

To conclude, the world situation is calling upon us today to take decisive steps to make the world better for future generations. I have no doubt that China will respond to that call because China is a great nation. Indonesia will respond because it is its constitutional mandate to do so.

By responding together, we take our strategic partnership to the highest level possible.

I thank you.