US VP Pence in Indonesia to boost trade, ease tensions | Asia| An in-depth look at news from across the continent | DW | 20.04.2017
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US VP Pence in Indonesia to boost trade, ease tensions

The trip marks the first key meeting between Indonesia and the new US administration under Trump, whose rhetoric on Islam has unnerved many in the world's most populous Muslim nation. Tensions also abound over trade.

US Vice President Mike Pence is visiting Indonesia as part of his 10-day Asia tour aimed at reassuring allies of Washington's commitment to the region amid worries about the future direction of US policy under President Donald Trump. 

After arriving in Indonesia's capital, Jakarta, Pence on Thursday held talks with President Joko "Jokowi" Widodo and Vice President Jusuf Kalla on a range of bilateral issues.

According to the Indonesian Foreign Ministry, the topics included strengthening economic and investment cooperation, maritime cooperation, counterterrorism, boosting mutual understanding of religious tolerance and the moderate values of Islam, and the sustainability of US involvement in the Asia-Pacific region, specifically in Southeast Asia.

Pence, flanked by his family, also toured the biggest mosque in Indonesia, which can accommodate up to 200,000 people, was designed by a protestant, and sits near a Catholic cathedral in central Jakarta.

The US leader then held an interfaith dialogue behind closed doors with representatives of the Christian, Buddhist, Confucian, Hindu and Muslim faiths.

Reaching out

Pence also praised Indonesia's democratic and religious values. "Indonesia's tradition of moderate Islam is frankly an inspiration to the world and we commend you and your people," he said. "In your nation as in mine, religion unifies, it doesn't divide."

The comments come a day after Jakarta witnessed the culmination of a vicious election campaign for governor that polarized the public along religious lines.

The city's incumbent Christian governor, who is also of Chinese origin, was defeated by a Muslim candidate with the backing of Islamic conservatives. The outcome is interpreted by some as a setback for the country's pluralistic values and a sign of Islamic groups' encroachment on politics.

Nevertheless, Pence's mosque visit and remarks are being seen as the most high-profile outreach to Muslims by the Trump administration, which has so far grabbed global headlines for its moves widely perceived as discriminatory vis-à-vis the community.

USA Wisconsin Trump (picture-alliance/ZUMAPRESS/S. Wescott)

'The perception that President Trump and his team are anti-Islam is widespread in Indonesia, as it is in most places in the Muslim world'

"The perception that President Trump and his team are anti-Islam is widespread in Indonesia, as it is in most places in the Muslim world," Gregory Poling, a Southeast Asia expert at the Washington-based Center for Strategic & International Studies, told DW.

"That is tragic given how hard the Obama administration worked over the last eight years to boost US soft power in Indonesia," he added, referring to the previous US administration under President Barack Obama.

At the government level, though, President Jokowi's administration, like others all over the world, is still trying to figure out how US policy would evolve under the Trump presidency. "But Jakarta remains cautiously optimistic," said Poling.

Trade discord

An array of tensions on the trade and investment front sap enthusiasm for closer economic ties.

A major irritation for Jakarta is the inclusion of Indonesia in the list of 16 countries against which the Trump administration launched an investigation for possible trade abuses.

Indonesia last year boasted a surplus with the US amounting to $13 billion, largely via exports of low-end manufacturing items such as garments and footwear as well as raw materials.

But the Indonesian Chamber of Commerce and Industry (Kadin) argues that this is a misleading statistic, pointing out that the US had a surplus in the service sector of about $3 billion.

Indonesien Jakartas Governeur Basuki Tjahaja Purnama (Reuters/Beawiharta)

Jakarta's Christian governor, Basuki Tjahaja Purnama, was defeated on Wednesday in a runoff election to lead the city by a Muslim candidate backed by Islamic hardliners

"Trade is not just the trade of goods, but of both goods and services. We want to find out how [the US] can develop the services that we need, while we also develop goods [to meet their demands]," Kadin chairman Rosan P. Roeslani was quoted by the "Jakarta Post" newspaper as saying.

Still, Indonesia has plenty of protectionist trade policies that disadvantage US exporters, say analysts.

"There is nothing wrong with the United States seeking to have grievances addressed, especially in areas where Indonesia might be in violation of WTO rules, but the devil is in the details," said Poling.

"Of course, it would have been more helpful to know details about what the administration considers 'trade abuses' and how it hopes to address them before publicly singling out countries."

The rhetoric emanating from Washington involving "America first" has also perturbed Indonesia, a country with simmering economic nationalist sentiments of its own. 

US firms have faced a tough business climate in Indonesia, with companies like Google and mining giant Freeport-McMoRan Inc. getting embroiled in disputes with authorities there.

Google's row concerns payment of back taxes and fines worth hundreds of millions of dollars, while Freeport's standoff with the Indonesian government over terms of a mining contract has crippled operations at its mammoth copper and gold mine in the eastern part of the country.

President Trump's company, the Trump Organization, also has business interests in Indonesia. The firm has plans to manage luxury resorts being built near Jakarta and on Bali, a Hindu-majority island and fabled tourist destination.

A level-playing field

"Next month, there will be a team that will discuss management of bilateral trade and investment based on a win-win principle," said Jokowi standing alongside Pence at the joint press conference after their talks.

Speaking after Jokowi, Pence said that Trump put a high value on US ties with Indonesia. But the vice president noted that the two countries must work together to eliminate trade barriers to ensure a level playing field for both American and Indonesian firms.

The US side wants to ensure that American companies have a degree of access to the Indonesian market that is proportionate to what Indonesian firms have with regard to the American market.

Despite the disagreements, observers say the relationship between Washington and Jakarta will continue to grow closer, and that is certainly what both nations interests would suggest.

"But that is not a foregone conclusion. This White House has not made Southeast Asia in general or Indonesia in particular a priority, in sharp contrast to the previous administration," said CSIS analyst Poling.

"It is possible that US engagement with Indonesia will focus only on counterterrorism cooperation and, maybe, South China Sea issues. That would amount to a retreat from the 'comprehensive' part of the Comprehensive Partnership the two countries inked in 2010."