Indonesia Strengthens Global Economic Diplomacy to Tackle World Challenges

Jakarta, INTI - Over the past decade, Indonesia's economy has demonstrated solid performance, with an average growth rate of 5% per year and controlled inflation. Recent data from the Central Bureau of Statistics shows that Indonesia’s inflation rate for October 2024 stands at 1.71% year-on-year, still within the safe range set by Bank Indonesia at 2.5% ± 1%. This trend marks the end of a period of monthly deflation, signaling strong economic stability amid ongoing global challenges.

Despite this positive economic performance, Indonesia faces a variety of external challenges. Shifts in geopolitical dynamics, especially conflicts in Eastern Europe and the Middle East, along with global trade fragmentation, are affecting economic stability worldwide, including in Indonesia. In response to these challenges, the Indonesian government is proactively preparing measures to ensure that its economy continues to grow positively amid global uncertainty.

During the Kadin Indonesia Reception Dinner, themed "Strengthening Indonesia’s Diplomacy through Global Partnership and Collaboration," held on Friday, November 1, 2024, Coordinating Minister for Economic Affairs Airlangga Hartarto highlighted the importance of maintaining Indonesia’s economic stability in the face of global uncertainties. "We anticipate price volatility. The IMF reports that global output losses due to trade fragmentation could range from 0.2% to 7% of GDP," he noted.

As a strategic and growing nation in Southeast Asia, Indonesia is taking an active role in addressing global dynamics. Under President Prabowo Subianto’s leadership, the government focuses on economic and social equity through balanced international cooperation and an independent, active foreign policy. This approach allows Indonesia to pursue proactive, results-driven economic diplomacy, creating new investment opportunities and strengthening global economic integration.

Minister Airlangga also highlighted several strategic initiatives underway, including accession to the Organisation for Economic Co-operation and Development (OECD) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), as well as the full implementation of the Regional Comprehensive Economic Partnership (RCEP) and the Indo-Pacific Economic Framework (IPEF). Although the implementation process is challenging, Indonesia has ratified several pillars of IPEF, reflecting its commitment to deeper economic integration.

In addition to these international collaborations, Indonesia is accelerating negotiations in various free trade agreements, including the Indonesia–European Union Comprehensive Economic Partnership Agreement (IEU-CEPA). With the conclusion of these agreements, it is hoped that Indonesia can open new markets and create broader employment opportunities for its citizens.

Minister Airlangga also stated that Indonesia had attended a BRICS meeting and is exploring the possibility of joining this bloc. “With the implementation of all agreements in process, it demonstrates Indonesia’s commitment to pursuing an open, non-aligned economic policy that cooperates with all parties for the benefit and welfare of the Indonesian people,” he concluded.

The event was attended by notable officials, including the Minister of Investment and Downstreaming, Deputy Minister of Foreign Affairs, the Chairman of Indonesia’s Chamber of Commerce and Industry (Kadin), as well as ambassadors from friendly countries.