From Bandung to BRICS: Indonesia's Role in the Global South with Gita Wirjawan - en

Let's start with the Russia-Ukraine war. It's quite ostensible that sanctions don't work.

The need for multipolarity, the need for the developing economies to have optionality...

The Zionist regime has been trying its best to change facts on the ground to make a real Palestinian statehood an impossibility.

The conviction with which that the actors of the genocide think that they can rewrite history is just utterly unacceptable.

Hello everyone, I'm Mohamad Mahdi and this is Insights in Focus.

We're recording this episode in Shanghai where I've been invited to attend the Global South Academic Forum

and I have a special guest with me from Indonesia; an educator, entrepreneur, music and film producer, podcaster,

and former Minister of Trade of Indonesia. Gita Wirjawan, welcome to Insights in Focus.

Thank you very much for making the time. Thanks for inviting.

So let's set the stage for our conversation. The past few years

have seen a number of significant wars and conflicts; not just military but also trade and economic ones.

If you allow, I'd like to start by discussing a few of them and getting your insights. Let's start with the Russia-Ukraine war

which was followed by sanctions on Russia imposed by many Western countries. But the situation in the Global South was kind of different.

Non-aligned nations like India and Indonesia have continued to purchase Russian arms and fuel.

Please elaborate on this and help us understand the situation through the Indonesian lens.

I think if we were to go back to the mid part of the 20th century, that was a time when the world went through a transition

from having fewer than 50 countries to more than 100 countries. And this, I think, was more punctuated in a city called Bandung in 1955

when leaders from a number of developing economies or newly established countries, inclusive of Zhou Enlai, [Gamal Abdel] Nasser, [Jawaharlal] Nehru and Sukarno,

made a public exhortation with respect to a few things; the first one of which would have been with respect to this anti-colonial, anti-neocolonial spirit.

Second would have been the need for peace between China and the US. The third would have been the need for peace between India and China.

The fourth being the need for Indonesia to be able to consolidate its eastern parts. This was, I think, characteristic of the need for multipolarity,

the need for the developing economies to have optionality >> and it continued on; >> I see

as manifested in the non-aligned movement in 1961 hosted by Tito of then Yugoslavia

then in Indonesia's joining the BRICS on January 6 of 2025 alongside a number of other new members

inclusive of Iran, Ethiopia, Egypt and United Arab Emirates. >> We're going to talk about that later in this episode. So...

but I think it's clear as the fragmentation of the world is occurring

and flash points occurring in a number of places. It's quite ostensible that sanctions don't work, right?

And, you know, depending on which side of the argument you are, but I think... >> What works? >> what works, I think, is a collaborative effort

in terms of sending goods and services in terms of creating peace and stability

in terms of ushering this new polarity, I mean multipolarity. Now in the absence of peace and stability,

the developing economies, call it the Global South, which really represents 84% of humanity from a population standpoint...

We're talking about around 7 billion people here. >> Exactly.

>> I think they have the need to put food on the table because they earn less than $13,250 per capita per year.

And for that to happen, they need to attain technological capital and economic capital from anywhere, right? >> Mhm.

>> So, I think what's occurred in Ukraine is unfortunate on the back of insecurity within, you know, one side of the argument

with respect to the expansionist, you know, behavior of the other's — NATO but also as it relates to your other part of the question

in terms of how countries like Indonesia should be, you know, buying goods and services whether it's from Russia or any other place

that's part of the inherent optionality that the Global South, I think, has earned and I think needs to preserve going forward

especially given the increasingly unilateralist behavior in the West >> Exactly! >> Yeah!

>> Yeah and as we witnessed, actually, the US tried to bully India not to do business with Russia and they failed.

So, my next question: Another major war was the Israeli war against the Palestinians in Gaza and the genocide, the real impacts of which is still unknown.

We know that the general public in Indonesia has been very supportive of the Palestinian cause and vocal against the genocide.

We also know that the government has firmly stated its policy of no relations with Israel until the regime recognizes Palestinian statehood.

Something else we know is that the Zionist regime, which many rightly described as an expansionist settler-colonial project,

has been trying its best to change facts on the ground to make a real Palestinian statehood an impossibility.

So, please explain to us: what is the view in Jakarta? Is the government there really thinking that this regime would allow this to happen?

Well, I think it's a presumption that the Indonesians alongside many other parts of the world are very much against the genocidal, you know, observation that's happening in Gaza.

It's completely unacceptable. But I think what needs to be recognized is that

the conviction with which that the actors of the genocide think that they can rewrite history is just utterly unacceptable.

I think the leadership of Indonesia President Prabowo has been very unequivocal about ushering a two-state solution narrative

and this is consistent with the past and that's not going to happen without I think...

>> with all that I explained, do you think that the two states is really going to happen? In Israel, this is not what they want.

Well, it goes back to the earlier reference, right? The conviction with which that they think they can rewrite history is utterly unacceptable.

And this is, I think, foundationally on the back of what seems paradoxical. Ever since the end of the cold war, I think,

the Americans have been embarking on this campaign or rather ill campaign to spread liberal values, including morality, right?

which is really counter or contrary to whatever we're witnessing in Gaza. >> Exactly! >> Right?

But the continuing support, you know, by the West or the Americans with respect to the genocidal observation

is just not reconcilable with this intention or campaign to spread democratic values around the world. I'm of the view that I think the pulse of the public, you know,

is increasingly divergent with policy postures, right? And I think at some point that pulse which is not in favor of what's happening in Gaza

>> and they're going to have their say >> will resonate to policymaking which hopefully will entail recalibration.

>> The reason I asked this question was because, a few months ago, there were some news coming from the Israeli media saying that

the president is going to visit Israel as a sign of breaking the ice and stuff and then there were... >> That didn't happen...

>> Of course that didn't happen so the policy is going to stay the same? >> Correct >> Okay! Good! So um...

>> But I think it's important to assert that President Prabowo, I think, has always asserted a thousand friends and zero enemies.

That's philosophically, I think, inherent within his, you know, governing and he wants to make sure...

>> Is it possible to have zero enemies? >> Well, you know, depends on whether

you're realist and whether we're talking about a short time frame or long time frame. I'm sort of like a long-time frame type of person.

I do believe that recalibration will inevitably take place and if I take the long view, I look at it with optimism,

but at the moment we are going through an episodic stress that, I think, many people around the world are feeling very uncomfortable with.

>> Okay. So, the other war that we've been witnessing is the US trade war; not just against China, but against much of the rest of the world.

How has Indonesia been receiving and responding to the shockwaves from this war? And what are the plans for the future?

>> Well, I think the Indonesians and the Indonesian government recognize that whatever is happening with the United States is episodic.

It may be construed as a capitulation in the context of how the trade was resolved at 19%.

But I think the Indonesians and many people around in Southeast Asia have the ability to take the long view.

The long view means that whatever is happening is episodic and this will be followed by a recalibration.

But in the meantime, we're looking elsewhere. We're looking into BRICS, as with you,

we're looking into diversification into other parts of the world. And this, I think, is characteristic of Southeast Asia which inherently has optionality.

But that optionality has to be clear in that for Southeast Asia to move up the value chain,

for Southeast Asia to move up the global geopolitical order, it needs to tap into technological capital allocation,

economic capital allocation, efficiently. >> Mhm.

>> Which is more effective, which is more efficient, which is cheaper, which is better.

And I think, at the moment, China clearly has shown and will likely show to the rest of the world that it's become a technological capital allocator in a much more cost-efficient, cost-effective manner.

That, I think, will resonate more increasingly to the Global South, including Indonesia, including many parts of Southeast Asia,

including Iran, including other parts of the world. >> Okay. So, talking about the BRICS;

in the midst of all these wars and conflicts it was in January of this year that Indonesia formally joined the BRICS bloc,

a counterweight to the West where calls are growing for a common currency. If you please tell us what you see as the potentials in this bloc for the members

and my next question is: do you think this common currency could become a reality?

>> Well, I think the participation of Indonesia in BRICS is a natural extension of what happened in 1955, what happened in 1961,

thereafter until today. Right? It's the expression of a developing economy

that will better refine and define multipolarity, right? And it's even more pronounced because of that unilateralist posture from the US. Right? First!

Second, I think as it relates to... I forgot the other part of the question. Can you just briefly... >> the common currency?

>> The common currency really relates to de-dollarization, right? The dollar has been a very dominant currency >> For so long

>> because, you know, they've been printing and they've been using other means to make sure that whatever they've printed is being utilized.

And if we take a look at the landscape today, the renminbi, ever since China joined the Special Drawing Rights,

occupies no more than 5% of the total SWIFT landscape. The dollar about 40% to 49%. Euro in the 30s, yen 20s to 30s.

So the shift from a pre-existing dollar dominance to call it a non-dollar dominance, call it a renminbi-driven... >> Already happening?

>> not happening yet to the scale that perhaps the BRICS might want. but it depends on time frame, right?

I think the increase from that 5% of the renminbi occupation of the SWIFT landscape will depend on several factors:

the first, I think, is the degree to which China will be able to project technological capital because whenever China allocates technological capital

it has to be accompanied by economic capital and that economic capital is going to be denominated in their local currency. Right?

>> Exactly! >> But the speed at which that technological capital is allocated

to call it the Global South or other parts of the world will depend on the recipient's ability to promote rule of law, number one, structurally.

The second to promote and increase the ability to translate from uncertainties to risk. Unfortunately many members of the Global South don't have the necessary ability to translate

from unknown unknowns, call it uncertainties, into known unknowns, call it risk

that can be priced, that can be measured, that can be predicted, that can be quantified. Now, that I think depends on the degree to which you invest in STEM,

which Iran is great at, which unfortunately many other parts of the Global South are not great at yet.

China has been dogged in investing in STEM. They produce 4 to 4.5 million STEM products per year.

India 2 to 2.5 million STEM products per year. Southeast Asia only 750,000 STEM products.

At that rate, it's not going to be able to receive capital allocation technologically or economically to the scale it aspires.

So, this is, I think, an impediment that could be and that needs to be remedied if you want to see China being able to help de-dollarize.

>> Mhm. >> That's the first. The second, really, is the degree to which China is going to be able to popularize the renminbi

for purposes of de-dollarization. And it relates to the psyche on the ground

whether people in your country, my country, other countries are comfortable with trading, transacting in Yuan or renminbi.

That is not there yet. And I think it will take... It's happening,

but it's not happening at the kind of scale and speed that we would have, you know, anticipated. >> Okay.

So, as an Iranian, I'm curious about the ties between my country and the great nation of Indonesia;

the fourth in the world when it comes to population, with an amazing rich mix of ethnic, cultural, and religious diversity.

What do you think the untapped potentials are that need to be explored? A lot, in short.

But, as I said earlier, our President, President Prabowo has clearly unequivocally articulated the zero enemies, one thousand friends.

Number two, he has made the decision to join the BRICS alongside Iran. These two, I think, are only naturally going to translate into

a deepening of bilateral, you know, relations or relationship which hopefully could capitalize upon the pre-existing complementarity of the two countries, right?

You've mentioned diversity, Indonesia's being the fourth largest population, Indonesia's being the third largest democracy,

Indonesia's being the largest moderate Muslim country in the world. There are a lot of similarities but there are also a lot of complementarities.

I think the similarities and the complementarity between Iran and Indonesia will dovetail into further deepening between the two countries.

>> Mhm! And my last question: you mentioned how the countries in Southeast Asia need to do a lot more.

So focusing on Indonesia, looking ahead to 2030, if you could influence one major shift in Indonesia's trajectory,

be it economic, social, environmental, etc. What would it be and why? >> Well, Indonesia's impediment is not unique

when compared to the impediment of other members of the Global South, other members of Southeast Asia.

It's the lack of energy, the lack of electrification. The electrification of Indonesia and many other members of the Global South

is only around 1,000 kilowatt-hours per capita. >> Mhm. >> Indonesia is at 1,300 but

many other members of Southeast Asia are at that level if not below. Singapore and Brunei are at 10,000 kilowatt-hours per capita

similar to that of China, Japan, Korea, the United States, typical developed economies, right?

So the aspiration for countries like Indonesia is to have more electrification because that's the structural key for modernization.

>> Mhm. >> Without electrification, you can't do much, right? But to get there, I think, you need technological capital and economic capital.

How do you get there? I think we need to invest more foundationally in educational attainment.

>> Mhm. >> The educational attainment, I think, is something that could get much better.

And you put that in the context of Southeast Asia, the educational attainment divergence also doesn't help.

>> Mhm. >> It has correlated, in my view, to the economic attainment divergence.

You've got Singapore that's at $91,000 per capita per year. You've got Indonesia at 5,000, Malaysia at 12,000,

Philippines at 4,000, Cambodia, Laos, Myanmar at sub $2,000. That economic divergence will not help Southeast Asia

in dealing with global challenges that are moving at a much more exponential rate as they relate to geopolitics, technology, economics and climate change.

So I think fundamentally we need to increase the educational attainment, decrease the educational attainment divergence and energize.

That's something that, I think, Southeast Asia will try to work on very proactively going forward. >> Okay. Thank you. Thank you very much.

Thank you again. Have a good time. Bye for now. >> Thank you.