Indonesia fell smack in the middle of the Obama Administration’s much ballyhooed “Asia Pivot”, a wonderful image for the ramp up of engagement with Asia that it has demonstrated. The Administration is to be commended for both the symbolic and real commitments it has made to the region in general and Indonesia, specifically. One could argue that the “pivot” has been underway for a while: President Clinton shepherded the formation of APEC and created a mixed credit “war chest” to support US bids in Indonesia, and although George W. Bush was preoccupied with the Middle East, he still made time for the region and paid visits to Indonesia twice. When I think of the word “pivot” Wilt Chamberlain and Bill Russell come to mind; these huge basketball players would take a pass in the middle, fake one way, pivot off one leg and rise up for a layoff or, more often than not, a slam dunk. Just considering Indonesia alone, here’s the pivot move we witnessed in the past 2 weeks. Judge for yourself if it was a slam dunk or just a layup:
- The US hosted APEC in Hawaii, affirming our commitment to a rules-oriented trading regime in the Asia Pacific region. Although voluntary, APEC will be a catalytic influence in our more formal free trade attempt, the Trans Pacific Partnership. Although Indonesia says its not ready, it by and large viewed TPP positively.
- In Australia, Obama concluded an agreement with Australia to house 2500 Marines on a base in Perth (only 400 miles from Indonesia) on a rotating basis. With the US out of Subic/Philippines, this strengthens the US commitment to the region, checks any extra territorial designs of China, and puts disaster relief personnel close to where they are likely needed: Indonesia.
- A US President participated for the first time in the East Asia Summit held in Bali, Indonesia. Within one week, President Obama had significant face time with Asia’s leaders both on our soil and theirs.
- US is giving Indonesia 24 decommissioned F16’s and $750 million towards their reconditioning.
- Indonesia has qualified for US Millennium Challenge Corporation grants of $600 million focused on renewable energy projects.
- The US and Indonesia renewed a science and technology to increase the capacity to reduce the risk of natural disasters.
- Boeing signed an MOU with Indonesia’s Lion Air that could lead to its largest commercial order in the firm’s history: 237 737’s valued at $22 billion backed in part by US EXIM Bank.
- GE also agreed to sell 50 CFM56 engines to Indonesia’s state-owned airline Garuda for $1.3 billion.
- Caterpillar will build a new mining truck facility in Batam (near Singapore), investing $150 million
Its great to see private trade deals announced when a US President visits a country, but they are often in the works for months before and become part of the symbolism of “commitment”. The US cannot compete with the state capitalism of China which announced billions of infrastructure investments to help Indonesia and ASEAN “connectivity”, but it did what it could to put some teeth behind the good will of Obama’s November 2010 visit and made a strong statement of the connection between Asia and US jobs.