Over the past year, the Indonesia-Taiwan relationship has remained strong, but at the same time, it has been under the influence of the tension between Taiwan and China following US House of Representatives Speaker Nancy Pelosi’s visit to Taiwan. The Taiwan-China tension reportedly had an impact on not only Indonesian trade with China and Taiwan, but also Indonesian migrant workers staying in Taiwan. Despite this, Indonesia appeared to stick to its “one China” policy, given that it is increasingly dependent on China as its largest trading partner and one of its biggest investors.
In the midst of its commitment to not interfering in the Taiwan issue, Indonesia’s cooperation with Taiwan continued in various sectors this year. The year witnessed several developments in economic ties between Jakarta and Taipei. In the first six months of the year, Indonesia’s exports to Taiwan reached US$690 million, or 2.82 percent of Indonesia’s total exports. Taiwan is the eighth-largest export destination for Indonesia.
Investments are also on the rise. For example, Taiwan International Ports Corp and South Korea’s Busan Port Authority are to invest in container handling infrastructure in Indonesia to tap into its emerging market and younger workforce. The two port authorities, through their Indonesian subsidiaries, PT Formosa Sejati Logistics and PT Probolinggo Logistic Center, signed an agreement in October to develop container terminals, container yards and warehouses. Under the agreement, companies from Taiwan would also receive improved logistics services in Indonesia.
In September, Indonesian coal miner PT Indika Energy and Foxconn Technology Group launched a US$2 billion joint venture to make electric vehicles, batteries and energy storage in Indonesia. The venture would focus on manufacturing electric buses in its initial production, and might later move to produce electric trucks.
This month, Indonesia and Taiwan also signed a memorandum of understanding (MOU) on agriculture to expand their partnership. In August, several MOUs were also signed during the Indonesia-Taiwan Industrial Collaboration Forum: two on the Internet of Things, one on shipping and one on metal processing, as well as one MOU and one technical arrangement in industrial product design development. These MOUs would accelerate the development of industrial capacity in Indonesia and Taiwan.
Indonesia and Taiwan have put efforts into expanding their economic partnership. The following are some of the examples: the Indonesia Investment Business Opportunities Seminar held in Taipei in August, Taiwan’s participation in Trade Expo Indonesia, Indonesia’s coffee promotion at the Taipei International Coffee Show and tourism promotion at Tainan Tourism Table Top Business Meeting in June, as well as Indonesia’s promotion of its halal industry and participation at the Taiwan Culinary Exhibition in August.
The Indonesia-Taiwan Steel Dialogue was held last month, aiming to examine the progress of cooperation between the two in the steel sector. Over the past five years, the basic metals, metal products and non-machinery industrial equipment sectors contributed to 31 percent of Taiwan’s total investment in Indonesia. Until October, the total trade value between Indonesia and Taiwan in the steel sector was US$2.53 billion, an increase of 6.41 percent compared with the same period last year.
The limited political cooperation between Taiwan and Indonesia is no longer the case. A delegation from Indonesia’s House of Representatives and President Tsai Ing-wen (蔡英文) met in October. The delegation included Mardani Ali Sera of the Prosperous Justice Party and Asep Maoshul Affandy of the United Development Party. The visit was significant, because it was the first by an Indonesian legislative delegation since the beginning of the COVID-19 pandemic and it took place alongside Taiwan-China tensions.
Both sides expressed their commitment to deepen cooperation, especially focusing on how students, fishers and farm workers could be better trained in Taiwan.
Education has remained an important aspect of Indonesia-Taiwan ties. It is important to note that over the years, despite not having official diplomatic relations, academic exchanges have been the backbone of the cooperation between the two countries.
This year, Taiwan continued to offer scholarships to Indonesians through the Taipei Economic and Trade Office in Indonesia and the Ministry of Education, as well as Huayu Enrichment Scholarship for non-degree Mandarin courses. Several scholarship events were held across Indonesia this year.
Research collaboration was also carried out between the Indonesian Trade and Economic Office in Taipei, and the Research and Development Center for Smart Manufacturing at Chung Yuan Christian University.
Cultural ties continue to grow. The most crucial example was an exhibition entitled “Indonesia Tempo Doeloe III,” which was held at National Taiwan Museum’s Nanmen Branch in August. During the event, ethnic cultures from all over Indonesia were showcased through performances and clothing, while food, clothes and literature from Indonesia were sold at stalls.
Despite these positive developments, a few bad news also affected Indonesia-Taiwan relations this year. For instance, Indonesian instant noodles have been banned by Taiwan after they were found to exceed the maximum pesticide residue limit, and 12 Indonesian sailors went missing after their vessel sank off the Taiwanese coast.
It has also been reported that Indonesian workers in Taiwan have been under extreme pressure. Indonesian domestic workers and their working conditions have remained a crucial topic for Indonesian and Taiwanese governments.
There are about 350,000 Indonesian workers in Taiwan. Incidents involving the abuse of Indonesian migrant workers in Taiwan have been reported. Meanwhile, workers have worried about their safety and fate due to tension in the Taiwan Strait.
However, there was some good news as well, including Taiwan’s decision to increase the standard salary for migrant workers and remove agency fees. Starting from next year, Taiwan has also committed to training migrant workers.
Ties between Indonesia and Taiwan are expected to grow. Many agreements were signed this year and would be implemented in the coming years.
Moreover, Indonesian Minister of Finance Sri Mulyani recently said that, given that the situation in China has remained uncertain due to Beijing’s COVID-19 policy, Indonesia would like to draw investments from Taiwan.
The Indonesian government has also made it clear that Taiwan is more than welcome to invest in Indonesia’s new capital city project.
However, Indonesia’s close connections with China and its support for the “one China” policy would have the Indonesian government tread carefully when maintaining its relationship with Taiwan.
Muhammad Zulfikar Rakhmat is a research professor at Busan University of Foreign Studies, South Korea.
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