Four Game-Changing Events That Will Affect Indonesia Into the Next Year

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Four Game-Changing Events That Will Affect Indonesia Into the Next Year
Yohanes Sulaiman | December 18, 2012

Some of this year's top events which will impact Indonesia in 2013 include the Asean summit, Bo Xilai, Nicolas Sarkozy and Barack Obama.

With the end of 2012 (and maybe the end of the world) fast approaching, here are four important international events from this past year that will have profound implications for Indonesia in 2013.

Bo Xilai Saga

The arrest and persecution of Bo Xilai, who was once the party leader of Chongqing and seen as a key candidate for membership of the elite Politburo Standing Committee, caused a major ripple within China but also had international repercussions.

Within China, Bo’s arrest put a glaring spotlight on the massive corruption and power abuse by party officials. It also further decreased the public trust in government, which already took a hit after the officials’ botched handling of the Wenzhou train collision in 2011. That was where two high-speed trains collided, leaving 40 dead and almost 200 injured, and the government ordered the media to write “positive” stories about the accident.

The revelations of Bo’s crimes caused further backroom struggles in the months preceding the 18th National Congress of the Communist Party of China, where the country’s leaders for the coming decade were chosen.

The resulting jitters over the scandal and overall public attention focusing on the case caused Chinese officials to take a much harder line in handling international disputes than they otherwise would. Thus, China took a more belligerent stance over the Senkaku/Diaoyu islands dispute between Japan and China and in its South China Sea dispute with — primarily — Vietnam and the Philippines. Now, it has become much harder for China to back down, due to the fear of public repercussions.

It is hoped that the election of Xi Jinping as the general secretary of the Chinese Communist Party will allow China to cool the tension but with so many issues already on Xi’s plate, he might be tempted to keep the tension up as a distraction from growing internal problems.

Asean Summit Failure
Despite Foreign Minister Marty Natalegawa’s efforts, the Association of Southeast Asian Nations was not able to issue a joint declaration at the July summit in Cambodia — a failure that casts a long shadow over the future of Asean.

Not only did the failure to issue the expected joint statement expose the political discord behind the facade of harmony and unison, it also brought into question the commitment of Asean member states to the Asean project. It is now unclear whether the members would put the region’s interests over their own short-term interests, especially in the field of security issues.

The failure also shows Beijing’s growing influence in the region and its willingness to force Cambodia, with whom it has a very close relationship, to advocate its interests to the detriment of Asean unity This allows the United States to continue its policy of increasing its presence in the region to, some say, help contain China.

Brunei, which will assume the chairmanship of Asean next year, will have the unenviable task of trying to patch the broken trust between members, satisfying the competing concerns of Hanoi, Manila, and Phnom Penh, while balancing the interests of the United States and China in the region.

Fall of Sarkozy

Angela Merkel, the chancellor of Germany, and Nicolas Sarkozy, the president of France, might not like each other personally, but they did realize that they both needed each other and were willing to work together to reform both the French and the European economy.

This understanding created the “Merkozy alliance” that further helped calm the jittery market, by giving credibility to any economic decisions made by Brussels, notably the insistence to Greece, Italy and Spain to get their act together. For Merkel, Sarkozy provided the all-important French backing that enabled her to force the three states to reform their economies. At the same time, Sarkozy managed to steer Germany into toning down demands that might be politically unpalatable back home.

Thus, the defeat of Sarkozy in the French presidential election robbed Merkel of a reliable partner and at the same time threatens the important Franco-German unity needed to navigate the European Union further in treacherous economic currents. France is also seen as no longer committed to reforming its dysfunctional economy — hurting its competitiveness — let alone forcing the troubled economies to stick to much-needed reforms.

While Europe might not be as economically important as years ago, it remains a major player in the global economy, and bad news about Europe in 2013 will have global implications.

Obama’s Re-election

The good news about Barack Obama’s re-election as president of the United States, is that the country will surely pay more attention to Asia in the next four years. This means stronger military and economic engagements with Indonesia and its neighbors, and more pressure on China to temper its belligerent stance.

However, Obama’s re-election means that the US is on course to implement the controversial Obamacare health package, which many argue will hurt still-struggling US businesses and US economic growth. With the US no longer able to provide an engine to pull the global economy from its slump, coupled by the systemic weakness of the European Union and the rising concerns about the Chinese economy, 2013 might not be a good year for global economy — and emerging nations like Indonesia.