Paul Wolfowitz, Former US Ambassador to Indonesia, and Visiting Scholar, American Enterprise Institute: Interview

Paul Wolfowitz, Former US Ambassador to Indonesia, and Visiting Scholar, American Enterprise Institute

Interview: Paul Wolfowitz

While continuing on its path to reform, what key areas should Indonesia focus on improving?

PAUL WOLFOWITZ: Indonesia has undertaken significant economic and political reforms since my time as ambassador there 25 years ago, and is now the world’s third-largest democracy. That it has done so successfully is nothing short of remarkable. Just 15 years ago Indonesia was in the midst of an Asian financial crisis and the country’s real GDP had fallen by some 14% in real terms in a single year. Today, however, economic growth is hovering under 7% annually, with the country also looking forward confidently to democratic elections in 2014. While this is no small accomplishment, Indonesia cannot afford to sit on its laurels, as the progress of recent years has only whetted the nation’s appetite for further progress. Everyone seems to agree on at least two major challenges facing the country. One is the need to confront corruption that is holding back economic growth and affecting public confidence. To the government’s credit, efforts are being made to fight corruption and officials are being prosecuted frequently, though law enforcement alone is not the answer to the problem. What is needed might be called a “cultural change”, and this cannot happen overnight. At the same time, a new generation of Indonesian leaders are also emerging who understand the need to bring the country up to global standards of governance in this regard. Second, is the need to improve the country’s infrastructure and traffic, particularly in Jakarta. This may be a simpler problem to solve because it is not a cultural one, but there are significant legal and social issues, in addition to the need for physical investment. There is a third problem that concerns me, and I know that it concerns many Indonesians as well. That is the ability of extremist Muslim groups to operate with apparent impunity, intimidating people they disagree with and even, in the worst instances, burning churches and mosques of minority Muslim sects which they regard as heretical. I am not talking about terrorism. Indonesia has done a good job of fighting homegrown terrorists like the ones who perpetrated the bombing in Bali 10 years ago. But these violent extremists are a problem. Even though they are still only a small minority of Indonesia’s population, nonetheless they are a blot on the country’s mostly well-deserved reputation for religious tolerance and more needs to be done to bring them to justice when they break the law.

What role do you foresee for Indonesia in the wake of moves by China and the US to further assert themselves in the Asia-Pacific region?

WOLFOWITZ: China is looking for a greater role in the region, while the US seems to be pulling back from foreign commitments in general. Indonesia has, I believe, multiple roles to play in the unfolding future of the Asia-Pacific. First, the country is emerging as a leading player in the ASEAN group – 10 countries with a combined population that is roughly half of China’s – whose economies, for the most part have been growing steadily. Second, Indonesia may be able to play a constructive mediating role on issues between other countries. Lastly, the country should try to play an active role in keeping the US engaged in East Asia.

To what extent do you expect US trade relations in the region to benefit from resolving the Trans-Pacific Partnership (TPP) negotiations?

WOLFOWITZ: The TPP negotiations are one of the most creative initiatives that the Obama administration has undertaken in the Asia-Pacific region. A successful outcome would benefit the US considerably, alongside the other countries involved in the negotiations.

The significant challenge, of course, is resolving the key issues between the US and Japan. But I believe that a unified ASEAN approach could improve the chances of success if the ASEAN member states recognise the need to address protectionist forces in their own countries. If, however, ASEAN becomes another protectionist bloc, then that will not be beneficial for the TPP.

Anchor text: 
Paul Wolfowitz

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This article is from the Trade & Investment chapter of The Report: Indonesia 2014. Explore other chapters from this report.