Indonesia Salutes Obama's New Term With Optimism

By Pitan Daslani & Ezra Sihite 24 January 2013

The start of US President Barack Obama’s second term in office has been greeted with guarded optimism in Jakarta, with analysts and politicians alike predicting there will be no radical changes in Washington’s policy toward Southeast Asia. But economists say Obama would at least guarantee the continuity of US-Indonesia business and economic partnerships.

Indonesian Foreign Minister Marty Natalegawa praised Obama for refocusing America’s attention on the Asia Pacific.

“We hope relations between Indonesia and the US will only become stronger during his second term,” he said at the State Palace on Tuesday.

Indria Samego, political expert from the Indonesian Institute of Sciences (LIPI), said Obama’s second term would not see Washington making any radical changes in its policy toward Asia because under present circumstances, the US president would give greater priority than ever before in addressing domestic economic problems.

“And do not be misled to interpret Obama’s re-election as [an indication for] radical changes [in US policy] toward Indonesia,” he said. “Obama will not launch any cooperation that would specifically benefit only Indonesia, because he needs to give priority to his own country—be it in economic or political areas,” despite his emotional relations with Indonesia where he spent part of his childhood, Samego added.

He said that based on the observations he made at LIPI, the past four years of Obama’s presidency did not bring as many results as had been expected by the Indonesian public, with whom the US leader is hugely popular.

As president of the United States, Obama must bow to the US Constitution, Samego said, instead of being pro-Indonesia simply because he happened to live here for a few years.

But the good thing about Obama’s second term, he went on, was that US-Indonesia relations would remain as good as ever, so there was little to worry about.

Obama won 284 of the 538 electoral votes in November, defeating Mitt Romney in a spectacular battle of campaign strategies and political acumen.

For the Indonesian central bank, Obama’s second term is expected to have a positive impact on Indonesia, provided that the US president can swiftly resolve the “fiscal cliff” problem and Indonesia can tap the momentum before other problems emerge.

But Perry Warjiyo, Bank Indonesia’s executive director for economic research and monetary affairs, said that any positive impact on the Indonesian economy would be part of the expansion and improvement in the global financial markets.

Perry said he hoped the US fiscal cliff issue would be settled comprehensively this year because that would determine the speed of American recovery that would impact this part of the world.

This has to do with two issues at the same time: spending cuts and tax incentives. The state of the US economy depends on these two issues, Perry said, adding that whether Obama’s policy on this could encourage sustainability of financing that would impact the global economy was what Indonesia was waiting to see.

But he expected the US economy to grow more than 2.1 percent while the global financial markets would be influenced a great deal by further US quantitative easing. These developments, positive growth and the increase of liquidity in the financial sector will bring forth a positive sentiment to the global markets from which Indonesia can benefit, Perry said.

Tantowi Yahya, a legislator from the foreign affairs commission at the House of Representatives, said Obama’s second term was a good opportunity for Indonesia, in the sense that bilateral relations could be elevated on every front.

“Our greatest task ahead, now that Obama has [begun his second term], is to make sure that the two countries can become closer not just as good friends but as good partners as well,” he said.

“A good friend will always say ‘yes’ but a good partner sometimes say ‘no.’ Who says America does not need us? We need to be smarter.”

Ito Warsito, president director of the Indonesia Stock Exchange, welcomed Obama’s second term as a development that would benefit Indonesia.

He said that during Obama’s first term, there had been a continuous inflow of foreign capital into Indonesia and this had significantly bolstered the composite index over the years.

Obama’s second term will also become a solid guarantee for continued US imports of Indonesian products and therefore this will lead to further expansion of domestic economy, Ito said.