INTRODUCTION

The Belt and Road Initiative (BRI) was first introduced by Chinese President Xi Jinping in October 2013. Initially, the proposal offers cooperation in infrastructure development covering the overland “Silk Road Economic Belt” and the sea-based “Maritime Silk Road”. Later the proposal has been extended to also cover non-infrastructure investment, including cultural ties and people-to-people exchanges. In recent years, BRI has become China's global banner for promoting its international position as the leader of open economic cooperation.

For developing countries that are keen to accelerate their economic development, BRI is seen as an opportunity to tap into China's huge financial resources and technological capability. Specifically, for Indonesia, a country that is currently embarking on massive infrastructure development, BRI is considered a good alternative financing source. In fact, Indonesian President Joko “Jokowi” Widodo, was among the seven heads of state from ASEAN to attend the inaugural BRI Forum in May 2017. Jokowi mentioned then that he wanted to see how Indonesia could benefit from BRI cooperation, and after the BRI forum, Indonesia proposed a list of projects for cooperation under BRI.

Despite this interest to participate in BRI, however, there is as yet no concrete BRI project agreed to between China and Indonesia. Also, both countries have different perceptions on what BRI projects are. While China considers all projects, including infrastructure projects and economic interactions as BRI projects, Indonesia only sees infrastructure projects started during the Xi Jinping period to be such. Since China perceives BRI cooperation as a totality of China–Indonesia economic interactions, this paper's discussion also touches on China's trade, investments, loans and tourism in/with Indonesia in order to provide a more complete picture.

While there have been a large number of analyses with regard to BRI, including its potential geopolitics and geostrategic impacts on countries along the belt route, there is not much analysis regarding how the countries in the maritime silk route perceive BRI. This paper aims to fill this gap by examining how different stakeholders (state, business, media and society) perceive BRI. It explains Indonesia's key interests in BRI cooperation, describes the proposals from Indonesia, and assesses how BRI cooperation will affect relations between the two countries.

The economic, political, strategic and cultural dynamism in Southeast Asia has gained added relevance in recent years with the spectacular rise of giant economies in East and South Asia. This has drawn greater attention to the region and to the enhanced role it now plays in international relations and global economics.

The sustained effort made by Southeast Asian nations since 1967 towards a peaceful and gradual integration of their economies has had indubitable success, and perhaps as a consequence of this, most of these countries are undergoing deep political and social changes domestically and are constructing innovative solutions to meet new international challenges. Big Power tensions continue to be played out in the neighbourhood despite the tradition of neutrality exercised by the Association of Southeast Asian Nations (ASEAN).

The Trends in Southeast Asia series acts as a platform for serious analyses by selected authors who are experts in their fields. It is aimed at encouraging policymakers and scholars to contemplate the diversity and dynamism of this exciting region.

The world's largest archipelago, lying athwart one of the world's major trade arteries, is an unlikely location for a single mercantilist or protec¬tionist nation-state. The much smaller Caribbean provides the closest comparison to Indonesia in terms of tropical archipelagos that are highly accessible to world trade, but it is divided among 14 sovereignties, heirs to the world's contesting powers. Even other centres of world trade without an archipelagic character, such as the Middle East and the Low Countries of Europe, have been marked by a plurality of commercial city-states or autonomous cities, morphing into a variety of competing modern states.

Throughout recorded history, the strategic location of the Malacca and Sunda Straits, and the alternation of monsoon winds carrying sailing ships between the Indian and Pacific Oceans, made the archipelago and pen-insula—Nusantara—a natural centre for mercantile city-states living by trade (Reid 2000). Its spices were the chief prize of the global maritime struggles of the fifteenth to seventeenth centuries, motivating explorers such as Christopher Columbus and Vasco da Gama to discover new sea routes to this part of the world. Despite the modern nationalist imaginings of the ancestral ‘empires’ of Sriwijaya and Majapahit, the fundamental reality of the region before 1650 was of multiple port-states competing to attract the world's traders. Yet somehow the idea of a state monopoly of trade developed very deep roots in this region, despite having to contend with a very different reality.

This idea seems to have taken deepest root in Imperial China. The curious fiction that China needed no external trade meant that for lengthy periods before 1567 the only form of international exchange the Chinese court would accept as legal was that associated with the so-called tribute missions from a few ‘barbarian’ kingdoms that were able to play this game. Those that did play it successfully—from Sriwijaya in the seventh to eleventh centuries to Pasai (northern Sumatra) and Melaka in the fif¬teenth—gained a kind of theoretical monopoly over the lucrative trade with China. Indeed, Chinese court records make it appear as though the only legitimate traders were those from the tribute-sending polities.

The 1997–98 Asian financial crisis was a turning point for Indonesia, as it was for many other East Asian countries. In addition to the economic consequences, Indonesia experienced dramatic political change, including a transition to electoral democracy and far-reaching government decen¬tralisation. In the post-crisis period, the average growth rate of real GDP per capita has been only marginally lower than during the two decades preceding the crisis, but the rate of poverty reduction has slowed signifi¬cantly. Something seems to have happened to make growth substantially less effective in reducing poverty. Simultaneously, Indonesia has experi¬enced a huge increase in measured economic inequality. The slowdown in the rate of poverty reduction per unit of growth and the increase in inequality can be viewed as quantitative aspects of the same distributional phenomenon, in which different segments of the population recovered from the crisis at widely divergent rates. What caused this to happen?

The present study marks the initial step in a research program in which the authors aim to explore competing hypotheses that might explain the change in the poverty–inequality nexus since the crisis. The hypothesis examined in this article relates to what we will call ‘anti-globalisation’: resistance to the increasing reliance on international trade that has been a characteristic of globalisation, with that resistance taking the form of tight¬ened restrictions on international trade. At the same time as inequality has increased in Indonesia, protectionism has also risen, both interna¬tionally and within Indonesia. We hypothesise that anti-globalisation has caused at least some of the slowdown in poverty reduction and increase in inequality. We will examine the extent to which the increase in protec¬tionism in the global economy, and within Indonesia itself, can explain the changes in economic outcomes experienced by different segments of the Indonesian population.

First, we discuss in more depth the slowdown in poverty reduction and increase in inequality experienced in Indonesia since the financial crisis. We then provide more detail on the rise of protectionism, both in the international economy and within Indonesia. Next, we describe the economic model used to analyse the effects of protectionism on poverty and inequality. Finally, we summarise the results.

HUMAN TRAFFICKING AND GLOBALISATION

Human trafficking is a global phenomenon. Like flows of financial resources and traded goods and commodities, flows of people in the form of international migration are rising, thanks in part to better transporta¬tion and communications technology. Labour migration from rural or remote areas to the cities or to major centres of production is part of this phenomenon. For poor, rural workers, labour migration can offer a path out of poverty. But for those who are deceived into working in other coun-tries, it may represent the worst form of labour exploitation and hence is one of the dark sides of globalisation (Jones et al. 2007: 108).

Globalisation can provide a road back to slavery if the movement of labour is not regulated, and if those regulations are not enforced. One form of exploitation of migrant labour is human trafficking. In Indo-nesia, human trafficking needs to be addressed not only through regional mechanisms such as ASEAN, but also though strategies to reduce social exclusion—because the most commonly targeted victims are the poor and those living on the margins of society.

Law enforcement agencies have not been able to keep up with the criminal networks that have arisen to take advantage of the opportuni¬ties for human trafficking offered by globalisation. Castells (2010: 172) says that ‘global crime, the networking of powerful criminal organiza¬tions, and their associates, in shared activities throughout the planet, is a new phenomenon that profoundly affects international and national economies, politics, security, and, ultimately, societies at large’. The global criminal networks base their management and production functions in low-risk places where they can control the formal institutions of state (Castells 2010: 173). Surprisingly, this is the picture in certain parts of Indonesia today.

This chapter analyses the impact of human trafficking based on find¬ings from East Nusa Tenggara, one of the poorest provinces in Indonesia. I argue that severe disparities between regions in Indonesia and lack of access to justice in peripheral areas have allowed human trafficking to take hold. Access is understood as ‘the match between societal commitment and institutional capacity to deliver rights and services and people's capac¬ity to benefit from those rights and services’ (De Jong and Rizvi 2008: 4).

INTRODUCTION

Since the 1970s, Southeast Asia has witnessed the emergence of religious resurgence amongst the Malays, popularly referred to as the dakwah movement. Essentially an urban phenomenon, it is manifested in a puritanical understanding and experience of Islam expressed in various domains of life, not excluding the Muslim law otherwise known as Shariah. While there has been considerable research on the problems of Shariah revivalism in neighbouring countries, the same cannot be said for Singapore, where the Muslims are subjected to the same laws as non-Muslims in all areas except in the domain of the family and inheritance. In these areas, the AMLA (1968), supplemented by the classical Muslim law, in particular the tenets of the Shafie school, bind them while non-Muslims are subjected to the Woman's Charter (1960). This chapter analyses the mode of thinking of Singapore's Shariah revivalist proponents based on their discourse. It argues that their imagination of the Shariah is not only alienated from the legal history and tradition of the community, but reflects and breeds exclusivist and dogmatic perceptions of Shariah which impedes prospects for the development of effective Muslim law, imperative for the well-being of Muslims and the wider community.

ISLAMIC RESURGENCE

Shariah revivalism is a major facet of the Islamic resurgence in Singapore that emerged about a decade after Independence amidst unprecedented social change induced by the process of development and nation building. For the Malays already mired in socio-economic problems under the colonial rule, adaptation to the demands of the new socio-political conditions proved highly challenging. Their stark socio-economic lag compared to non- Malays quickly drew the attention of scholars and community leaders alike who warned that their manifold problems did not bode well for the young nation as a whole.

In their attempts to alleviate the problems and propel the community's progress, the Malay elites constantly evoked religious values and cultural traditions, an effort reinforced by the government's emphasis on multiculturalism in its search for national identity. The turn to Islam as ballast for the community's socio-economic progress was neither novel nor unexpected given its strong influence on the lives of the Malays. However the potential of the religion in preparing and facilitating adaptation to the demands of modernization in the value sphere was impeded by the emergence of a religious experience strongly characterized by exclusivist, puritan and authoritarian traits.

In this chapter we discuss how international trade cooperation has influenced the process of globalisation in Indonesia. International trade cooperation here refers to the set of rules and institutions, binding and non-binding commitments, and principles and best practices that define the conduct of international trade, including the movement of goods, ser¬vices, investment and people. We evaluate the role of international trade cooperation in shaping both the reform process in Indonesia and, more generally, Indonesia's response to globalisation. We are interested in how the country has managed to balance the domestic political pressure for protection, on the one hand, against its role in international forums, on the other.

The chapter consists of five sections. In the first section we discuss the experience of Indonesia with globalisation. We then examine the role of international trade arrangements such as the General Agreement on Trade and Tariffs (GATT), the World Trade Organization (WTO), the Asso¬ciation of Southeast Asian Nations (ASEAN) and Asia-Pacific Economic Cooperation (APEC) in shaping that experience. Next, we highlight two cases in which trade facilitation has contributed to Indonesia's global eco¬nomic integration: logistics and tourism. This is followed by a discussion of the recent trend towards protectionism in Indonesia and its implica-tions for regional trade negotiations. We end with some conclusions and recommendations.

THE CASE FOR GLOBALISATION: INDONESIA's EXPERIENCE

Globalisation has benefited a large number of countries. As one of the East Asian ‘miracle’ countries, Indonesia achieved high and sustained eco¬nomic growth, reductions in poverty and improvements in equity during the period 1965–90 by maintaining an open trade and investment policy (World Bank 1993). Many developing countries were able to grow faster than the advanced economies, leading to a narrowing of the gap between the two groups of nations. Baldwin (2016), for instance, shows that the share of developed (G7) economies in world GDP has declined sharply since 1990, while that of six fast-growing industrialising countries (China, Korea, India, Indonesia, Poland and Thailand) has risen.

More open economies generally grow faster than less open economies. But openness needs to be managed. That is, to participate in the global economy, countries need not only to open their economies to trade, invest-ment and technology, but also to make supply-side investments to ensure that the benefits of openness are widely distributed. These investments include making sure that the country's population is equipped with the skills to take advantage of global opportunities, that there are social safety nets in place to manage the volatility that is inevitably associated with globalisation, and that the benefits are spatially dispersed.

Indonesia is an excellent laboratory for exploring these issues. After progressively disengaging from the global economy during the first two decades of independence, Indonesia has created a policy regime that has been broadly open since 1966. There were major and successful reform episodes in the late 1960s and the first half of the 1980s, and the economy and polity recovered surprisingly quickly from the deep economic and political crises of 1997–98. But the quotation above captures the central theme of this chapter: Indonesia continues to experience widespread ambivalence towards globalisation, and, as a result, the country is miss¬ing out on some of the opportunities available to more open economies.

In this chapter, we illustrate these issues by examining the links between Indonesia's policy environment and its export performance. In particular, as a case study we focus on the three most important footloose manufactured exports for most developing economies: garments, foot¬wear and electronics.

INDONESIA AND GLOBALISATION

An overview

It is a well-established empirical and theoretical proposition that, in times of growing world trade, more open economies generally grow faster than less open ones (Bhagwati 2004). Openness has also been central to East Asian economic success. All the high-growth East Asian economies adopted variants of the export-oriented development strategy, albeit with considerable variation from free-trade Singapore to the heavily managed Korean model of export orientation (Perkins 2013). At least until recently, these economies were able to achieve dramatic export success, in the context of a benign and increasingly open global economy in which the principle of multilateralism by and large held sway.

Since independence in 1945, Indonesia has sought to play a role in regional affairs proportionate to its size and location, while at the same time avoid¬ing involvement in the rivalries among major powers. This has become known as the ‘independent and active’ foreign policy doctrine of Indonesia. Territorial integrity and national security are two of the most important facets of the country's foreign policy. As early as 1957, as part of its Archi¬pelagic Outlook (Wawasan Nusantara) policy, the Indonesian government issued a declaration stating that all the waters surrounding and between the islands in the territory came within Indonesia's sovereignty. Although the declaration met with almost universal international condemnation at the time, two and a half decades later, in one of the country's best-known diplomatic and legal successes, Indonesia succeeded in having the ‘archi¬pelagic principle’ incorporated into the 1982 United Nations Convention on the Law of the Sea. This effectively gave legal and political support to Indonesia's territory as consisting of the islands, the intervening seas and the wider economic zone around the edges, thus greatly expanding the jurisdictional boundaries of the country.

With the ascension of President Suharto in the late 1960s, Indonesian foreign policy shifted from the confrontational character of the Sukarno years to an emphasis on close bilateral and multilateral cooperation, espe¬cially with other countries in the region. Post-Suharto governments have continued to stress pragmatism and good neighbourly relations, although national sentiment does flare up occasionally, sparked by incidents in which Indonesia's national pride has been ‘offended’ (mostly by Malaysia and Australia). As Anwar (2014) points out, pragmatism continues to act as a brake in most of these cases, preventing them from escalating into more severe conflicts. In summary, for the past half-century Indonesia has pursued a foreign policy that is geared towards protecting the national interest through cooperation rather than confrontation, through economic development rather than political adventurism, and through independ¬ent and active policy-making rather than alliances. The big question is whether such an approach to foreign policy still serves Indonesia well in dealing with the current regional and global dynamics, in particular the multiple territorial disputes in the South China Sea.

The world is finally recovering from the 2007–08 global financial crisis. After contracting sharply in 2009 and increasing slowly in the subsequent years, world real GDP growth returned to 3 per cent in 2017. Ten years after the crisis, it appears that growth is at last showing sustainable signs of recovery. Other challenges remain, however. Trade growth has slowed and, despite an improvement in 2017, remains lower than before the global financial crisis. The slowdown in trade growth has been attributed to cycli¬cal factors and to structural factors such as a lack of productivity growth and the maturation of global value chains. Protectionism is another factor, although, to date, it is not so much the increase in protectionist measures as the high level of uncertainty about trade policy that is affecting trade.

The policy uncertainty stems primarily from the perceived lack of ben¬efits from globalisation. Almost half the world's population—that is, more than 3 billion people—have to survive on $2.50 or less every day. The richest 10 per cent of the global population owns more than 85 per cent of the global wealth. Inequality has increased even in the countries where poverty has declined. These factors are widely seen as the main causes of the re-emergence of anti-globalisation sentiment around the world, prompting leaders to adopt populist and inward-looking policies. The electoral consequences have been surprising; they include the election of Rodrigo Duterte in the Philippines, the success of the ‘leave’ campaign in the Brexit referendum in the United Kingdom and the election of Donald Trump in the United States. Meanwhile, those in power show an increas¬ingly authoritarian inclination—Erdoğan in Turkey, Putin in Russia and Xi in China, to name a few—often by exploiting the public's misgivings about globalisation.

In Indonesia, the discontent with globalisation is apparent in rising nationalism, a rejection of foreign interference and a distrust of democracy that is reminiscent of the New Order. The disappointment with globalisa¬tion is not entirely unjustified. In Indonesia as in many other countries, globalisation has had both good and bad results. Trade always creates both winners and losers, and in the absence of a well-functioning com¬pensation mechanism and the free movement of labour across sectors, the winners appear to be concentrated disproportionately among a small number of elites. Corruption has only worsened this situation, allow¬ing the dark side of globalisation to dominate.

Protectionism and anti-globalisation are on the rise again. Protectionism has been rising since the global financial crisis in 2009, and populist and nationalist tendencies, especially in the United States, have escalated anti-globalisation to a whole new level. The World Trade Organization reported a significant increase in the number of trade-restrictive measures introduced by G20 countries, from a total of 381 in October 2010 to 1,671 in October 2016 (WT0 2016: 4). This is particularly worrying considering that trade growth has stagnated at the same time.

The vote in the United Kingdom in June 2016 to leave the European Union and the presidential election result in the United States in Novem¬ber 2016 caught everyone by surprise. In the former case, the popular vote to leave an economic bloc that has provided many benefits for the British economy was difficult to understand and seemed to run counter to the national interest. In the latter case, Donald Trump's promise to ‘make America great again’ by changing trading rules that he considered did not benefit the United States clearly struck a chord with many Americans. Since he came to office in January 2017, the United States has withdrawn from the Trans-Pacific Partnership (TPP), reopened negotiations on the North American Free Trade Agreement (NAFTA) and the Korea–US Free Trade Agreement (KORUS), unilaterally imposed tariffs on a number of products in the name of ‘fair trade’ and ‘national security’, and signalled that the United States will not abide by WTO rulings. More than any other country, China has been targeted due to its large trade deficit with the United States and its alleged theft of intellectual property rights. These events are indications of a contagious new populism and nationalism that may affect other parts of the world, especially with the retreat of the United States from being the champion of an open world economic order.

Indonesians had an ambivalent attitude towards economic openness even before the rise of the anti-globalisation movement in advanced coun¬tries. The increase in trade restrictions in Indonesia since 2001 has been referred to as ‘creeping protectionism’ (Basri and Patunru 2012; Patunru and Rahardja 2015).

There has been a shift in Indonesian political rhetoric on food policy over the last decade, away from food security (ketahanan pangan) and towards food sovereignty (kedaulatan pangan). This shift is not unique to Indonesia; it reflects a broader movement by activist peasant organisations around the world to emphasise sovereignty over security in relation to food. The way in which the concept is being interpreted and applied by political actors in Indonesia, however, is distinctive, in that it draws strongly on a perceived need to protect the nation—the bangsa—although not neces¬sarily the individual citizens within it.

This chapter examines the processes by which food discourses have been constructed, recast and deployed in Indonesia. The first section looks at the wider global discourses on food security and the second focuses on the history of food policy in Indonesia. The third section explains the more recent embrace of the concept of food sovereignty by the state and addresses the implications of this rhetorical shift for Indonesian food policy.

This discursive arena responds to the very real challenges that Indo¬nesia faces in terms of ensuring that adequate and nutritious food is accessible to a population that exceeds 250 million. The Food and Agri¬culture Organization has estimated that, in 2014–16, Indonesia had 20.3 million undernourished people (FAO et al. 2017: 89). Child malnutrition presents a critical and unresolved challenge for the country, with stunting affecting 37 per cent of Indonesian children aged under five in 2013, com¬pared with only 12 per cent across the entire East Asia and Pacific region (DKP and WFP 2015). Unlike many other indicators of food insecurity, rates of malnutrition have actually worsened in recent years, indicating that current policy is ill equipped to address key nutritional challenges. Patterns of food insecurity in Indonesia have a strong geographical dimen-sion: 52 of the 58 districts identified by Indonesia's Food Security Council (Dewan Ketahanan Pangan) and the World Food Programme in 2015 as ‘severely vulnerable to food and nutrition insecurity’ were located in the far eastern regions of Papua, Maluku and East Nusa Tenggara (DKP and WFP 2015). This raises serious questions about the scale at which food insecurity should be addressed.