Trade & Investment Policy

Strengthening Indonesia’s institutional capacities to coordinate and implement trade and investment policies

 

BAPPENAS, the central institution concerned with strategic planning, and the Ministry of Trade, the lead negotiator for the Indonesia-EU Comprehensive Economic Partnership Agreement (CEPA), are coordinating the two work streams of this priority area.

 

Support to the national development planning process

Support to BAPPENAS includes economic modelling and forecasting in collaboration with Oxford Economics with whom ARISE Plus Indonesia has developed two economic models, which allow BAPPENAS to assess the impact of external events on the domestic economy, trade and investment at national and provincial lever. More recent enhancements to the economic models include a range of energy and emissions variables relevant to climate and environmental policy.

With BAPPENAS and the Ministry of Investment BKPM, ARISE Plus Indonesia is developing an Indonesia-EU Investment Attraction Plan, which is focussed on priority themes of both economies: energy transition and the introduction of advanced technologies through investment mobilization. The objective of the Plan is to align Indonesia’s strengths in terms of investment offerings and investment opportunities to the strengths that are present in the EU in terms of innovative investors, clusters and centres of excellence.

Additional areas of work with BAPPENAS include Blue Economy, where ARISE Plus Indonesia has provided support to develop the Indonesian Blue Economy Index (IBEI) and conduct IBEI projections, in line with Indonesia’s target to become a high-income nation and top five economy by 2045. The IBEI consists of three main pillars: economic, social and environmental. One of IBEI’s aims is to monitor the performance of the blue economy sectors at the regional level. 

 

Support to FTA/CEPA through a Rapid Response Facility

ARISE+ Indonesia supports the CEPA negotiations through technical assistance in several areas, including Trade Negotiations, Trade in Services and Non-Tariff Measures. As the Indonesia–EU CEPA negotiations are well underway, ARISE Plus Indonesia has developed a comprehensive study to assess the potential impact of the CEPA on Indonesian trade, economic and social indicators. More importantly, the study also provides recommendations on how to maximise the benefits of this agreement.

ARISE Plus Indonesia is building capacity amongst Indonesia’s Ministry of Trade officials to conduct trade in services-related analyses in view of the ongoing negotiations and implementation of commitments, by specifically training trade officials in conducting quality desk research, to access and analyse information and data on international trade in services.

Also specific to Trade in Services is the development of six sector specific studies with the active involvement of MoT officers to help identify the constraints that make them uncompetitive and hamper their ability to effectively contribute to export growth and performance. Each study highlights important and urgent aspects to be addressed through the Indonesia-EU CEPA negotiations, providing possible negotiating approaches and strategies. The six sectors identified with the MoT based on their priorities are Maritime, Professional Services, Games and Animation, Higher Education, Computer and Related Services, and Environmental Services.
 
Intervention on Non-Tariff Measures involves training to develop impact analysis on NTMs and set up an institutional framework. Training includes assessments of the economic and trade impact of NTMs, including relevant analytical tools and economic modelling. The technical assistance will develop a methodology for reporting on NTMs in accordance with best practices at bilateral level, ASEAN and multilateral level and addressing possible disputes. 

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