Revisiting Indonesia’s Economic Diplomacy in the Age of Disruption: Towards Digital Economy and Innovation Diplomacy

Abstract

With the rise of digital technologies and innovation disrupting the economy, the global phenomenon challenged the current concept and strategies of “conventional” economic diplomacy that have increasingly gained importance in contemporary foreign policy, including Indonesia. In the meantime, the digital economy had been significantly growing as a potential driver of growth and an inclusive economy which becomes central in the Indonesian development agenda. A new or innovation-based economy such as the digital economy did not only become one of the priorities in national policies but also emerge to be an essential variable to the foreign policy of Indonesia amid diplomatic deficit. This research examines Indonesia’s economic diplomacy in optimizing the potential of digital and new economic activities in facing the challenges of digital disruption. By employing integrative diplomacy concept, this research argues that Indonesia’s government should pursue intermestic, comprehensive and integrative strategies in its economic diplomacy by integrating new economy through the construction of “innovation diplomacy.” This research finds that the existing economic diplomacy is strongly directed to “conventional” commercial diplomacy, while it gives insufficient space for a new economy to develop significantly, due to the absence of concept supporting the operation of innovation-focused economic diplomacy. Consequently, it is suggested that Jakarta urgently has to reconceptualize its economic diplomacy more strategically in order to achieve “diplomatic sophistication,” by way of constructing “innovation diplomacy” as a subset of economic diplomacy.

Contested Interpretations of Indonesia’s International Leadership in the Foreign Policy of President Susilo Bambang Yudhoyono and Joko Widodo

“…As far as Indonesia is concerned, the priority of pushing forward the agenda of economic growth in the post-pandemic era seems non-negotiable. In this context, it might be helpful to strategize new innovations in the conduct of Indonesia's economic diplomacy by recalibrating Indonesia's enormous potential in the rapidly growing digital economy in this region (Margiansyah, 2020). In interpreting the meaning of Indonesia's regional leadership in ASEAN, President Widodo never puts aside the fact that Indonesia is competing with other ASEAN countries especially in maximizing the economic opportunities that come along with the rise of China.…”

Analisis Perbandingan Hukum Penanaman Modal Asing Antara Indonesia Dengan Vietnam (Tinjauan Dari Undang - Undang No. 25 Tahun 2007 Tentang Penanaman Modal dan Law No. 67/2014/QH13 On Investment)

“…Menurut indeks Ease of Doing Business tahun 2020, laporan tahunan peringkat Bank Dunia tentang peraturan bisnis di 190 negara, Indonesia turun satu peringkat ke 73, jauh lebih buruk daripada Malaysia di urutan 15, Thailand di 27 dan Vietnam di urutan 69 (Acclime, 2020 Padahal, salah satu prioritas politik luar negeri Indonesia, khususnya pada masa pemerintahan Joko Widodo, ialah diplomasi ekonomi (Agastia & Perwita, 2015;Margiansyah, 2020;Winata, 2018). Dengan demikian, adanya dorongan untuk meningkatkan diplomasi ekonomi dengan tujuan untuk memperluas akses pasar luar negeri dan meningkatkan minak investor asing ke Indonesia dalam rangka untuk mendukung perekonomian dalam negeri dan mensejahterakan seluruh rakyat Indonesia (Delanova, 2020;Kurniawan, 2016;Margiansyah, 2020).…”

The Characteristics of Indonesian Digital Diplomacy

“…Technological innovation, such as social media, has been utilized by many MoFAs to fulfil various foreign policy objectives, such as analysing public opinion, combating disinformation or as a tool for information dissemination to reach a wider audience. The inability to adapt to current technological progress will leave any MoFA behind and make it difficult to take advantage of new opportunities, for example, an innovation-oriented economy or to simply face new situations in the future (Margiansyah, 2020;Bjola and Manor, 2020). This indicates that the Indonesian MoFA is trying to adapt and find the best understanding of digital diplomacy within the country's diplomacy.…”