Keynote Speech by
H.E. Dr. N. Hassan Wirajuda
Minister of Foreign Affairs
Republic of Indonesia

At a Seminar at
The Japan Institute for International Affairs

Tokyo, 28 August 2008

Mr. Chairman,
Distinguished Speakers and Participants,
Ladies and Gentlemen,
I am honoured and delighted to be with you today. A trip toJapan is always a special occasion for me. That is because I have
many friends here. And also because every time I come here, I learnsomething that makes me more confident about the future of the East
Asian region.
Let me therefore thank the Japan Institute for InternationalAffairs (JIIA) for organizing this event and inviting me to share mythoughts with you on “East Asia: Towards Regional Integration.”Indeed, there is no better way to commemorate the golden
jubilee of the establishment of formal diplomatic relations between
Japan and Indonesia than a discussion in depth on what our two
nations can do for each other and what we can do together for theregion in which we both are active and committed players.
Since half a century ago, Japan has always been one ofIndonesia’s closest and most important partners. Japanese investmentsbuilt up most of the economies of East Asia; the Indonesian economy
is no exception. Through Japanese investments and through official
development aid (ODA), Japan has been deeply involved in thesocioeconomic development of Indonesia. Our bilateral trade has
always been growing.
Japan has strongly supported Indonesia’s transition into a more
fully democratic system of governance. To cite just one example,
during the series of historic elections of 2004 when the Indonesian
electorate directly voted into office the country’s President and Vice
President, and members of Parliament, 20 election observers andtechnical experts came over from Japan to help.
Japan has been a true friend in good and bad times. The
Japanese Government and people were among the first and quickest to
respond when an earthquake and tsunami devastated our province ofAceh and the island of Nias. Japan was there to save lives and bringrelief to survivors. Japan is still there helping with the rehabilitation
and reconstruction of the devastated communities. That is friendshipin its purest form.

1And I am sure that friendship will grow stronger, with thesigning of the “Strategic Partnership for Peaceful and ProsperousFuture” in 2006. That partnership has taken our cooperation to ahigher and more comprehensive level. I expect it to form a strong
bond between our nations that will offer extraordinary opportunities toour future generations.
Fleshing out that partnership is the recent entry into force of the“Indonesia-Japan Economic Partnership Agreement (IJEPA)” thatfurther enlarges and strengthens our cooperation in trade, investment
and economic development.
What makes our relationship special is its freedom from thebaggage of the past. That is because we in Indonesia have taken apositive and practical approach to our relations with Japan. Thus weachieved an early and total reconciliation that enabled us to move
forward together on the road to progress, never looking back to thevagaries of history.
We must look intently, however, at the vagaries of the world welive in today. We are in a global situation in which non-traditional
threats to security freely mix themselves with traditional threats.
Hence, we still have to worry about the proliferation of weaponsof mass destruction and the constant possibility of interstate armed
conflicts. We must also come to grips with the reality of intrastate
conflicts, the possibility of pandemics, and our vulnerability to natural
disasters.
On top of all these, we must contend with an array of crises thathumankind is saddled with. The world financial architecture has beenin difficulties for some time. The world price of oil, although it came
down a few rungs in recent days, is still exceedingly high and canshoot to higher levels any time.
We are in the midst of a food security crisis, as nations havebeen neglecting agriculture. And, finally, there is the inconvenient
truth that global warming has been upon us for some time.
These are the global issues that Japan and Indonesia must
address on a bilateral basis and in concert with other nations.

2There is no doubt that although Japan is struggling to retrieve its
dynamism some two decades ago, it is still the world’s second largest
economy. As such, it can bear the crises as well as any highly
developed country and will certainly contribute to their solution. AndJapan remains politically stable.
This is not the case with several countries in Southeast Asia thathave been hard-hit by the crises. The ASEAN economies are expected
to contract from an average growth rate of 6.5 percent in 2007 to 5.7
percent this year. Malaysia and the Philippines are expected toconsiderably slow down from their 7.3 growth last year. As a group,
the growth of the economies of Cambodia, Myanmar, Laos andVietnam will stand still at seven percent.
The problem is compounded by political challenges theindividual countries are facing. Malaysia is in political turmoil and sois Thailand. The Philippines, so near to resolving its conflict with theMoro Islamic Liberation Front, suddenly must put out brushfires ofrebellion that can become a conflagration.
But the ASEAN region has been through a crisis before: theAsian financial and economic crisis of a decade ago that had profoundpolitical impact in Indonesia and Thailand. We weathered that crisis
not by turning inward but, on the contrary, by intensifying our
regional economic integration.
At the same time we deepened our engagement with our more
economically mature Northeast Asian neighbours—China, Japan andSouth Korea—through the ASEAN Plus Three process.
Today, with ASEAN transforming itself into a true Communitythat stands on economic, political and sociocultural pillars, withASEAN becoming a rules-based organization by virtue of its Charter,
and with the support of reliable dialogue partners like Japan, theASEAN region is in an even better position to weather any crisis.
Like the rest of the ASEAN family, Indonesia has not beenspared from the impact of the crises. Social tension rose to somedegree when we began lifting the fuel subsidy two and a half years
ago. Fortunately this has not led to political upheaval largely because
we spread out over time the impact of that painful but necessary
measure. We also gave direct financial assistance to the poorest sectorof our society.
3Moreover we are still meeting our energy needs. We areenjoying a surplus of coal—the price of which has risen sharply, to theadvantage of Indonesia. If you look at our total mix of energy sources,
we are producing the equivalent of six million barrels of oil per day.
During the past one and a half years, our agricultural exportsincreased in volume and in value. Our trade surplus last year was
US$37 billion. We are still going for a growth of 6.3 percent this year,
the target set by the Government. Our year-on-year growth during thesecond quarter was 6.4 percent.
So inspite of the global crises and the world economic
slowdown, we in Indonesia are by no means in bad shape. And if thecurrent trend holds, it augurs well for our democracy as we prepare fornational elections in the middle of next year.
The democratic electoral process, I am happy to tell you, isalive and well in Indonesia. We probably hold the record in thenumber of democratic elections held within a span of three years. We
had three national elections in 2004, and more than 280 local elections
since then. By 2009 all local officials will be directly accountable totheir constituent electorates.
Evidence of our political maturation is all over the country. In
Aceh, for the first time in 30 years, we have achieved durable peace,
which could finally deliver prosperity to the Aceh people.
In Papua, we have met the people’s aspirations for meaningfulautonomy by establishing the institutions for this purpose. We haveengaged them in a “new deal” that has allayed popular dissatisfaction.
The Papuans have also chosen their local leaders in free anddemocratic elections. Ample funds for development are flowing intoPapua.
As the country with the largest Muslim population in the world,
Indonesia has proven that Islam and democracy are not incompatible,
but can exist side by side, each reinforcing the other.
Political observers have noted that Islamic political parties inIndonesia are all moving toward the ideological centre, since that is
the only way they can improve their performance during elections.

4We have made our democratic transition. Our challenge now is
how to further consolidate our democracy, making it more effective indelivering stability and prosperity to our people.
It is our hope that as we regain our economic dynamism andachieve greater political stability, we will be able to contribute more to
the security, stability and prosperity of the East Asian region. We hopeto make that contribution largely through the dynamics of atransformed ASEAN.
Today ASEAN is in the final stage of its transformation into anASEAN Community resting on three pillars: the security, theeconomic and the sociocultural pillars. This means completing theintegration process by 2015 and addressing the development gaps,
political and economic, among its members. This means achievingsociocultural cohesiveness.
In all these efforts, the ASEAN Charter will serve ASEAN ingood stead. Once in force, the Charter will give ASEAN legal
personality, establish institutional accountability and enhancecompliance, and affirm ASEAN’s role as the driving force in East
Asian integration and a robust player in Asia Pacific affairs.
When ASEAN was newly formed, it took a learning process ofalmost a decade before the ASEAN countries acquired the habit ofdialogue and consultation not only among themselves but also withcountries and organizations that are their dialogue partners. In thebeginning there was even an unwritten taboo on discussing securityissues.
But at the Bali Summit of 1976, the taboo on security issues
was lifted with the signing of the Treaty of Amity and Cooperation(TAC) in Southeast Asia. And in the 1980s, ASEAN finally addresseda major regional security issue, the protracted conflict in Cambodia.
As ASEAN’s interlocutor, Indonesia organized the Jakarta
Informal Meetings (JIM) attended by the parties to the conflict andother interested parties. This was followed by a United Nations
process that culminated in the signing of the 1991 Paris Agreementthat led to the rebirth of the Kingdom of Cambodia.
Since then, two major intrastate conflicts have been settled inthe region. In 1996, a peace agreement was reached between the5Government of the Republic of the Philippines and the Moro National
Liberation Front, putting an end to two decades of conflict between
the two sides in southern Philippines. And in 2005, three decades ofseparatist rebellion came to a peaceful end with the signing of a peaceagreement between the Free Aceh Movement (GAM) and theGovernment of Indonesia.
Although ASEAN was not directly involved in either case, theASEAN spirit was clearly at work through Indonesia serving as
facilitator of the MNLF-GRP peace talks, and through theparticipation of ASEAN countries in the EU-led Aceh Monitoring
Mission that supervised the implementation of the GAM-GOI peaceagreement.
Now confident in addressing security issues, ASEAN
established in July 1994 the ASEAN Regional Forum (ARF) where its
foreign ministers can meet with their counterparts from countries thathave an impact on the security situation in the Asia Pacific. The aimsof the Forum are to build mutual confidence, carry out preventive
diplomacy and eventually “elaborate” on a dispute settlement
mechanism.
And also since then, ASEAN has grown to include ten countries
in Southeast Asia and the ARF has also greatly enlarged hismembership. Although the ARF has not moved much beyond
confidence building and preventive diplomacy, there is within
ASEAN an intensive dialogue on security and military matters amongits defence ministers.
And there is today within ASEAN, and between ASEAN and its
dialogue partners, a great deal of concrete initiatives in counterterrorism, in ensuring the safety of the Strait of Malacca, in fighting
non-traditional security threats and in the management and mitigationof natural disasters.
Also serving as a code of conduct governing relations among
ASEAN members and between ASEAN and external powers is its
Treaty of Amity and Cooperation (TAC) in Southeast Asia.
Signatories and acceding states renounce the use of force and bindthemselves to the peaceful settlement of disputes.
In 1997, ASEAN Plus Three was established in response to theAsian financial crisis. It has also served as a platform for East Asian
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countries to strengthen cooperation at various levels and in variousfields.
The ASEAN Plus Three Process gained such a momentum thatin 2004, ASEAN launched the idea of an East Asia Summit. To some,the East Asia Summit should comprise the ASEAN Plus Three
countries. But Indonesia pushed for a more inclusive idea of East Asia,
one that embraced India, Australia and New Zealand.
Thus ASEAN redefined the notion of East Asia so that it is nolonger just a geographical, racial or cultural entity—but an entity
formed over many years of habitual and intensive consultation andcooperation between ASEAN and its dialogue partners.
Not unlike Indonesia itself with its immense diversity of ethnic
cultures, the countries that make up the new East Asia are widely
varied, but are bound together and made one by a commonality of
purpose and values.
With this concept of a more inclusive East Asia, ASEAN
remains at the centre not only geographically but also in terms ofoccupying the driver’s seat in this important process.
Today ASEAN has embarked on a process of negotiating freetrade area agreements with six dialogue partners, which can lead to theestablishment of an East Asia free trade area by 2015. In a way, thiswill repeat the process within ASEAN soon after its founding in
Bangkok of using economic cooperation as the driving force of itsintegration. Thus the new East Asia will be consolidated first througha process of economic integration before it goes into a wider field ofcooperation.
Thus, during its forty one years of existence, ASEAN as aregional organization has fundamentally shifted the dynamics of theregion toward peace and security. And through its networking, it has
influenced the dynamics for peace and prosperity well beyond its
geographic borders.
Combined with its Northeast Asian partners, ASEAN serves as
the main pillar of the East Asia process. To the world, this must be avitally important process, considering just the geographic magnitudeof its coverage.

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ASEAN alone has a population of 567.56 million. Add that tothe aggregate population of Northeast Asia (China, Japan and SouthKorea), which stands at 1.498 billion, and you get a total of 2.065
billion or about one-third of humankind. And if you add to that thepopulation of India, Australia and New Zealand to get an idea of thepopulation represented by the East Asia Summit, you get well morethan three billion, which comes close to half of all humankind.
In terms of GDP, ASEAN has a total of US$1.072 trillion, witha GDP per capita of US$1,890. Combine that with the total GDP ofNortheast Asia, which is US$8.307 trillion, you get an East AsianGDP of US$9.38 trillion and a per capita GDP of US$4,540.
In terms of internal trade, intra-ASEAN trade totals US$304.89
billion or 24 percent of the aggregate trade of the ASEAN countries.
Put together the total internal trade of Southeast and Northeast Asiaand you get a total intra-East Asian trade of more than US$620 billion.
In terms of economic growth, China leads not only the East
Asian pack but the rest of the world as well. It has been estimated that
China will be the world’s largest economy by 2035.
Already a nuclear power with a military capability in outerspace and now building a blue water navy, China has doubled militaryspending in a span of four years. It is therefore important that China
remains firmly engaged with forums that are decidedly constructive inorientation, such as the ARF, ASEAN plus Three and the EAS.
The world should be glad that an even more confident China
has emerged from hosting the Summer Olympics earlier this month. I
imagine that a new infusion of Japanese investment will add to that
confidence and also prove rewarding to the Japanese economy. For aconfident China that knows and is eager for the rewards of economic
and positive political engagement is a tremendous force for East Asianstability and prosperity.
Two other participants to the EAS, South Korea and India, areworld leaders in technology, with South Korea already classified as adeveloped country and India being fancied as in a position to rival
China’s economic dynamism in a few years’ time.
In the midst of all these developments, Japan, which remains
the world’s second largest economy, must continue playing a pivotal
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role if East Asia’s stability is to be ensured and its potential for
dynamic growth is to be realized.
We in Indonesia realize that Japan is reviewing its pacifist postWorld War II constitution as it begins to shoulder more of the cost of
its own defence. This is perfectly understandable in the light of theface of the redeployment of US forces out of Japan at a time when noone is fully certain of the intentions of North Korea.
The time may be ripe for Japan to break from its long-held
pacifist posture but we neither expect nor wish Japan to go on an arms
race with China. We encourage Japan to constructively engage aconfident China.
At the same time, we urge Japan to engage more deeply with
ASEAN and contribute more to the security of the region—especiallyin the strategic sea-lanes of Southeast Asia.
We in Indonesia and the rest of ASEAN are eager to work withJapan and the other counries of East Asia in giving political coherence
to the many networking processes—mostly in the economic field andinitiated and driven by ASEAN—that are taking place in the region.
This is something that no individual country can achieve, but is verymuch attainable if we all work in concert.
If we can achieve this, we can hasten the march of history
toward the realization of an East Asia Community. Thus we will
ensure the long-term security, stability and prosperity of our region.
And thus we will be able to extend the positive influence of our East
Asia process to the world beyond our regional borders.
Then we can be sure that the work we are doing is a service toall humankind and to our future generations.
Thank you.

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