Indonesia, Southeast Asia’s largest economy, has made significant progress both economically and geopolitically, with discussions about possible membership in influential international organizations such as BRICS and the Organization for Economic Co-operation and Development (OECD). is increasing.
The BRIC group includes Brazil, Russia, India, and China, and has been expanded to include South Africa to form BRICS, a group of emerging economies that challenge traditional world powers. In contrast, the OECD is a forum for high-income countries to coordinate policies and promote sustainable growth. Joining these organizations could cement Indonesia’s status as a global economic power. However, this journey is not without its challenges, including domestic governance issues, economic inequality, and environmental sustainability. This essay analyzes Indonesia’s candidacy by assessing its economic potential, social progress, and obstacles that must be overcome, and provides recommendations to strengthen its global integration.
Indonesia’s economic potential and the case for joining BRICS
Indonesia’s economic trajectory makes it a top candidate for BRICS membership. As of 2024, the country’s gross domestic product (GDP) is expected to reach $1.43 trillion, ranking it the 16th largest economy in the world and the largest economy in Southeast Asia. The country consistently generates a We have experienced GDP growth of ~6%. Renewable energy technologies such as electric vehicles.
Geopolitically, Indonesia’s strategic location at the crossroads of the Indian and Pacific Oceans allows it to control important maritime trade routes. As a founding member of ASEAN and an active participant in the G20, Indonesia has demonstrated its ability to navigate complex multilateral frameworks. Including Indonesia in BRICS would enhance the group’s legitimacy as a representative of the Global South and foster cooperation among emerging economies.
Nevertheless, challenges still exist. Although Indonesia’s economy is strong, it is considerably smaller than the economies of leading BRICS countries such as China and India, whose GDPs exceed $14 trillion and $3.7 trillion, respectively. Moreover, the anti-Western rhetoric sometimes displayed by the BRICs may conflict with Indonesia’s non-aligned foreign policy, which seeks to maintain balanced relations with both the West and the Global South.
Indonesia’s social progress and aspirations for OECD membership
Indonesia’s aspirations to join the OECD demonstrate the country’s commitment to aligning with global standards for economic and social development. Under President Joko Widodo (Jokowi), recent reforms have focused on improving the business environment, particularly through the landmark Omnibus Law on Job Creation (2020), which streamlines regulations and increases foreign investment. There is.
The ongoing construction of the new capital, Nusantara, further demonstrates Indonesia’s modernization efforts. Social indicators also reflect this progress, with literacy rates rising to 96% and the proportion of the population living below the poverty line falling to 8.5% in 2024. Indonesia is also committed to sustainability and has committed to achieving net-zero emissions by: 2060 will be driven by growth in the renewable energy sector.
However, major challenges remain on the path to OECD membership. Governance issues remain, as evidenced by Indonesia’s 96th place in Transparency International’s 2024 Corruption Perceptions Index. Income inequality is another concern, with a Gini index of 38.2 indicating significant wealth inequality. Additionally, while Indonesia has made progress in renewable energy, issues such as deforestation and reliance on coal-fired power plants have undermined its environmental credentials. These challenges highlight the need for structural reforms to meet the OECD’s rigorous policy standards.
Issues and challenges in global integration
There are many obstacles to Indonesia’s integration into BRICS and the OECD. In the country, despite significant investments, infrastructure deficiencies still exist. The rapid development of urban centers like Jakarta contrasts with the underdevelopment of rural areas and limits equitable growth. Educational disparities further impede the development of human capital, with access to quality education skewed towards urban populations. Politically, it is essential for Indonesia to ensure the continuation of economic reforms such as infrastructure development and investment-friendly regulations, alongside a stable foreign policy framework, in order to advance its global integration aspirations. be.
Indonesia faces a delicate balancing act on the international stage. Joining BRICS could strengthen its influence in the Global South, but aligning with the bloc’s anti-Western stance could strain relations with Western partners. Conversely, joining the OECD may require Indonesia to adopt policies that challenge its current economic model, such as stricter labor standards and less dependence on resource industries.
Environmental issues are serious. Indonesia’s deforestation rate, driven primarily by palm oil production, is among the highest in the world, leading to biodiversity loss and increased carbon emissions. Meeting the environmental expectations of the OECD and BRICS will require a shift to sustainable agricultural practices and significant investments in clean energy.
Benefits of BRICS and OECD membership
Joining BRICS and the OECD will bring significant benefits to Indonesia. Economically, BRICS membership will provide access to development finance and technical cooperation, particularly in infrastructure and renewable energy. It would also strengthen Indonesia’s bargaining power in global trade negotiations and provide it with a more influential voice in shaping international commerce.
OECD membership will enhance Indonesia’s reputation as a reform-oriented economy and attract increased foreign direct investment. The OECD’s policy framework could serve as a model for improving governance, education and environmental sustainability, and aligning Indonesia with best practices in these areas.
Geopolitically, membership in both organizations will strengthen Indonesia’s role as a bridge between developed and developing countries. As a member of the BRICS, Indonesia will be able to defend the interests of the Global South, while OECD members will be able to confirm their status among the major economies and increase their diplomatic influence.
Recommendations
To maximize the chances of successful integration, Indonesia should prioritize the following actions:
Strengthening governance: Increase transparency and reduce corruption through digitalization of public services and stricter enforcement of anti-corruption laws. Addressing inequality: Expand social welfare programs and invest in rural development to reduce wealth disparities and improve access to education. Accelerate environmental reforms: Implement stricter controls on deforestation, accelerate reforestation efforts, and accelerate the transition from coal to renewable energy sources. Maintain policy continuity: Ensure that ongoing economic reforms and infrastructure projects remain stable and consistent. Engage in multilateral diplomacy: Balance relations with both Western and non-Western countries in order to maintain Indonesia’s non-aligned foreign policy position.
conclusion
Indonesia’s pursuit of BRICS and OECD membership reflects Indonesia’s ambition to evolve from a regional leader to a global power. With its robust economy, strategic geopolitical position, and ongoing reforms, Indonesia has the potential to make significant contributions to both organizations. However, to ensure successful integration, challenges such as governance issues, inequalities and environmental sustainability must be addressed. By prioritizing structural reforms, equitable development, and sustainable policies, Indonesia can meet the expectations of BRICS and the OECD, while setting a precedent for other emerging economies seeking global recognition.
The opinions expressed in this article are the author’s own.
References
O’Neill, Jim. Growth Maps: Economic Opportunities in the BRICs and Beyond. Penguin Books, 2011. Soesastro, Hadi, Mbjarto. Indonesian economy: Towards a new era. Institute of Southeast Asian Studies, 2005. Hill, Haru, Siwage Dharma Negara. The Indonesian Economy in the New World: Creating a New Narrative. ISEAS – Yusof Ishak Institute, 2020.
