Obama's Cancellation of Indonesia Visit Could Have Implications for U.S. Interests, Trade

March 19, 2010 - 4:38 AM
Obama's decision not to go to Indonesia now could have implications for U.S. companies hoping to benefit from the country's rapidly growing energy market, an area China also is eyeing eagerly.
Obama statue, Indonesia

Students view a statue depicting President Obama as a boy, erected at the elementary school he once attended in Jakarta, Indonesia. The statue was originally placed in a public park in the city, but was moved in February after a public backlash. (AP Photo/Irwin Fedriansyah)

(CNSNews.com) – President Obama’s decision to postpone a visit to Australia and – for the third time – to Indonesia, to focus on the final push for health care legislation comes after a year in which administration officials have repeatedly contended that the U.S. is “back” in Asia after a period of disinterest by Obama’s predecessor.
 
Apart from any other potential fallout from the decision announced Thursday, Obama’s decision not to go to Indonesia now could have implications for U.S. companies hoping to benefit from the country’s rapidly growing energy market, an area China also is eyeing eagerly.
 
While in Indonesia, Obama was to have signed a framework agreement to bolster ties.
 
Instead, Indonesia will next month host Chinese Premier Wen Jiabao, and expanding trade between two of Asia’s three fastest-growing economies is high on his agenda.
 
White House press secretary Robert Gibbs said the Indonesian and Australian governments understood Obama’s decision, and the visits would now take place in June.
 
“Our international alliances are critical to America’s security and economic progress,” he said. “But passage of health insurance reform is of paramount importance, and the president is determined to see this battle through.”
 
Australian Prime Minister Kevin Rudd told Australian television early Friday that he was “pretty relaxed” about the visit being scrapped. “I’m going to be very happy any time the president chooses to visit.”
 
A spokesman for Indonesian President Susilo Bambang Yudhoyono, Dino Patti Djalal, told Indonesian media Yudhoyono understood the decision.
Hillary Clinton, Indonesia

Secretary of State Hillary Rodham Clinton waves to reporters as she heads to South Korea from Jakarta, Indonesia, on Thursday, Feb. 19, 2009. (AP Photo/Tatan Syuflana)

The visit to Indonesia, Australia and Guam was already once before postponed by several days because of the health care issue.
 
In Indonesia’s case, the country first expected a visit from Obama – who spent several years of his childhood there – last November, when he attended the annual Asia-Pacific Economic Cooperation (APEC) meeting in neighboring Singapore, less than 600 miles from Jakarta. Instead he traveled to Japan – where he declared himself “America’s first Pacific president” – and to South Korea and China.
 
‘Charade punctured’
 
The administration has repeated the assertion that “America is back in Asia” since Secretary of State Hillary Clinton made the region her first destination in her new post in February 2009.
 
“I want to send a very clear message that the United States is back, that we are fully engaged and committed to our relationships in Southeast Asia, that we want to resume and strengthen our very strong alliances and friendships,” she said on a subsequent trip to Thailand last July.
 
Clinton used the “back in Asia” phrase again in Honolulu in January, on the eve of a visit to Australia and New Zealand. The visit was canceled the next day when she decided to return to Washington to help respond to the devastating Haiti earthquake. Defense Secretary Robert Gates canceled a concurrent planned visit to Australia and Indonesia for the same reason.
 
The director of the Heritage Foundation’s Asian Studies Center, Walter Lohman, said Thursday that Australia would likely take the cancellation in its stride, but the situation was different when it comes to Indonesia.
 
“Our relationship with newly democratic Indonesia is barely out of the blocks,” he wrote on a Heritage Web site. “If you think for a moment that the Indonesians will understand, think again.”
 
“The President canceling on them – and on President Yudhoyono (SBY) in particular – is a major insult.  Not everyone in Indonesia was happy about President Obama coming – particularly the very small but determined band of Indonesian Islamists still bent on overturning Indonesia’s democratic constitution. They will now claim victory and snicker at SBY’s naivete.”
 
Lohman said the “charade” about America being “back” in Asia had been punctured, and that it was time to puncture the “first Pacific president” one too.
 
“President Obama has thus far demonstrated a remarkably tin ear for American leadership in Asia – befitting his limited, albeit much hyped, connection to the region,” he said.
 
Indonesian scholar Muhamad Ali said Thursday Indonesians’ reactions to the postponed visit would vary, but he did not foresee feelings of antipathy among many Indonesians toward Obama and the United States.
Indonesia, Obama protest

An Indonesian Muslim student throws a shoe at a banner of U.S. president Barack Obama. The protest took place outside the parliament in Jakarta, Indonesia, on Friday March 5, 2010. (AP Photo/Dita Alangkara)

For the Hizbut Tahrir Islamists who have been protesting Obama's visit, the delay would not matter much, and more demonstrations would likely to held before or during the trip in June.
 
“The United States – represented by the president, whoever he is, Bush or Obama or someone else – is and continues to be a necessary enemy for their rhetoric of the Islamic caliphate and anti-imperialism.”
 
Ali, an assistant professor at the Religious Studies Department & Southeast Asian Studies Program at the University of California Riverside, said moderate and “better-informed” Indonesians would view the delay in different ways.
 
For some, it would affirm that Obama is greatly concerned about domestic issues, while others would think it may strengthen the chances that the First Lady and their children will accompany him when the trip finally happens. (They had initially planned to go with him, but after the first postponement the plan was dropped.)
 
Those who had been anticipating the visit, such as school pupils and teachers in Jakarta, would be disappointed, Ali said, “but a disappointment coupled with hope.” 
 
’Vast energy market’
 
In line with Obama’s plan to create jobs in America by growing market access abroad, a major focus of the developing U.S.-Indonesia relationship is trade, particularly in the energy field.
 
In a speech at the Center for Strategic and International Studies focusing on the trip – delivered Wednesday, before the cancellation announcement – Commerce Secretary Gary Locke pointed out that the Indonesian government expected a 56 percent increase in overall energy investment in the next four years.
 
Moreover, Indonesian law mandates that within 15 years, 15 percent of the country’s energy must come from renewable energy.
 
That will make Indonesia “a vast, steady market for green technologies,” Locke said. “American companies can help Indonesia meet this energy demand and energy challenge.”
 
Locke is leading an energy-focused mission to Indonesia in May. Obama’s visit beforehand had been expected to push the issue ahead.
 
The administration believes that “clean energy holds out great economic potential, and we continue to believe that there’s great job creation potential and the development of clean energy partnerships with emerging economies like Indonesia,” Ben Rhodes, Obama’s deputy national security advisor for strategic communications, said during a conference call briefing on the trip earlier this week.
 
But China is also keen to tap into the Indonesian market.
 
In his speech Wednesday, Locke said that China was “racing with us to meet Indonesia and the world’s demand for renewable energy.”
 
During a question time afterwards, he was asked about Wen’s visit to Indonesia in April, but played it down, saying “if it’s not the Chinese government, then it could be the French government or the German government, and others.”
 
Locke acknowledged that China was increasing trade around the world, but said he believed American companies “have incredible technology and expertise, especially in the clean energy/alternative energy/energy efficiency area, that the Indonesians are very much interested in.”
 
“Energy investment … is the main U.S. interest in Indonesia,” The Jakarta Post quoted Indonesian Institute of Sciences researcher Nusa Bhakti as telling a recent seminar.
 
“The U.S. will be under greater pressure now to secure potential energy investment in Indonesia, which China has also been vying for,” he said.