Local governments and Indonesian foreign policy

Yayan GH Mulyana, Jakarta | Wed, 12/14/2011 8:52 AM A | A | A |-Klipping The Jakarta Post

President Susilo Bambang Yudhoyono issued a directive in a Cabinet meeting on Dec. 2, asking, among other things, for governors to fully understand Indonesia’s standpoint regarding various international issues. This directive is very timely considering the increase in local government interest in conducting relations with foreign entities or governments.

While the authority for the formulation, making and implementation of foreign policy rests with the central government, local governments share some authority with the national government in conducting foreign relations, especially for economic and development purposes. Law No. 32/2004 on Regional Government, which replaced Law No. 22/1999 on Regional Government, explicitly mentions the authority of a region to conduct mutually beneficial cooperation with institutions or agencies abroad relating to areas
under its authority (Article 88).

Article 41 of Law No. 32 /2004 stipulates that with the approval of the regional legislative council, a local government can propose and implement an international cooperation plan. In explanation of this article, “international cooperation” refers to regional cooperation with foreign parties, including twin or sister city cooperation, technical cooperation including humanitarian aid, cooperation on forwarding loans or grants, equity participation and joint cooperation in accordance with statutory regulations.

It is further stated that regional governments can accept foreign grants and can borrow foreign loans through the Ministry of Finance (Article 170).

In terms of foreign affairs relating to the authority of autonomous regions — as a solution to a conflict such as the Åland Islands in Finland, as recognition of special privileges to ethnic minorities such as in the Chinese provinces of Guangxi, Nei Mongol, Ningxia, Xinjiang and Xizang, or as a result of a political process such as in Indonesia — economic and development cooperation is the most common dimension of such authority.

Based on existing practices, there are at least four patterns of interaction between local governments and their national governments in the conduct of foreign affairs.

First is a complementary pattern. In this pattern, the implementation of the local government’s authority in foreign affairs is in harmony with the central government’s foreign policy.

For example, in 1998, when the US imposed economic sanctions against Myanmar, the City Council of Los Angeles, California, issued an ordinance prohibiting the local government of Los Angeles executing contracts with companies that had investments or foreign relations activities with Myanmar.

Second is a complicating pattern. There have been cases where local governments in the US took legal and administrative measures that complicated US foreign policy. For example, in 2000, the state of California issued the Angelides’ guidelines that prohibited financial institutions in California investing in countries like Turkey and Egypt, which were US allies, as well as with China despite its special ties with the US. The guidelines placed the US in a difficult position in relation to its allies.

Third is a dissociating pattern. The central government will dissociate itself from the policy taken by autonomous local governments. For example, the Finnish government was not able to do anything when the European Commission demanded through the European Court that Finland abolish the “Snus Law” (law on chewing tobacco), which was applicable in the Autonomous Region of the Åland Islands.

The Finnish Government argued that health problems (including tobacco use) were within the full authority of the Autonomous Region of Åland Islands and chewing tobacco was an important commodity for the economy of the Åland Islands.

Fourth, there is a conflicting pattern. This pattern is visible when measures or policies taken by local governments conflict with the policies of national governments. In Indonesia, for example, it was once noticed that many local governments had expressed strong interest in advancing cooperation with Taiwan, which ran counter to Indonesia’s One China policy. Some had even proposed the foundation of a trade office in Taiwan.

Regional autonomy in Indonesia emerged from historical necessities and it is something that should not be undone. Yet, it is essential to ensure that local governments’ activism in foreign relations is pursued in the corridor of their limited authority and, in particular, on Law No. 37/1999 on Foreign Relations. It is important that local governments know their limits and respect and follow the policies set by the national government.

As local governments do not always have resources to support their foreign affairs activities, the central government could help equip local governments with such capacity, including information on various regulations and cooperation opportunities.

Local governments’ limited authority in foreign relations could also be empowered through institutional measures. The government of the state of California, for instance, formed the International Business Relations Program (IBRP) to support its foreign trade relations.

Local governments could also promote innovation. The Xinjiang Local Government, for example, annually holds the Xinjiang Urumqi Foreign Economic Relations & Trade Fair (Urumqi Fair), which has become the largest opportunity for trade transactions with Central Asia, Russia and Western China as target markets. Networking for local governments is important for exchanging best practices, for example through the International Union of Local Authorities (IULA) and the Asia-Pacific Cities Summit.

The writer is an assistant to special staff to the President for international relations. The opinions expressed are his own.