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Report: Webinar on Non-Equity Modes of Trade in Indonesia

The ASEAN-Japan Centre (“Centre”) organized the Webinar on Non-Equity Modes (NEM) of Trade in Indonesia on 27 May 2021. The webinar is based on the findings of the technical paper, “Non-Equity Modes of Trade in ASEAN: Indonesia” which was published recently by the Centre.  

The Indonesian Minister of Trade, Mr. Muhammad Lutfi in his Opening Remarks, which was delivered by Dr. Kasan Muhri, Head of Trade Analysis and Development Agency, the Directorate General of Trade Policy Analysis and Development, Ministry of Trade, Republic of Indonesia on his behalf, commended the Centre for its conduct of the webinar: “I highly expect that the webinar would have a fruitful discussion and serve as a platform to generate thoughts, ideas or even recommendations on how the increasing use of NEMs in various industries could improve the economic and investment growth.” 

Dr. Fithra Faisal Hastiadi, Executive Director of Next Policy and a faculty member at the Universitas Indonesia authored and presented the paper in the webinar. His presentation highlighted the opportunities and challenges of NEMs over other equity modes of trade such as foreign direct investments (FDI) by transnational corporations. Dr. Hastiadi emphasized that while FDIs are still preferred over NEMs in terms of driving business growth and sustainability, expanding market access, and acquiring technology and skills, NEMs are foreseen to potentially play a role in expanding opportunities to participate in global value chains and are critical for inclusive economic development especially in the COVID-19 pandemic.  

Paper discussants from the government and academe provided their insights and comments. Dr. Kasan Muhri contextualized NEMs in Indonesia’s economic strategy in recovering from the COVID-19 pandemic and asked whether NEMs or equity modes are preferred in order to accelerate growth. Meanwhile Prof. Chie Iguchi of Keio University provided a comparative perspective of NEMs in Thailand and the Philippines and highlighted the role of industry associations in providing capacity building strategies to support the local labor. As to the preference for NEM or equity modes, both Prof. Iguchi and AJC Secretary General Masataka Fujita suggested that it may not be a preference for one over the other as these are just modalities and TNCs may have various means to operate. Companies can have a choice in their preferred mode depending on their prospects and needs, and in the context of COVID-19, NEMs might be more feasible than FDI. 

The webinar was attended by about 80 participants, 33% of whom responded to the feedback survey and stated that they found the webinar useful in understanding the various modes of trade and investment between Indonesia and Japan. The Centre will continue organizing webinars on ASEAN countries to provide insights and continuously exchange up-to-date information on the latest economic trends and activities from ASEAN countries.

Non-equity modes of trade in ASEAN
Paper 3: Indonesia

OrganizerASEAN Japan Centre
DateThu, 27 May 2021,
14:00-16:00 (Tokyo) / 12:00-14:00 (Jakarta)
VenueZoom online meeting
LanguageEnglish
Number of participantsAbout 80
Recorded video of the seminar (YouTube)https://youtu.be/n_0CS4nm1ck

On behalf of Mr. Muhammad Lutfi, Minister of Trade Republic of Indonesia, Dr. Kasan Muhri, Head of Trade Analysis and Development Agency, the Directorate General of Trade Policy Analysis and Development, Ministry of Trade delivered the Opening Remarks
AJC Secretary General Masataka Fujita provided an overview of the Centre’s multi-year project on Non-Equity Modes of Trade in ASEAN countries.
Dr. Fithra Faisal Hastiadi presents the findings from the technical paper, Non-Equity Modes of Trade in Indonesia.
Comments from Dr. Kasan Muhri on the technical paper.
Comments from Prof. Chie Iguchi of Keio University.