Overshadowed By Economic Slowdown, The Role Of Global Scale Banks Becomes Crucial

Illustration. (Photo: Unsplash)

JAKARTA - Banking on an international scale must be able to take advantage of multilateral relations between Indonesia and other countries in order to support domestic economic growth.

Although overshadowed by geopolitical conflicts and the global economic slowdown, several countries in the Indo Pacific region still have optimism to support each other in making a positive contribution to national and global economic growth.

Center of Reform on Economics (CORE) Economics researcher Yusuf Rendi Manilet said it was important for banks to take advantage of multilateral relations between Indonesia and other countries because the ratio of credit to GDP in Indonesia is still relatively small compared to several other countries, especially in Asia.

Banking still has room to distribute credit, including export credit to support national economic activity, such as manufacturing industry activities, exports for agricultural products, and exports of MSME products.

"In addition to lending, banks can also become a kind of analyst for various business actors to map potential and risks that can then arise in international trade activities so that exporters from various sectors can make better decisions," he said, Tuesday, December 5.

Yusuf added that banking penetration into international trade also has challenges, including credit risks from the debtor's ability to pay credit, global economic conditions that can change at any time, credit needs from various business fields, to differences in law and regulations regarding import exports in export destination countries.

"The analysis will of course be deeper than financing domestic economic activity, but it is very likely for a bank that has global capacity," he said.

As is known, currently Indonesia already has an Indo-Pacific Economic Framework (IPEF) which can be used as a basis for opening intensive communication to mutually beneficial trade cooperation between Indonesia, ASEAN, and Indo Pacific countries.

One of the countries that already have long-term trade relations and is a strategic partner of Indonesia is Japan. In 2022, bilateral cooperation between Indonesia and Japan in the trade sector reached 34.79 billion US dollars, an increase of 33.35 percent from the same period in the previous year. In 2022, Indonesia will also achieve the highest trade surplus with Japan up to 6.3 billion US dollars or an increase of 15.5 percent from the value of the surplus in 2021.

Recently, the Minister of Tourism and Creative Economy Sandiaga Salahuddin Uno also invited the Japanese government to strengthen collaboration and cooperation in the development of sustainable tourism and the development of the creative economy as a sector that opens up more investment opportunities in Indonesia.

Apart from trading partners, Japanese culture is also an alternative culture that is liked by the Indonesian people. This has helped create its own market niche, including the grand event of the Jak Japan Matsuri Festival which was recently held. Since its implementation in 2009, Jak-Japan Matsuri has been present as a forum for the Japanese and Indonesian cultural exchange. Jak-Japan Matsuri facilitates Japanese citizens in Indonesia and Indonesian citizens who have an interest in Japanese culture.

This annual Japanese cultural recognition festival will be held again in 2022 after having hiatus for two years due to the pandemic, and is supported by various parties, including companies in the Indonesian banking sector. One of the banks that regularly shows its support for Jak-Japan Matsuri is Danamon, along with Adira Finance and MUFG Bank. This is because Danamon and Adira Finance are part of the MUFG group, one of the largest financial services groups in the world and major banks in Japan.

As part of the MUFG, Danamon is unique, namely access to MUFG's global expertise and network to provide comprehensive financial solutions across segments and value chains including the automotive industry ecosystem, particularly with large producers from Japan and multinationals as anchors, as well as real estate through partnerships with Japanese property developers so that Danamon can become the provider of KPR solutions for its customers.

Reporting from various reports related to this festival, Daisuke Ejima, President Director Danamon said that Danamon's support with MUFG and Adira Finance for Jak-Japan Matsuri as a forum for strengthening relations and collaboration between Indonesia and Japan reflects the synergy between this group, which complements each other to create comprehensive financial solutions for each customer segment.

"Danamon as a hybrid bank has a unique position that can combine Danamon's strong local experience and network with Adira Finance as a subsidiary, and is supported by global networks as well as MUFG's broad and international capabilities," he said.