Economists Reveal That Indonesia's Joining As A Member Of BRICS And OECD Will Have Excess

BRICS Plus 2024 Summit in Kazan (Source: Sergei Bobylev/brics-russia2024.ru Host Photo Agency via Kremlin)

JAKARTA - Paramadina University Economist Wijayanto Samirin assessed that the issue of Indonesia joining the BRICS or the Organization for Economic Co-operation and Development (OECD) had been circulating for a long time, so Indonesia needed to immediately decide on the steps ahead.

"It will take too long to choose and sort out will produce the worst scenario for Indonesia, namely not the second member; even if you join later it will be very late and will not be involved in the important discourse of compiling the second policy line," he said in his statement, Sunday, October 27.

To note, BRICS members consist of Brazil, Russia, India, China, South Africa, Ethiopia, Iran, Egypt, and the United Arab Emirates (UAE). Meanwhile, there are currently 38 OECD members, including Australia, Austria, Belgium, Canada, Cile, Colombia, Costa Rica, Czech Republic, and Denmark, Estonia.

Wijayanto explained that Indonesia as a member of BRICS should not be interpreted as maintaining a distance from the European Union (EU) and the United States (US). For example, India, the United Arab Emirates (UAE), Brazil and Saudi Arabia are members of the BRICS who also have close ties to the US. Likewise, being an OECD member does not mean that you have to keep your distance from BRICS countries, especially China and Russia.

"OECD and BRICS are not rigid blocks, each member remains free to cooperate. In this context, our considerations should be more pragmatic, not political, which one will provide more benefits for Indonesia which will be chosen," he said.

According to Wijayanto OECD, it is clear that he wants to maintain the status quo where several Western countries dominate the world economy, including related to the world trade system and the monetary system, where the US dollar becomes the world's reserve currency. In addition, the World Trade Organization (WTO) is a forum.

Meanwhile, BRICS wants to make a breakthrough from the most extreme, namely Dedolarization by forming an alternative currency to replace the US Dollar as pioneered by Russia and China.

"Russia is getting more and more excited to make it happen after Western countries freeze Russian assets overseas after Ukraine's conflict; many countries are wondering if this could happen to Russia, it could also happen to them," he said.

In addition, BRICS also wants a more moderate agenda, such as trade cooperation and the establishment of an alternative payment system using the BRICS currency, one of which is driven by India.

According to Wijayanto, if he finally decided to join BRICS, ideally, Indonesia would be a moderate part, encourage trade cooperation and realize a new payment system that does not depend too much on the US dollar.

Wijayanto explained that the current monetary system, where the US dollar represents more than 90 percent of the world's reserves and trade currency, tends to be unhealthy, especially since the United States tends to abuse the position by issuing excess debt which is then financed by the bank notes they issue.

"Ideally the US Dollar will remain an important currency, but the world needs alternatives, so that the monetary authority and the United States Government are more careful in managing the economy," he said.

Meanwhile, regarding OECD membership, Wijayanto said that this was also a good choice. However, the element of the status quo is still very thick, for example, to become a member of a candidate for member must meet the criteria that are prepared with values and very Western parameters considered.

So there is an impression that there are superior and inferior parties. And in an increasingly multipolar world era, things like this must be eliminated slowly.

Wijayanto said that to become a member, Indonesia must fight hard to be able to meet these criteria, which are not entirely relevant. For example, for almost 10 years we have discussed EU-CEPA with EU, but there has been no significant progress to date; there has always been an issue that seems to be looking for.

Meanwhile, EU discussions with other countries such as India, Thailand and Vietnam seem to be running smoothly in the process.

"With the USA, we currently only have a very limited Priorial Trade Agreement (PTA), even though we need a comprehensive FTA, so that our products can enter the United States market, the same as neighboring countries such as the Philippines, Thailand, and Vietnam," he said.

Wijayanto said the best scenario was to join the two as Thailand and Turkey (Turkey is an OECD member but registers as a member of BRICS), because there are no formal provisions that do not allow this to happen.

While the second scenario is that the Government must choose one and prioritize groups that value Indonesia's position more, the indicator is simple, which is the most likely to be executed quickly.

"If we choose OECD, of course we need affirmation that various trade agreements that are still hanging, will be completed soon. The worst scenario is that we are in a hanging position; not being a part of both of them is, as a result of our doubts in determining our position. We have been in this position for too long and must end immediately," he said.