Apindo: Indonesia Can Be A Dedolarization Locomotive Through The Chairship Of ASEAN 2023

Illustration. (Photo: Doc. Antara)

JAKARTA - The Indonesian Employers' Association (Apindo) assesses that Indonesia can become the locomotive of the dedolarization movement through the Chairship of ASEAN 2023 in a regional context.

"The strategic position held by Indonesia is an opportunity to make a regional agreement that can provide economic benefits for all ASEAN member countries," said Apindo Economic Policy Analyst Chair Ajib Hamdani in an official statement, quoted from Antara, Wednesday, April 26.

Therefore, various strategic policies on dedolarization need to be discussed in a structured manner at the ASEAN Summit (KTT) on May 9-11, 2023 in Labuan Bajo, East Nusa Tenggara (NTT).

According to Ajib, various de-delolarization policies that can be built with trade relations countries will at least have three positive impacts on the Indonesian economy. First, efficiency because when there is a trade transaction between the two countries, transactions can directly use the currency in question.

The second impact is that Indonesia is relatively protected from the threat of a global financial crisis because of the large number of currency diversifications carried out in international transactions. Third, the benefits in Indonesia's balance of payments and fiscal health, especially when the United States (US) dollar is more appreciated and stable.

Dedolarisasi adalah proses penggantian dolar AS sebagai mata uang yang digunakan untuk perdagangan dan/atau komoditas lainnya. Hal ini menjadi bagian dari kebijakan pemerintah yang akan mendongkrak nilai tukar mata uang lokal terhadap dolar AS.

He said the movement and policy of dedolarization was also a global phenomenon taken by developed countries of the same economic orientation, for example, the state group BRICS consisting of Brazil, Russia, India, China, and South Africa, which seeks to reduce the use of the US dollar in transactions between countries.

"China with Gross Domestic Product (GDP) reaching 17.5 billion US dollars can become the motor of the world's economic locomotive. Coupled with Russia which can create a global economic contraction, of course it will have a significant impact in the political and economic context," he explained.

In addition, he said, India also has extraordinary economic potential because it has demand in the second largest population in the world, with more than 1.4 billion populations.

Previously, the Governor of Bank Indonesia (BI) Perry Warjiyo expressed a similar view with the Minister of Finance of the Republic of Indonesia Sri Mulyani regarding de-dollarization. The Governor of BI said Indonesia had initiated the diversification of currency use, for example in the mechanism of cooperation in local currency transactions aka Local Currency Transaction (LCT).

In rhythm, the Minister of Finance said that to reduce dependence on the US dollar, the more the LCT pattern is improved with trading partner countries.