國立中山大學中國與亞太區域研究所碩士論文 印尼與台灣的經濟及社會文化關係 ( ): 印尼的觀點

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1 國立中山大學中國與亞太區域研究所碩士論文 Institute of China and Asia-Pacific Studies National Sun Yat-sen University Master Thesis 印尼與台灣的經濟及社會文化關係 ( ): 印尼的觀點 Economic and Socio-Cultural Relations between Indonesia and Taiwan: An Indonesian Perspective, 研究生 : 陸碧宜 Luh Nyoman Ratih Wagiswari Kabinawa 指導教授:顧長永教授 Prof. Samuel C. Y. Ku 中華民國 102 年 6 月 June 2013

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3 摘要 本文欲分析印尼雖然與台灣沒有政治外交關係, 卻能發展其在台灣的經濟和社會文化關係的原因 印尼與台灣之間的經貿統計顯示, 在 2010 年台灣是印尼的第八大外來投資以及第 11 大貿易夥伴 ; 在社會文化關係方面的數據更證明在台灣有廣大的印尼移工與印尼學生人口 因此, 印尼與台灣呈現經貿與社會文化互賴的情況 儘管缺乏政治外交關係, 為什麼印尼能持續維持與台灣的經貿以及社會文化關係呢? 為解答此問題, 本文將採印尼觀點為途徑, 其著重於印尼人民對其與台灣的關係的視角 分析方法則援引國際關係建構主義中的人民間互動的概念為本, 著重觀察共同觀念和文化價值如何形塑制度, 因為制度最終會構築政府的利益 本文證明印尼在沒有對台外交關係的情況下能持續維持與台灣的經貿和社會文化關係的原因, 在於印尼人民是觀念的倡導者, 主導著與台灣之間的互動 人民與制度兩者對印尼與台灣來說, 是深入強化相互關係的經貿與社會文化功能角色 關鍵字 : 印尼商人, 印尼移工, 印尼學生, 經貿與社會文化關係, 人民主 導 i

4 ABSTRACT The main intention of this thesis is to analyses the underlying reason that caused Indonesia is able to nurture its economic and socio-cultural relations with Taiwan, even though under the absence of political diplomatic relations. Statistics on economics between Indonesia and Taiwan shows that in 2010, Taiwan is the eighth-investor and the eleventhtrading partner for Indonesia. Furthermore, statistics on socio-cultural relations proves that there are massive population of Indonesian migrant workers and Indonesian students in Taiwan. Thus, Indonesia and Taiwan are in the conditions of economic and socio-cultural interdependence. Despite lacking political diplomatic relations, why could Indonesia maintain durable economic and socio-cultural relations with Taiwan? In order to answer that question, this paper will employ the Indonesian perspective approach that stressed on the Indonesian people point of views toward its relations with Taiwan. The main tool of analysis is based on the people-to-people interactions concept which is drawn from the constructivist approach on International Relations. It focuses on how share ideas and cultural-values contribute to the making up of institutions which in the end constitute the interests of the state. This thesis has proved the proposed hypothesis that due to the Indonesian people as the promoter of ideas lead the interactions with Taiwan, Indonesia is able to maintain its durable economic and socio-cultural relations with Taiwan despite under the absence of diplomatic relations. People and Institutions serve as independent economic and socio-cultural agent both for Indonesia and Taiwan to further strengthen their ties. Key Words: Indonesian businessmen, Indonesian migrant workers, Indonesian students, economic and socio-cultural relations, people leading ii

5 TABLE OF CONTENT ABSTRACT LIST OF TABLES LIST OF CHARTS i. vi viii ABBREVIATIONS ix Chapter I: Introduction Background of Information 2 2. Research Motives Research Purposes 4 4. Research Approach Research Methods 5 6. Literature Review Taiwan Perspective. 7 (1) Primacy of Taiwan s Economic Diplomacy and Interests. 7 (2) Shifting International Order.. 10 (3) Development of Cross-Strait Relations. 11 (4) People-to-People Approach Indonesian Perspective.. 14 (1) Policy of Separation of Politics and Economics. 14 (2) PRC s Factors within Indonesia and Taiwan Relations Analytical Framework 21 (1) Theoretical Framework (2) Proposed Framework. 26 I.8. Thesis Arrangement. 29 Chapter II: Economic Relations between Indonesia and Taiwan Economic Relations before 1990s Economic Relations after 1990s iii

6 Chapter III: Socio-Cultural Relations between Indonesia and Taiwan Migrant Workers in Taiwan Indonesian Migrant Workers in Taiwan Foreign Students in Taiwan Indonesian Students in Taiwan Socio and Cultural Exchanges between Indonesia and Taiwan. 66 Chapter IV: People s Ideas, Institutions and Interests within Indonesia and Taiwan Relations Framework of Ideas. 76 (1) Environmental Framework.. 77 (2) Economic Framework.. 83 (3) Cultural Framework Creation of Institutions and Norms 91 (1) Asosiasi Pengusaha Toko Indonesia di Taiwan (APIT) 92 (2) Ikatan Citra Alumni Taiwan seindonesian (ICATI). 94 (3) Ikatan Pekerja Indonesia Taiwan (IPIT).. 97 (4) Perhimpunan Pelajar Indonesia di Taiwan (PPI Taiwan) Economic and Socio-Cultural Interests Between Indonesia and Taiwan 101 (1) Economic Interests 102 (2) Socio-Cultural Interests. 105 Chapter V: Conclusion Conclusion Theoretical Implications Implications for Indonesia and Taiwan Bibliography iv

7 Appendix A: Field Research Activities March-May Appendix B: Memorandum of Understanding between the Indonesian Economic and Trade Office in Taipei and the Taipei Economic and Trade Office, Indonesia on Cooperation in the Field of Higher Education. 122 Appendix C: Memorandum of Understanding between the Indonesian Economic and Trade Office in Taipei and the Taipei Economic and Trade Office, Indonesia on the Recruitment, Placement and Protection of Indonesian Overseas Workers. 125 v

8 LIST OF TABLES Table 1-1 Statistics on Economics and Socio Cultural Relations Between Indonesia and Taiwan Table 1-2 Summary of Literature Review Table 2-1 Taiwanese Investment in Indonesia from Table 2-2 Timeline of Economic Activity between Indonesia and Taiwan before the 1990s 35 Table 2-3 Values and Products of Taiwan Export to Indonesia Table 2-4 Values and Products of Taiwan Import From Indonesia Table 2-5 Export and Import Activity between Indonesia and Taiwan Based on Values per-year Table 2-6 Taiwanese Investment in Indonesia Based on Cases and Values From Table 2-7 Taiwanese Investment in Indonesia Based on Area of Investment, Cases, and Amounts Table 2-8 Timeline of Political Economy Activities Between Indonesia and Taiwan, Table 3-1 Statistics on the Total Number of Indonesian Migrant Workers In Taiwan Table 3-2 Statistics on Total Number of Indonesian Migrant Workers Based on Field of Industry per January Table 3-3 Statistics on Top Five Countries of Foreign Students In Taiwan School Year 2012/ Table 3-4 Statistics on Indonesian Students in Taiwan vi

9 School Year Table 3-5 Scholarship Scheme for Indonesian Students in Taiwan Table 4-1 Summary of Environmental Framework Table 4-2 Summary of Economic Framework. 87 Table 4-3 Summary of Cultural Framework Table 4-4 Semi-Officials Economic Exchanges between Indonesia and Taiwan, Table 4-5 Officials Economic Exchanges between Indonesia and Taiwan, Table 4-6 Semi-Officials Socio-Cultural Exchanges between Indonesia and Taiwan, Table 4-7 Officials Socio-Cultural Exchanges between Indonesia and Taiwan, vii

10 LIST OF CHARTS Chart 2-1 The Percentage of Taiwan s Export Product to Indonesia Based on Products and Values Ranking Chart 2-2 The Percentage of Taiwan s Import Product from Indonesia Based on Products and Values Ranking Chart 3-1 Migrant Workers in Taiwan by January viii

11 ABBREVIATIONS APIT : Asosiasi Pengusaha Toko Indonesia di Taiwan ASEAN : Association of Southeast Asia Nations CCC : Chinese Chamber of Commerce CIER-TASC : Chung-Hua Institution of Economic Research-Taiwan ASEAN Research Center CLA : Council of Labor Affairs DIKTI : Pendidikan Tinggi ESIT : Elite Study in Taiwan FORMMIT : Forum Mahasiswa Muslim Indonesia Taiwan HIV/AIDS : Human Immunodeficiency Virus/Acquired Immunodeficiency Syndrome ICATI : Ikatan Citra Alumni Taiwan seindonesia ICC : Indonesian Chamber of Commerce ICDF : International Cooperation Development Fund IDR : Indonesian Drawing Rate IETO : Indonesian Economic and Trade Office INGO : International Non-Governmental Organizations IPIT : Ikatan Pekerja Indonesia Taiwan ITS : Institut Teknologi Sepuluh November ix

12 Jababeka : Jakarta Bandung Bekasi Kerawang LIPI : Lembaga Ilmu Pengetahuan Indonesia MOE : Ministry of Education MOEA : Ministry of Economic Affairs MONE : Ministry of National Education MOU : Memorandum of Understanding NCKU : National Cheng-Kung University NCTU : National Chiao-Tung University NGO : Non-Governmental Organizations NTD : New Taiwan Dollar NTUST : National Taiwan University of Science and Technology OCS : Overseas Chinese Student OISAA : Overseas Indonesian Student Association Alliance PCC : Pou Chen Company PERMIRA : Perhimpunan Mahasiswa Indonesia di Rusia PERPITA : Persatuan Pelajar Indonesia di Taiwan PPI France : Persatuan Pelajar Indonesia di Prancis PPI Taiwan : Persatuan Pelajar Indonesia di Taiwan PRC : People s Republic of China x

13 P2P : Pusat Penelitian Politik ROC : Republic of China SEZs : Special Economic Zones TEC : Taiwan Education Center TETO : Taipei Economic and Trade Office TIWA : Taiwan International Workers Association USD : US Dollar xi

14 Chapter I Introduction 1. Background of Information Indonesia and Taiwan are two entities that do not have official diplomatic relations but maintain durable economic and socio-culture relations. Historically speaking, even though Indonesia adhere one-china policy principle, this country continue to nurture its relations with Taiwan in terms of economics and socio-culture. The formal peak of relations between them occurred in 1989 when Taipei was allowed to rename its Chamber of Commerce in Jakarta into Taipei Economic and Trade Office which gave politically meaningful status to Taiwan. Indonesia-Taiwan harmonious relations did not stop there; in 1994 Taiwan launched a program called Southward Policy which aims to increase its investment and political relations with countries in Southeast Asia including Indonesia. Economic ties between Indonesia and Taiwan found within the investment and trade activities while socio-cultural ties lied within the existence of Indonesian migrant workers and Indonesian students in Taiwan. Statistics on economic and socio-cultural relations between Indonesia and Taiwan showed improvement after the year of 1990s. In terms of economic investment, Taiwan was the eighth-largest foreign direct investor for Indonesia in In terms of trading activity, Indonesia was Taiwan s eleventh-trading partner in 2010, being the thirteenth-largest export market and eleventh-largest supplier or imports. 2 On the context of socio-cultural relations, Indonesian migrant worker is the first biggest population of foreign workers in Taiwan. In addition, Indonesian student is the third largest population of foreign students from Southeast 1 Center for Political Studies (P2P) LIPI, Policy Paper: the Dynamics and Current Status of Indonesia-Taiwan Relations, Jakarta: Center for Political Studies (P2P) LIPI, 2011, p. 6 and Kondisi Hubungan Bilateral antara Taiwan dan Indonesia, < accessed on December 27 th, Ibid. 1

15 Asia after Malaysia and Vietnam. Detail statistics of economic and socio-cultural relations from the latest three years show below: Year Table 1-1 Statistics on Economic and Socio-Cultural Relations between Indonesia and Taiwan Investment Export (US$ Import (US$ Indonesian (US$ 1000) 1000) 1000) Migrant Workers Indonesian Students (person) (person) , , ,723 Source: Investment figure accessed from Statistics on Approved Outward Investment by Area and Industry < Export and Import figure accessed from Taiwan Export-Import to Asia, < and Bureau of Foreign Trade: Trade Statistics, Republic of China (Taiwan), < Indonesian Migrant Workers figure accessed from Foreign Workers in Productive Industries and Social Welfare by Nationality and Sex < Indonesian Students figure accessed from < The table clearly shows that each year statistics on economic and socio-cultural relations experience some improvements. However, the durable economic and socio-culture relations between Indonesia and Taiwan do not necessarily give positive impact toward their political-diplomatic relations. Indonesia since its independence in 1945 never recognized Taiwan as an independent state. Indonesia recognized the People s Republic of China (hereafter PRC) as the sole legitimate representative of Chinese government in Even after Indonesia suspended its diplomatic relations with PRC in 1967, Indonesia has never recognized Taiwan. Furthermore, Indonesia is one of the countries in Southeast Asia that strongly supported the principle of One-China Policy and signed strategic partnership relations with PRC in Thus, politically speaking, Indonesia does not have any incentive to improve its relations with Taiwan. Economically speaking, however, Indonesia and Taiwan are able to maintain strong economic and socio-cultural relations. Hence, this thesis will explain the 2

16 reason why Indonesia and Taiwan are able to develop economic and socio-culture cooperation even though there is no diplomatic relations between them. State-centric approach argued, state is the main actor within international relations. Thus international politics is driven by state-to-state interactions under the leverage of diplomatic relations. A state that does not have political diplomatic relations with another state would be difficult to engage in formal governmental relations among each other. Nevertheless in the case of Indonesia and Taiwan, both nations are able to develop their economic and socio-culture relations even though official diplomatic ties are missing. Thus, this thesis tries to answer the question: Despite lacking political diplomatic relations, why did Indonesia maintain durable economic and socio-cultural relations with Taiwan? This thesis employs Indonesian perspective approach to examine Indonesia-Taiwan relations. In addition, this thesis will also examine case studies of economic and socio-culture issues. Economic issues involve the aspect of investment, and trade while socio-culture issues include the aspect of migrant workers and Indonesian students. 2. Research Motives Research on Taiwan and Indonesia relations mainly focused from Taiwan s perspectives toward its relations with Indonesia, such as Taiwan s economic diplomacy and interests, the development of cross-strait relations, and the shifting international order. Furthermore, there is only limited number of discourse that focus on Indonesian perspective toward its relations with Taiwan that eventually creates a gap on the existing research on Indonesia and Taiwan relations. Therefore, to fill that gap, this thesis will explain and analyze the phenomena of economic and socio-cultural relation between Indonesia and Taiwan from the Indonesian perspective. Thus, at the end could fulfill the main purpose of this thesis. 3

17 3. Research Purposes The main purpose of this thesis is to analyze and to explain the underlying reason that caused Indonesia is able to nurture its economic and socio-cultural relations with Taiwan even though under the absence of political diplomatic relations. 4. Research Approach The thesis will employ Indonesian perspective approach toward its economic and socio-cultural relations with Taiwan. The use of Indonesian perspective means the thesis will explain the relations between Indonesia and Taiwan from the Indonesian point of view particularly from people-to-people interactions that exist within the economic and sociocultural ties. The main reasons to employ Indonesian perspective approach due to limited number of research publications that analyzes and explain the issues of economic and sociocultural ties from Indonesian perspective. Therefore, the literature review findings are more likely based on Taiwan s perspective toward its relations with Indonesia. Literature review from Taiwan perspective has argued that Taiwan is able to maintain economic relations with Indonesia due to Taiwan s economic diplomacy and interests (Leifer;2001, Ku;1995, Leong;1995, Lee;1990, Klintworth;1995, Rich:2009), the shift on international order (Ku;1998), the development of cross-strait relations (Chen;1996, Lin;2010), and the factors of people-to-people particularly Taiwan businessmen (Chen;2002). On the other hand, literature review from Indonesian perspective has argued that due to the policy of separation of politics and economics (Ku;1998), and the PRC s factor on Indonesia and Taiwan relations (Ku;2002, Irawan;2006) Indonesia is able to maintain its economic relations with Taiwan. Based on the above mentioned literature review, research on Indonesian perspective still far behind from Taiwan s perspective research. Therefore, this thesis will enrich and 4

18 contribute to the research on Taiwan and Indonesia relations from Indonesia s point of view. In addition, Indonesian perspective will be viewed from the perspective of people-to-people interactions which has not been addressed yet by the existing publications. People-to-people interactions in term of Indonesian businessmen, Indonesian migrant workers and Indonesian students are intense within the close-ties of economic and socio-cultural relations between Indonesia and Taiwan. Therefore, there is a necessity to address them as the main analysis on this thesis, thus, at the end will offer new findings within the existing research. 5. Research Methods In order to analyze and to explain the reasons why Indonesia maintain its economic and socio cultural relations with Taiwan, this thesis will apply two different research methods: document analysis and in-depth interview. The first method that will be applied is document analysis method. Documents analysis means that this thesis will use several documents to analyze Taiwan-Indonesia relations. Document analysis includes analysis on government reports, memorandums of understanding between Taiwan and Indonesia, statistical economic and socio-cultural data, and newspapers. These documents will be useful to get more information about Indonesia- Taiwan relations both in the past or present conditions. The main reasons to use document analysis because it helps to get accurate information from government reports or statistical data that support the explanation on the topic of the thesis. Moreover, the use of governmental reports are rarely use by other scholars in examining Taiwan-Indonesia relations since the problem of language barrier that existed between Indonesian or Taiwanese scholars. In addition, document analysis method will also help to understand the interests that lied on the Indonesian side while conducting cooperation with Taiwan. 5

19 The second method that will be employed is in-depth interview which means conducting interview with actors that helped to improve Taiwan and Indonesia relations. The actors are divided into three main categories. First, the head of Indonesian Employers Associations Store in Taiwan or Asosiasi Pengusaha Toko Indonesia di Taiwan (hereafter APIT) and representative of Indonesian Federation of Taiwan Alumni Associations or Ikatan Citra Alumni Taiwan Seindonesia (hereafter ICATI). Second is the representative of Indonesian migrant workers in Taiwan, represented by the head of Indonesian Migrant Workers Association in Taiwan or Ikatan Pekerja Indonesia Taiwan (hereafter IPIT). The last is representative of Indonesian students in Taiwan, represented by the head of Indonesian Student Association in Taiwan or Perhimpunan Pelajar Indonesia di Taiwan (hereafter PPI Taiwan). In addition, the interview will also include some of Indonesian governmental representatives in order to know their perceptions toward Indonesia-Taiwan relations. This thesis using in-depth interview methods because it needs to get an assessment over Indonesian perspective, particularly people who are directly interact with the conditions in Taiwan such Indonesian migrant workers, Indonesian students, Indonesian businessmen and Indonesian representative governments in Taipei. Furthermore, interview will also help to prove the hypothesis that addressed in this thesis. Finally, in dept interview method is chosen because the existence research mostly relied only on content analysis method without observing on the people who participate actively on supporting cooperation between Indonesia and Taiwan. 6. Literature Review Two major perspectives exist among scholars in the discussion of Taiwan-Indonesia relations: the Taiwan perspective and the Indonesian perspective. 6

20 Scholars from Taiwan perspective explain Indonesia-Taiwan relations from Taiwan s point of view which includes the aspects of Taiwan s economic diplomacy and interests, the shifting on international order, the development of cross-strait relations, and the influence of people-to-people interactions. Their argumentations not only limited to the case of Indonesia- Taiwan relations, but also consist of broader cases of relations between Taiwan and Southeast Asia countries. On the opposite side, scholars from the Indonesian s perspective contend the idea that Indonesia keeps nurtured its harmonious relations with Taiwan due to the consideration of policy separation of economics and politics and the PRC s factor within Taiwan and Indonesia relations. Both perspectives define their ideas with strong finding arguments which enrich the discourse on Taiwan-Indonesia relations Taiwan Perspectives Scholars holding Taiwan perspectives were split into four main arguments, the primacy of Taiwan s economic diplomacy and interests, the shifting international order, the development of cross-strait relations, and the influence of people-to-people interactions. (1) Primacy of Taiwan s Economic Diplomacy and Interests The first argument is the primacy of Taiwan s economic diplomacy and interests. Scholars on this view stated that due to the development of Taiwan s economic growth and its interests to gain economic and political benefits, Taiwan has been able to promote its foreign relations with countries that have no diplomatic relations such as Indonesia. In order to support Taiwan s economic expansion to Indonesia and other Southeast Asia countries, the government of Taiwan initiated a policy called Southward Policy. Ku point out that Taiwan s Southward policy was mainly aim to expand Taiwan s economic interests in the Southeast Asia region while also tried to strengthen Taiwan s political status with ASEAN 7

21 countries including Indonesia 3. Even though there is no diplomatic relations among them, Taiwan s economic growth and huge investment attracted countries in Southeast Asia to cooperate with Taiwan in terms of economic issues. Similarly with Ku, Leifer also marked the importance of Taiwan s economic power that made Taiwan s relations with countries in Southeast Asia possible. He noted that Taiwan s engagement with Southeast Asia was mainly driven by economic interests through trade and investment ties in terms of market, land, and cheap labor 4. Moreover, Taiwan also expanded its relations through raised up academic and cultural exchanges and agricultural aids 5. These efforts were successfully proved by the improvement of political ties such the possibility of issuing visa by Taiwan s representative offices and granting diplomatic immunity toward Taiwan s official representative though not in the manner of formal diplomatic relations. In addition, Leong use the term economic diplomacy to describe the pragmatic approach conducted by the Taiwanese government that combined the trade and investment for the pursuit of foreign policy relations with Southeast Asia countries 6. Leong shared similar ideas with Ku that he analyzes the exercise of Taiwan s economic strength toward the implementation of Taiwan s Southward Policy. Furthermore, Lee also argue that economic diplomacy has been Taiwan main interest when dealing with Southeast Asia countries, though the main agenda behind the economic diplomacy is to enable Taiwan to rejoin 3 Samuel C.Y. Ku, The Political Economy of Taiwan s Relations with Southeast Asia: The Southward Policy, Contemporary Southeast Asia, Vol. 7, No.3, December 1995, p Michael Leifer, Taiwan and South-East Asia: The Limits to Pragmatic Diplomacy, The China Quarterly, Vol. 165, March 2001, p Ibid., p Ho Khai Leong, New Directions in Taiwan-Southeast Asia Relations: Economics, Politics and Security, Pacific Focus, Vol. X, No. 1, Spring 1995, p. 84 8

22 international community and organizations 7. These attempts were conducted to break Beijing s block of Taiwan international political status. From the same perspective, Klintworth also use Taiwan s economic strength as an indicator to explain Taiwan relations with the country in the Asia-Pacific region. He argued that Taiwan s looking Southward Policy had two main intentions, to make Taipei more politically influence in the Southeast Asia region, and to get an access of natural resources and cheap labor which owned by mostly Southeast Asia countries, such Malaysia, Vietnam, and Indonesia 8. Cheap labor and abundant natural resources are also the main reasons for Taiwan to invest in the Southeast Asia region. Taiwan s economic activities are complement to the countries in the Southeast Asia, thus allowing the economic cooperation among them goes smoothly. Another argument stemmed from Rich s article which analyzes the possibility of Taiwan to survive in the international arena while the country enjoys only limited numbers of diplomatic relations. He asserted that the conventional idea of recognition which consists of internal and external sovereignty has been diminished due to the emergence of ROC s economic capability hand to hand solved the problem of lacking diplomatic relations 9. Though Rich do not cover the issue of Taiwan s relations with Southeast Asia or Indonesia in his article, his idea remain important that support the primacy of economic power and interests over state to state relations. Based on the above mentioned arguments, scholars within this spectrum of approach relies their analysis based on the liberal political-economy approach. They both believe that economic strength and diplomacy can help generate the political relations. Economic issues 7 Kuo-hsiung Lee, The Republic of China and Southeast Asia: More Than Economy, in Yu San Wang, ed., Foreign Policy of the Republic of China on Taiwan: An Unorthodox Approach (New York: Praeger, 1990), p Gary Klintworth, New Taiwan, New China: Taiwan s Changing Role in the Asia-Pacific Region (New York: St. Martin s Press, 1995), p Timothy S. Rich, Status for Sale: Taiwan and the Competition for Diplomatic Recognition, Issues and Studies, Vol. 45, No.4, December 2009, pp

23 become important within state to state relations and overlap the role of political issues. This approach could predict that in the future, economic cooperation will have spill-over effects to other areas of cooperation such socio-cultural. The main strength of this approach is clearly pointed out Taiwan s main economic and political interests in strengthening its relations with countries in Southeast Asia. Though, they are also has weaknesses that do not explain how economic interest can give spill-over effects to the political relations between Indonesian and Taiwan. (2) Shifting International Order The second group of scholars from Taiwan s perspective argues that due to the shifting international order, Taiwan has able to maintain its foreign relations with countries in the Southeast Asia region. After the cold war ended, international order filled not only by hard politics issues such as military confrontation and diplomatic struggle but also by low politics issues like economic and socio-cultural. In addition, non-state actors also emerged that created multiple of contact among actors in the international order. The basic theoretical framework about the shifting international order derived from Keohane and Nye model of complex interdependence. They argued that complex interdependence includes three characteristics: multiple channels of contact, an absence of hierarchy among issues, and the minor role of military force 10. These characteristics endorsed the changing of international order after the cold war and influenced the pattern of state to state relations. Scholars in this camp argued that the conditions of complex interdependence allows states to interact with others through the development of multiple channels of contact that stressed the importance of non-state actors, and the absence of hierarchy among issues which means state to state relation no longer governed by political-security minded approach (economics and other issues matter). Ku employed the complex interdependence model to 10 Robert O. Keohane and Joseph S. Nye, Jr., Power and Interdependence in Samuel C.Y. Ku, Taiwan s Diplomatic Maneuvers in the Asia-Pacific: A Perspective of Complex Interdependence, Issues and Studies, Vol. 34, No. 6, June 1998, p

24 analyze Taiwan s foreign relations survival in the Asia-Pacific region despite under the shadow of PRC s threat. He argued that Taiwan s foreign relations are in harmony with the development of complex interdependence in the Asia-Pacific region, thus creating the endurance for Taiwan s diplomatic maneuver in the region despite a lack of formal diplomatic relations 11. Nevertheless, Ku noted that the last characteristic of complex interdependence which is the minor role of military force is not suitable to the development in the Asia-Pacific region, though the other two are compatible 12. Furthermore, Ku mentioned three strategies that Taiwan pursued under the complex interdependence situations, engage actively on the area of issue economic-oriented, strengthen unofficial diplomatic relations, and fully participated on the multilateral track relations such INGOs 13. Those strategies are compatible with the development of complex interdependence in the Asia-Pacific region that enabled Taiwan to maneuver its diplomatic activities. Even though PRC has been spread its strong influence on the region, there were still rooms left for Taiwan to involve actively in the international arena. Scholar on this spectrum employs liberal-interdependence approach that focused the analysis on the interdependence world order that stemmed after the end of cold war. On the concept of interdependence world order, non-state actors such international nongovernmental organizations can help state interact with others though lack of official diplomatic relations. These non-state actors create multiple linkages that enable state to maneuver within the international order. Moreover, within the conditions of complex interdependence (particularly after cold war) state to state relations no longer governed by solely military and political security issues. Economic and other issues also matter that provide a room for politically-isolated country like Taiwan to maneuver. Though this 11 Samuel C.Y. Ku, Taiwan s Diplomatic Maneuvers in the Asia-Pacific: A Perspective of Complex Interdependence, Issues and Studies, Vol. 34, No. 6, June 1998, p Ibid. 13 Ibid. 11

25 approach has weakness that failed to explain how the third characteristics of complex interdependence matter on Taiwan diplomatic maneuver. (3) Development of Cross-Strait Relations Scholars holding this view contend that the development of cross-strait relations influence Taiwan s decision to expand its foreign relations into the Southeast Asia region. Chen compared Taiwan s investments in Mainland China and Southeast Asia, and then argued that Taiwan s go south investment mainly influenced by the risky factors of investing in the Mainland 14. Taiwan s investment in the Mainland could be threatened at anytime due to the international political status of Taiwan, domestic political instability in China, and to avoid Taiwan s economic dependent on China 15. The unresolved status of cross-strait relations is one of the main reasons for Taiwan to enlarge its business and investment into Southeast Asia countries. The Taiwanese government finds an alternative to cope with the economic problem of Taiwan Strait through improving economic relations with neighboring countries in Southeast Asia. Similarly, Lin also provided strong arguments to explain Taiwan s decision on going southward policy. He asserted that there were several potential obstacles that could endanger Taiwan s investment in Mainland China such PRC s unstable domestic political conditions, changeable policy, and hostile and unfriendly attitudes toward Taiwanese investments 16. Those conditions influence the Taiwanese government to spread out their investment and business network into Southeast Asia region including Indonesia. Both Chen and Lee concerned about the negative impacts of Taiwan s economic dependence and highest fever of investments toward the Mainland. Hence scholars from this perspective concluded that due to the unstable cross-strait relations, Taiwan move forward to the Southward Policy which 14 Xiangmiang Chen, Taiwan Investments in China and Southeast Asia: Go West, but Also Go South, Asian Survey, Vol. 35, No.5, May 1996, pp Ibid. 16 Chun Hung Lin, Critical Assessment of Taiwan s Trade and Investment Relationship with ASEAN Countries in the Past, Present and Future, Miskolc Journal of International Law, Vol. 7, No.1, 2010, p

26 enables Taiwan to protect its economic interest while also increase its political relations with neighbor countries in the region. Scholars on this approach more likely classified as realist looking, because they stressed the importance of great power, which on this context China that endorsed Taiwan to diversified it economic expansion. Realist approach is pessimistic about the possibility of cooperation among state actors, however, they believe that state cooperate with others if only the pursuit of national interests or the existence of hegemony actor. The existence of hegemony actor could be perceived as a threat or balancer on the system, thus state can either balancing or bandwagoning. 17 On the case of Taiwan, China perceived as a threat for Taiwan s economic, thus Taiwan tried to balance it by diversifying its economic activities into Southeast Asia countries. Scholars on this approach lack of explanations about China s response toward Taiwan expanding economic in Southeast Asia. (4) People-to-People Approach In this approach, scholars argued that Taiwan has been able to maintain its relations with countries in Southeast Asia due to the role of Taiwanese businessmen and entrepreneurs that invested their capitals in the region, thus creating economic and political linkages between Taiwan and those neighboring countries. Chen examined that there were approximately 30,000 Taiwanese businessmen invested their capitals in Indonesia. 18 They brought their family and settled down in Indonesia that eventually influence the relations between the Taiwanese and the Indonesian government in terms of issue of permanent 17 For the clear explanations about balancing and bandwagoning please refer to the Walt s article, Stephen M. Walt, Testing Theories of Alliance Formation: The Case of Southwest Asia International Organization, Vol. 42, No. 2 (Spring, 1988). p Chen Jie, Human Dimensions of Taiwan Southeast Asia Economic Interdependence: A Preliminary Observation in Samuel C.Y. Ku, ed., Southeast Asia in the New Century: An Asian Perspective (Kaohsiung: Center for Southeast Asian Studies, National Sun Yat-sen University, 2002), p

27 resident status, and to set up so called Taipei Schools to provide education for those children of the Taiwanese businessmen. 19 These Taiwanese businessmen and entrepreneurs invested their capital and worked together with the local Indonesian or Chinese descent entrepreneurs that build the economic linkages among them. Their interaction were massive that eventually encourage the government on both sides to cooperate each other such set up the regulations for investment and on how the recipient government maintain the dynamic of domestic political conditions that can create a favorable environment for the investments. Chen analyzes the case of Taiwan relations with Southeast Asia countries from the constructivist approach that focus on the role of people-to-people interactions. People on the context of Taiwanese business people influenced state to state relations because their movement of capitals and family to their host countries. Their presence on the host country influences the state relations in terms of issuing visa and providing better living. On this case, Taiwan works as economic and security provider for its citizen that are investing overseas. In order to fulfill the needs of its citizen, Taiwan interact with those host countries. This approach clearly pointed out the role of people to promote state to state relations. Though, it also lack of evaluations about the strength of people in order to improve state to state relations. It did give Taiwan s bargaining power but the measurement of the power that Taiwan earned has not been addressed yet Indonesian Perspectives Scholars holding to the Indonesian perspective claimed that there were two main arguments that could explain Indonesia and Taiwan strong economic relations: policy of separation of politics and economics, and (1) Policy Separation of Politics and Economics 19 Ibid 14

28 Scholars from this camp asserted that Southeast Asia countries implemented the policy separation of politics and economics when dealing with the issue related to Taiwan. This argument derived from the fact that Southeast Asia nations maintain unofficial economic relations with Taiwan while remain adhere one China policy regarding to the PRC and Taiwan political status. The policy separations between economics and politics make Southeast Asia countries relations with Taiwan visible. Ku strengthen this argument on his article that analyzed the case studies of PRC missile test in the Taiwan Strait during the period He argued that Southeast Asia countries continue to promote neutral positions during the period of missile test due to the implementation of separation of politics and economics policy. 20 The policy separation of politics and economics conceive the idea that politics and economics could be managed independently and not always overlapping each other. In this context, Southeast Asia nations recognize the political dispute between PRC and Taiwan, thus in order to gain win-win solution from the cross-strait relations, they continue to recognize one China policy while acknowledging Taiwan as a strong economic entity in the region by conducting an unofficial economic cooperation. The realization of this policy could give benefits for Southeast Asia countries where they enjoy economic benefits both from China and Taiwan but at the same time would not trigger any hostility against the two Chinese regimes regarding issues of cross-strait relations. 21 Hence, most countries in Southeast Asia conducted this policy to avoid any possibility of high conflict escalation in the region that could also threaten their economic and political interests. Scholars on this spectrum classified within the realism approach that differentiates between economics and politics issue. As for the proponents of liberalist approach, they argued that economic issues can overlap the political issue. However, it is conversely for the 20 Samuel C. Y. Ku, Southeast Asia and Cross-strait Relations: The Policy of Separation of Politics and Economics, Journal of Contemporary China, Vol.7, No.19, 1998, p Ibid., p

29 proponents of realism, they claim that politics should be differentiates from economics thus create a hierarchy among issues. The strength of this approach is provide different insight toward Southeast Asia, China and Taiwan relations that explain how state maximize its economic interest while keep avoiding political disputes between two political entities. However, it also has drawback that made an argument generalizations toward the whole Southeast Asia countries, whereas each country has different policy characteristics. (2) PRC s Factors within Indonesia and Taiwan Relations The emergence of China also influenced the discourse on Taiwan-Indonesia relations from the Indonesian perspective. Scholars from this camp examined the triangular relations of Indonesia, China and Taiwan using political economy indicators to outline pattern of interaction among them. Debate about Indonesia, China, and Taiwan relations would always cover the historical period from the year 1950s until the year of 1990s which marked by the changing of dynamic relations among three entities. As noted by Ku, during the early period of 1950s, Indonesia relations with China and Taiwan was motivated by the political issues, but the pattern of interactions were shifted from politics into economically driven interests in the early 1980s. 22 Relations between Indonesia, China and Taiwan from the 1950s until 1980s were marked by the diplomatic struggle imposed by Taiwan and Mainland China. Indonesia recognized the PRC in the 1950s and adhere one-china policy as the main principle of foreign relations with the two Chinese regimes. However, Indonesia-China relations were ended in the 1967 followed by the communist coup that occurred in Indonesia accused Beijing as the main proponents of the coup that eventually led Indonesia to suspend its diplomatic relations with Beijing for 23 years since Though Indonesia suspended its diplomatic relations with China, it did not necessarily recognize Taiwan as the representative 22 Samuel C.Y. Ku, Indonesia s Relations with China and Taiwan: From Politics to Economics, Asian Perspective, Vol. 26, No.4, 2002, p

30 of Chinese government. The formal relations with Taiwan occurred in 1971 when the Taiwanese government was allowed to set up the Chinese Chamber of Commerce in Jakarta. These politically motivated relations began to change during the period of 1980s which marked by several important events among Indonesia and China. First, China s open policy that began in 1978 focused on the economic development with the neighboring countries. Second, it was the resumption of direct trade between Indonesia and China in The last event was the normalization of Indonesia-PRC relations that happened in August 1990s. Since then Indonesia-PRC relations were improved and shifted into economically driven interests. At the same time, Indonesia and Taiwan relations also improved gradually due to the economic interests between them. After the Chinese Chamber of Commerce was set up in Jakarta, Taiwan and Indonesia enhanced their economic cooperation in agricultural sectors and investments. The peak of their relations occurred when Taipei was allowed to rename its trade representative office in Jakarta into Taipei Economic and Trade Office (TETO) in the late 1980s which gave politically meaning status for Taiwan. Moreover, in 1994, the Taiwanese government also launched the economic program called Southward Policy to improve economic relations with countries in Southeast Asia. In sum, as argued by Ku, the primacy of economic interests was influenced by the changing pattern of relations among Indonesia, China and Taiwan since the mid 1980s. 23 From the same perspective, Irawan also examined the status of cross-strait relations and its influenced toward Indonesia-China-Taiwan relations. He shared similar ideas with Ku that Indonesia will remain adhere one-china policy principle but keep nurtured harmonious relations with Taiwan due to the economic reasons. Though both scholars shared similar ideas, Irawan deepens his explanations on the importance of cross-strait relations toward 23 Ibid., p

31 Indonesia s national interest in the future. He compared the three future possibilities with the status of cross-strait relations and the impacts for Indonesia: (1) if the two Chinese regimes used military force to solve the status on the Taiwan strait, then Indonesian s economy would be threaten; (2) if the status quo were maintained, Indonesia could focus on the internal structural reform; (3) if the peace unification over the Taiwan strait occurred, it may divert Taiwanese investment from Indonesia to China thus reducing Indonesia s net marginal economic benefit, or create better economic opportunities for Indonesia from the unification of Taiwan and China. 24 Irawan s analysis is based on the calculation of cost and benefit that Indonesia would get from the development of cross-strait relations. Nevertheless, he shared similar ideas with other scholars that concern over the economic primacy from Indonesia and cross-strait relations. Scholars on this field, also classified as the proponents of realist because their analyses are based on the calculation of national interest and the role of hegemon (on this context is PRC) that endorse Indonesia maintain triangular relations both with China and Taiwan. The scholars employ the realist approach that analyzes Indonesia as the subject of research since Indonesia shared unique characteristics and relations with Taiwan and China. However, the explanation has weakness that lack to explain how state s interest could create cooperation among states. They treat state s interest as strategy to cooperate with others but not to explain how state form that interest. In sum, both perspectives shared thoughtful arguments and ideas that contributed to the development of Taiwan and Indonesian studies. Their analysis also covered broad range of issues and approaches that made the discourse on Taiwan-Indonesia relations more fruitful. Overall, the debate over Taiwan-Indonesia relations could be highlighted as seen in the table below: 24 Andi Irawan, The Political Economy of Indonesia and Cross-Straits Relations, in Ho Khai Leong and Hou Kok Chung, eds., Ensuring Interests: Dynamics of China-Taiwan Relations and Southeast Asia (Malaysia: Institute of China studies, 2006), pp

32 Table 1-2. Summary of Literature Review T A I W A N P E R S P E C T I V E Perspectives 1. The primacy of Taiwan s economic diplomacy and interests 2. The shifting international order Main Arguments Taiwan has been able to maintain its relations with Indonesia due to Taiwan economic power and interests Taiwan has been able to build economic linkages with Indonesia due to the shift in international order that create multiple channel of contacts and the absence of hierarchy among issues Approaches Strength Weaknesses Liberal-political economy approach Liberal-complex interdependence approach Clearly pointed out Taiwan s main interests in strengthening its relations with countries in Southeast Asia Obviously explained the conditions of international order that influence state actions and foreign policy Lack of explanation about how economic interest can give spillover effects to the political relations between Indonesian and Taiwan. Failed to explain how the third characteristics of complex interdependence the minor role of military forces affected Taiwan s diplomatic maneuvers in the Asia-Pacific I N D O N 3. The development of cross-strait relations 4. The influence of people-topeople interactions 1. Policy of separation of politics and economics Taiwan has been able to cooperate with Indonesia due to the perception of economic threat that stems from PRC (cross-strait relations Taiwan has been able to build economic linkages with Indonesia due to the role of Taiwanese businessmen that act as a diplomatic weapon for Taipei through their huge investments Indonesia has been able to maintain its economic relations with Taiwan due to Realist approach Constructivist approach Realist approach Completely examined the impact of cross-strait relations toward Taiwan s foreign policy Apparently discussed how non-state actors and multi track diplomacy helped a country to interact with other countries Provide different insight toward Southeast Asia-PRC- ROC relations that not merely focused on political and/or Missed the analysis about how PRC s response toward Taiwan s relations with countries in Southeast Asia Their analyses do not entirely cover the explanations about the effectiveness of Taiwanese businessmen to promote Taiwan- Southeast Asia political relations. They only address the bargaining power that Taiwan earned from the existence of Taiwanese investment overseas The explanations drawn a generalization in which discussed the issue from the whole picture of Southeast Asia countries as a 19

33 E S I A N P E R S P E C T I V E 2. Cross-Strait Relations Approach the separation of politics and economics Indonesia has been able to build economic relations with Taiwan due to the national interests of Indonesia and the role of PRC among Indonesia and Taiwan relations Realist approach Source: from the Author economic interests but how to maximize economic interest while keep avoiding political disputes between PRC and Taiwan Obviously describe Indonesia s political and economic interests toward its relations with Taiwan and PRC region. The analysis of each state behavior should be included since each country share different policy characteristics Lack of explanation about how state s interest could create cooperation among states. This approach treat state s interest as strategy to cooperate with others but not to explain how state form that interest The table above clearly pointed out the domain issues and approaches that have been done by other scholars about Taiwan and Indonesia relations. The assessment of strength and weaknesses also helped to enrich the discourse on Taiwan and Indonesian studies. Taiwan s perspective have been able to explain the rationale causes for Taiwan s ability to conduct relations with countries in Southeast Asia though lack of political diplomatic relations. However, the debate still left room for further improvement particularly from the Indonesian perspective that still far away behind the existing research from Taiwan perspective. Thus this thesis will enrich the existing discussion from the Indonesian perspective. The main point that has not been addressed from the Indonesian perspective is about people-to-people interactions that helped to promote Taiwan and Indonesia relations. People interactions within economic and socio-cultural relations between Indonesia and Taiwan are massive. In terms of trade and investment issues, Indonesian business people particularly Indonesian ethnic Chinese serve as independent economic agents for Indonesia and Taiwan. In terms of socio-cultural issues, Indonesian migrant workers and Indonesian students play their roles to promote governmental relations. Indonesian migrant workers act as independent 20