Committee: Association of Southeast Asian Nations

Delegation: Indonesia
Delegate: Igor Terček
Topics: A) The effects of economic insecurity in the
Southeast Asian region
B) Consequences of the shifting balance of
power in the Asian Pacific

A) The effects of economic insecurity in the Southeast Asian region

The Republic of Indonesia is the sixth country of greatest wealth and income disparity in the world,
according to some research the four wealthiest men in Indonesia have more wealth than the
combined total of the poorest 100 million people. This is due to historical setbacks affecting not only
Indonesia, but the entire Southeast Asian region. Disparity in Indonesia has been growing faster than
anywhere in the world for the past 20 years. Growing inequality is undermining the fight against
poverty, putting a brake on economic growth and threatening social cohesion. Colonialism and
continuous warfare in the region have caused severe struggles in the past that still echo today,
amplified by the recent crisis caused by the COVID-19 pandemic.

One of the main major problems present in the region is the development gap between rural and
urban areas. On average rural areas are up to 60% less developed than near urban regions. Economic
and agronomic abuse during colonialism caused massive setbacks in all areas. Recurring wars
destroyed the region’s economic power and set the stage for today's capitalist economy where a
handful of people own most of the resources.

Inflation, unemployment and corruption stand as the grunt of the problems in all of Southeast Asia
and cannot be solved easily due to the unfortunate history of the region. The influence of westrern
economy on the region has had mixed effects, boosting the economy while only benefiting a select
few. Corruption stands as the leading cause of unemployment and poor working conditions, bribing
higher-ups in companies or buying/selling resources from specific vendors. This causes distrust in
investing and henceforth hinders any growth due to the inability to hold anyu investments.
Corruption also hinders growth by altering market processes and increasing the price of transactions.
Indonesia suggests enforcing anti-corruption acts and striking down harder on those who are guilty.
Poorly educated workers with an inability of further education cause a complete mismatch of market
demands which in turn leads to unemployment.
Inflation in the region is caused by internal fluctuations based on the economical system but also by
global market fluctuations, specifically in nations with large exports. The region is susceptible to
fluctuations in commodity prices, including those of oil, food, and other essential goods. Changes in
global commodity markets can impact the cost of living and contribute to inflationary pressures.
Currency movements also influence inflation in the region. Depreciation of a country's currency can
lead to higher import prices, potentially contributing to inflation. The COVID-19 pandemic has had
widespread economic effects, including in Southeast Asia. Disruptions in supply chains, changes in
consumer behavior, and economic contractions have influenced inflation dynamics in the region.
Many countries in the region have adopted inflation targeting as part of their monetary policy
framework. Central banks set specific inflation targets and use various tools to achieve and maintain
price stability. Indonesia urges nations' central banks to better manage inflation rates within their
reach as to better help reduce disparity in wealth than to make a profit.

Indonesia recognizes informal economy to be the leader of economic issues in the region as it has
developed quite a substantial informal economy producing a large amount of non-taxable
transactions causing the government to lose money and hindering further progress. The informal
economy in Southeast Asia is diverse, including street vending, small-scale manufacturing,
unregistered services, and various forms of self-employment. This sector extends across both urban
and rural areas, involving a multitude of economic activities that cater to local needs and demands.
Micro and small enterprises (MSEs) are prevalent in the informal economy of Southeast Asia. These
businesses often have trouble includnig themselves into formal economy due to the already
apparent lack of funding by the government. The informal sector lacks stability and often crashes
causing many lives being ruined. Employees in this sector often lack labour rights and get underpaid.
A big problem arrises when quality control, consumer protection and supervision of the sector
comes isto consideration. Lack of funding caused by tax avoidance of the informal economy sector
leads to the governments not being able to stop it and the economy growing larger until the
regulated sector of the economy vanishes along with the government. Indonesia also recognizes that
the informal economy is currently necessary and that it is crucial that it stands until it can get
legalized.
B) Consequences of the shifting balance of power in the Asian Pacific

Indonesia recognizes its strategic geographical location and has been a key member in the regional
economy. The changing power dynamics in the Asian Pacific have both opportunities and challenges
for Indonesia's economic interests. The rise of certain nations in the region as economic
powerhouses presents new trade and investment prospects for Indonesia. Strengthening economic
ties with emerging powers could diversify Indonesia's trade portfolio and stimulate economic
growth. However, the shifting balance of power also brings about economic uncertainties.
Demographic trends, including population growth, aging populations, and migration patterns, have
economic and social consequences. As major powers grapple with demographic challenges, these
issues can affect their economic competitiveness and influence regional dynamics, including labor
markets and social welfare systems. Fluctuations in global trade dynamics, currency values, and
market trends may impact Indonesia's export-oriented economy. Moreover, increased competition
for resources and markets among major players could potentially marginalize Indonesia if not adeptly
navigated. The power struggle apparent in the region between global superforces have Indonesia
along with the entire region in a state of indecicivness about where to navigate. The Asian Pacific is a
major driver of global trade, and changes in power dynamics influence trade patterns. The
emergence of new economic powerhouses and shifts in supply chain dynamics can reshape global
trade routes and impact the economic interests of countries both within and outside the region. The
competition for influence has led to increased investment in infrastructure projects by major powers
in the region. China's Belt and Road Initiative (BRI), for example, has seen substantial investments in
various countries. While such projects can contribute to economic development, they also raise
concerns about debt dependency and the potential for geopolitical leverage. Indonesia emphasizes
it's neutrality and urges for all nations to work together and trade with everyone as to boost the
economy.

Indonesia, as the largest archipelagic state in the world, faces unique security challenges that are
closely tied to the evolving balance of power in the region. The rise of military capabilities in some
nations may lead to increased competition for regional dominance, raising security concerns. The
shift in power dynamics has resulted in an arms race and military modernization among several
countries in the region. Increased military capabilities and strategic competition raise the specter of
regional security challenges. The potential for miscalculation and conflict escalation poses risks to
stability and peace in the Asia-Pacific. The nations must adapt its defense strategies to address
emerging threats while preserving its commitment to regional stability and peaceful coexistence.
Furthermore, the shifting power dynamics may also impact territorial disputes in the South China
Sea, an area of strategic importance for Indonesia. Competing claims in the South China Sea involving
nations such as China, Taiwan, Vietnam, the Philippines, and others have escalated tensions, leading
to concerns about potential conflicts and the need for diplomatic resolution. As power dynamics
evolve, concerns about human rights, governance, and democratic principles come to the forefront.
Countries with different political systems and values may find themselves at odds, raising questions
about the compatibility of diverse governance models in the region. Ensuring maritime security and
asserting sovereignty over its exclusive economic zones become paramount concerns. Indonesia
urges all nations on setting up diplomatic initiatives to promote dialogue and cooperation,
advocating for a rules-based order that safeguards the rights of all nations in the region.

As the balance of power shifts, diplomatic maneuvering becomes crucial for Indonesia. The COVID-19
pandemic has underscored the importance of health diplomacy. The ability of nations to respond
effectively to global health crises is influenced by their geopolitical standing and relationships. The
shifting balance of power affects cooperation on issues like pandemic preparedness, vaccine
distribution, and public health initiatives. The consequences of the shifting balance of power also
extend to environmental and climate issues. Cooperation on climate change mitigation, resource
management, and sustainable development becomes crucial, as decisions made by major powers
can have global environmental repercussions. The nation's foreign policy must adapt to the evolving
geopolitical landscape, striking a delicate balance between maintaining good relations with
traditional allies and fostering new partnerships. Regional forums such as the Association of
Southeast Asian Nations (ASEAN) play a crucial role in facilitating dialogue and cooperation among
nations. Indonesia's commitment to non-alignment and active participation in regional forums, such
as ASEAN, is instrumental in navigating the diplomatic complexities of the changing power dynamics.