August 2025

Bears, BRICS and Garudas: How Indonesia “Socialized” with Russia?

thegeoeconomics.com | August 10, 2025

Andhini Octa Maharatih and Alinda Rana Permata Surya

On the sidelines of the 28th St Petersburg International Economic Forum , *June 18-21* 2025, Russian President Vladimir Putin held a meeting with President of Indonesia Prabowo Subianto during his state visit. [Photo: RIA Novosti/ Kremlin Photo Bank. ]

◉ THE RELATIONSHIP BETWEEN Indonesia and Russia has been warm since before Indonesia’s independence. Russia (the Soviet Union) played a role in supporting Indonesia’s independence and actively advocated for its right to sovereignty. Even after Indonesia officially gained independence, cooperation between Indonesia and Russia (the Soviet Union) has continued to this day, beginning during the era of Indonesia’s first president, Soekarno. The closeness between Indonesia and Russia has been reflected in strong diplomatic relations and bilateral cooperation since 1950—five years after Indonesia became an independent nation. These diplomatic ties have been mutually beneficial. Early on, Indonesia purchased a pair of fighter jets and two helicopters from Russia. In return, Russia requested payment in the form of Indonesia’s primary commodities, such as rubber and palm oil.

In addition to defense and economic cooperation, Moscow offered several scholarships for Indonesian students to study in the nation. Nikita S. Khrushchev, the Soviet leader at the time, warmly welcomed Indonesian students to the University of Russia in Moscow in 1960. Infrastructure development, such as the construction of the Bung Karno Stadium, was also credited largely to Soviet support.

Why Indonesia Prefers Russian Defence Supply Over American?

Indonesia has viewed Russia as a strategic partner in defense and security technology development. In addition to being a producer of modern weaponry, Russia offers relatively low prices and simpler regulations for defense equipment sales. Although Indonesia has not yet fully developed its own defense equipment, Russia has shown openness to technology transfer, allowing Indonesia to modify and adapt this technology domestically. This contrasts with the United States, whose strict regulations are seen as less favorable to Indonesia. As a result, Russia has become a more attractive partner for long-term defense and diplomatic cooperation.

Although relations cooled after the Indonesian Communist Party’s (1965 G30S) rebellion—when Indonesian students in Russia were repatriated—ties gradually improved after the political situation stabilized.

New Order and Post-Suharto Era

During the New Order regime, Indonesia leaned more toward the West due to the lingering effects of the communist threat. Under President Soeharto, Indonesia’s relationship with Russia began to recover after 22 years, marked by a diplomatic visit to Russia in 1989.

Following this, Indonesia entered a difficult period of political transition, facing domestic conflicts that required inward focus. Relations with Russia improved again under President Megawati Soekarnoputri, the fifth President of Indonesia. Under her leadership, cooperation that had stalled was revived in 2003, especially in technology and economic development.One example was the cooperation between Vneshtorgbank and PT Bank Mandiri to support Indonesia’s banking system during a global financial crisis. Although Megawati’s presidency was brief, she reopened channels for engagement between the two nations.

President SBY’s Era

President Susilo Bambang Yudhoyono (SBY) continued and expanded this cooperation. Beginning in 2007, SBY intensified Indonesia’s bilateral relations with Russia, focusing on new areas such as investment, defense, and natural resources—including bauxite, aluminum, oil, and gas. These areas marked a new phase in Indonesia–Russia cooperation.

President Susilo Bambang Yudhoyono also promoted soft power diplomacy, particularly in tourism, and collaborated with Russia in defense modernization. Cooperation included technology transfers to Indonesia’s domestic defense industries such as PT Pindad, PT Dirgantara Indonesia, and PT PAL.

Indonesia’s closeness with Russia was evident during SBY’s presidency, especially in economic sectors. For instance, palm oil exports—although only 2% of Indonesia’s total exports in 2011—were considered significant. When talks of Indonesia joining BRICS arose, SBY remained neutral, stating that Indonesia was transitioning from a developing to an emerging economy and aimed to strengthen its national economy before joining.In competing for the Russian market, Indonesia faced challenges, especially from European countries dominating exports. To increase competitiveness, Indonesia sought to promote exports of automotive products, footwear, tires, and furniture. Trade between Russia and Indonesia increased by 4.9% in the 2011–2014 period for non-oil and gas sectors and continued to improve in 2016.

Jokowi’s Era, Connectivity and Strategic Expansion

Under President Joko Widodo (Jokowi), Russian investment in Indonesia significantly increased. Jokowi encouraged local governments to establish sister-city relationships to attract long-term and sustainable investments. Several sister-city partnerships were established, including:

Jakarta–Moscow (continued from SBY’s era)
Palembang–Belgorod
Yogyakarta–St. Petersburg
Magelang–Tula

The nature of these city connectivity projects are different, while all of them cementing Indonesia- Russia ties. The Magelang–Tula partnership, for instance, is based on similarities in geographical conditions. Tula is an advanced city in industry and agriculture, while Magelang, located between Mount Merbabu and Mount Sumbing, has a cool climate suitable for highland farming. The partnership, however, focuses more on public services, branding, economic development, and environmental management.

Meanwhile, the Yogyakarta–St. Petersburg partnership emphasizes cooperation in arts, culture, tourism, and education—proving effective in strengthening diplomacy during the Jokowi era. Long-term investments were also pursued, such as the oil refinery in the Jenu area, Tuban. This refinery, under cooperation between PT Pertamina and Russian company Rosneft, has been under construction since 2016 and is projected to process 30 million liters of fuel daily, with a capacity of 320,000 barrels per day. This project aims to enhance national energy security and reduce fuel imports.Despite geopolitical challenges such as the Russia–Ukraine conflict, Indonesia maintains a neutral, “free and active” foreign policy—supporting Ukraine’s independence while still partnering with Russia.

Indonesia in BRICS

[Foreign Minister of Indonesia Sugiono during the arrival of head of delegations at Kazan Expo to attend the 16th BRICS summit in Kazan, Russia. Kirill Zykov / BRICS-KAZAN- RIA Novosti]

Indonesia’s diplomatic presence is expected to grow further following its entry into BRICS on January 6, 2025. This move comes amid a global trade war triggered by U.S.-imposed tariffs. BRICS aims to challenge Western dominance, particularly that of the U.S. and its allies. Indonesia’s entry strengthens the bloc and provides new opportunities for economic cooperation. As a BRICS member, Indonesia can benefit from easier access to Russian defense technology and increased investment opportunities. Russia, in turn, sees Indonesia as a vital partner in Southeast Asia and a gateway to ASEAN markets. This partnership opens new avenues for cooperation in energy, technology, defense, and trade. On the global stage, both nations are likely to support each other in international forums—especially regarding world order reform, state sovereignty, and support for Palestine. Indonesia’s free-active foreign policy adds value to BRICS, helping position the bloc as an alternative for developing nations beyond Western influence. However, Indonesia must balance its global diplomacy carefully, ensuring that closer ties with Russia do not strain its relationships with Western nations like the U.S. and EU. With Indonesia joining BRICS and Russia seeking to expand its global influence, the bilateral relationship is expected to become more intensive, strategic, and mutually beneficial.

Also Read: The Falcon and Bear Braving a Storm: UAE and Russia in the Dawn of Multipolarity

[ Andhini Octa Maharatih and Alinda Rana Permata Surya are interns at COGGS from Surabaya, Indonesia, and students of International Relations at UPN Veteran Jawa Timur University. The opinions expressed do not reflect the views of COGGS. ]

Bears, BRICS and Garudas: How Indonesia “Socialized” with Russia? Read Post »

Economist Rajiv Kumar at GSEF 2025: Six Defining Global Transitions

thegeoeconomics.com | August 9, 2025

In a speech at the plenary session of Global South Economic Forum, Rajiv Kumar, a prominent economist and advisor to COGGS, delivered a powerful message on the world’s ongoing transformations and the pivotal role the Global South can play in shaping the new world order. Here’s a detailed look at his key arguments and the call to action he extended to the international community at the forum on June 17, 2025.

The World in Historical Flux

While addressing the GSEF, Kumar, the former Vice Chairman of Niti Ayog, Indian government’s finance planning thinktank opened by stressing that the world is currently experiencing an “unprecedented historical transition.” He argued that the magnitude and nature of these changes are unlike anything seen before, presenting both challenges and opportunities, especially for the nations of the Global South.

Six Defining Global Transitions

Drawing from his forthcoming book, “The Everything All At Once: The Six Global Transitions in the World Today,” Kumar outlined the six critical transformations shaping our era:

I. Geopolitical Shift: The previous notion of “the end of history” is now outdated. Instead, Kumar says, “a new history is beginning at the moment,” marked by shifting global power dynamics.

II. Geoeconomic Fragmentation: He challenged the idea that the world is economically flat, explaining that barriers, protectionism, and fragmentation are on the rise.

III. Geophysical Realignment: The locus of prominence is shifting from the Euro-Atlantic world back to the Asia-Pacific – a return to a historical norm prior to Western hegemony.

IV. Technological Revolution: Kumar described today’s technological advances, especially in artificial intelligence, as more dramatic and rapid than any prior industrial or technological revolution. He warned of an imminent “singularity,” where machine intelligence outpaces human intelligence.

V. Climate Change Crisis: He highlighted the urgent threat climate change poses, particularly to the Global South, criticizing northern nations for rhetorical support without adequate action. Kumar warned of a narrow 20-year window to avert irreversible damage.

VI. The Rise of the South: Noting that 85% of the world’s population resides in the South, contributing some 40% of global GDP—and now driving global growth more than advanced economies—Kumar underscored the region’s economic and demographic dynamism.

The Opportunity: Making This the Century of the South

Amidst these transitions, Kumar made a compelling case for the Global South to “work together in solidarity and strategic collaboration.” He further emphasized that the South is not monolithic but contains its own “north” and “south.”

He identified the expanded BRICS grouping (now including countries such as the UAE, Ethiopia, Egypt, Indonesia, among others) as the ideal platform to drive this movement forward. However, he urged BRICS to become more than a “talking shop,” advocating for concrete progress on:

Climate change mitigation,
Food security,
Harnessing artificial intelligence for development,
Exploring the creation of a new reserve currency.

India and China: Partners in Shaping the South

Economist Rajeev Kumar highlighted a special responsibility for India and China, the two largest civilizational economies. He acknowledged China’s lead, especially in strategic technologies, and proposed that “as a senior partner we look towards China to give us the lead for how to create the South-South cooperation and make it effective, implementable and operational.”

Kumar concluded with a call to devise “the modality for BRICS and, within that, India-China bilateral cooperation to play the role of making the 21st century the century of the South.” He appealed for the opportunity to design and operationalize “a new world order which is rule-based and not hegemonic.”

Economist Rajiv Kumar at GSEF 2025: Six Defining Global Transitions Read Post »

ASEAN Economic Integration in the Face of Global Shocks: Towards Sustainable Supply Chains

thegeoeconomics.com | August 8, 2025

Andhini Octa Maharatih and Dhea Marsha Ananda

ECONOMIC INTEGRATION INVOLVES aligning and unifying economic policies between countries by reducing or eliminating tariff and non-tariff barriers, with the primary goal of boosting trade and lowering economic costs. One such example is the ASEAN economic integration that formed the ASEAN Economic Community (AEC). ASEAN economic integration is when ten member countries join together to form a single market-based economic community with the aim of creating an efficient and integrated single market and production base across all member countries. There are several stages in economic integration:

I. ASEAN Free Trade Area (AFTA): Established in 1992 with the aim of reducing tariffs and non-tariff barriers among ASEAN members. The six member countries began to gradually reduce their tariffs until 2010, when tariffs were reduced to 0–5 percent. Vietnam, Laos, Myanmar, and Cambodia, which joined later, were given additional time until 2015.

II. Complementation of Brand-to-Brand/ASEAN Industrial Cooperation (AICO): This policy has been in effect since 1988 and allows manufacturing companies throughout ASEAN to lower their tariffs. One such industry is the auto parts industry.

III. AEC Blueprint 2015 and 2025: The AEC was formally established at the end of 2015, with the aim of creating a single market and production base for ASEAN member countries. The AEC Blueprint 2025 enhances integration through connectivity, digitalization, inclusion, and regional competitiveness..
IV. Regional Economy and RCEP Regional Comprehensive Economic Partnership(RCEP) was signed in November 2020 by ASEAN together with Australia, China, Japan, South Korea, and other countries. Since January 2022, RCEP will expand trade integration in the Asia-Pacific to cover 30% of the world’s total population and GDP.

The purpose of this economic integration stage is to identify differences in the levels of development and capacity of ASEAN member countries. With this, ASEAN can move from a basic stage of integration to a deeper one with minimal risk and allow time for all ASEAN member countries to adapt.

Additionally, economic integration has a primary scope of a common market, where trade regulations and service standards begin to align. There is also harmonization of priority sectors, meaning ASEAN has selected 12 specific sectors to enhance competitiveness and intra-regional investment. Following that is financial integration, where ASEAN has an ASEAN+3 inter-country savings fund to assist countries in the event of a sudden financial crisis. Lastly, there is the institutional framework or ASEAN’s main rulebook to ensure all countries integrate under clear rules. Besides the rulebook, there are mechanisms to monitor ASEAN’s progress to ensure integration is carried out in accordance with plans and regulations (Menon, 2010).

ASEAN economic integration also faces several challenges and has its advantages. The ASEAN Economic Community has created a single market and a shared product base of more than 600 million consumers, as well as expanding market opportunities for companies within the ASEAN region. Integration also encourages domestic reform in many ASEAN member countries, such as legal transparency, investment climate, and better governance. Additionally, it has positioned ASEAN as a global production and integration hub through the Regional Comprehensive Economic Partnership (RCEP). However, despite the numerous benefits, the ASEAN Economic Community also faces challenges such as economic disparities among member states, for example, the significant differences in GDP per capita among ASEAN members, which hinder policy harmonization and market access. There are also institutional limitations, as ASEAN relies on consensus and lacks a strong central authority, leading to slow policy implementation and inconsistencies across member states. Finally, there are non-tariff barriers such as inconsistent product regulations and trade procedures (Kiyoshi Kobayashi, 2018).

It can be concluded that economic integration creates an open and unified area to expand the market. In a systematic effort to build a Single Market and a unified production base among ASEAN member states, ASEAN economic integration is being implemented in stages. The AEC has enhanced economic opportunities, inclusive growth, and regional competitiveness in ASEAN. However, full success still depends on ASEAN’s ability to address internal issues such as development delays, infrastructure problems, and legal challenges.

Supply Chain in ASEAN

The supply chain in the ASEAN region is a system of cooperation between ASEAN member countries in effectively managing services, goods, information, and investment. It manages everything from raw materials, manufacturing processes, distribution, to the end consumer (Secretariat, 2023). The supply chain aims to improve ASEAN’s economic competitiveness at the global level by maintaining the smooth flow of trade, especially amid the challenges of the economic crisis. In addition, ASEAN also wants to have a supply chain that is inexpensive, fast, and stable. To achieve these objectives, ASEAN has a framework that serves as its primary guide: efficiency, ensuring that all processes are carried out efficiently without wasting time, costs, or resources. Resilience is also a key component, preparing systems to remain operational even during crises and ensuring that trade continues uninterrupted.

The supply chain in ASEAN can operate effectively due to investment coordination, where each country agrees to jointly fund infrastructure and technology projects. There is also the adoption of new technology, with ASEAN encouraging all parties to use modern technology in logistics and trade. Finally, there is the enhancement of human resource skills by training workers to manage modern logistics systems.

ASEAN’s main focus area currently is digital supply chain innovation, where ASEAN focuses on technology integration for the industrial revolution and the transformation of traditional transformations into digital ones in order to compete globally. Supply chain efficiency and resilience are ASEAN’s main focus in facing current global challenges. The five focus areas currently being developed by ASEAN are cross-border regulation and tariff cost reduction, digital transformation as a form of efficiency and more effective and easy supply chain tracking, ASEAN vertical integration both between companies and between countries to encourage partner trade and improve information exchange in the integrated supply chain, and finally industrial innovation to ensure product quality, durability and efficiency in the regional realm with easy access..

Meanwhile, the five ASEAN strategies and main actions in the regional supply chain include specific digitalization as a strengthening of the ASEAN single window, disaster mitigation policies for supply chain resilience and reduction of non-tariff measures that hinder, third is the diversification of sources and markets to be targeted as a strong regional coordination, fourth is the sector development roadmap as a coordination tool between the public and private sectors during economic obstacles, the last is economic corridors to improve the supply chain through an interconnected infrastructure network in market demand and supply, facilitating technology transfer through innovation partnerships and investment promotion to accelerate digitalization in the ASEAN economic sector.

One example of a Southeast Asian country is Thailand. Thailand is actively strengthening its position with a strategy of combining national policies and multilateral cooperation, strengthening its position as the regional logistics hub of ASEAN. The National Economic Policy Committee and relevant Thai government ministries are responsible for improving the connectivity of the ASEAN supply chain. In February 2024, Thailand ratified IPEF Pillar 2: Supply Chain Agreement. This provides access to mechanisms such as the supply chain council, crisis response network, and labor rights advisory board to enhance resilience against global disruptions. Additionally, operational implementation includes high-speed rail projects connecting Don Mueang and Suvarnabhumi airports. This project is scheduled to begin in 2025–2026 as part of the EEC infrastructure integration.

Initiatives such as real-time tracking, automation systems, and predictive analytics are enhancing the digitization of logistics to support operational efficiency and supply chain transparency. Thailand’s main objective in using this strategy is to reduce dependence on a single source (such as China), increase diversification, and improve resilience to pandemics and geopolitical disruptions. To achieve this goal, however, issues such as cross-agency policy synchronization, cross-sector investment stability, and interoperability between ASEAN countries must be addressed.

Despite several challenges, such as human resources, funding, and cross-border systems and sectors within them, it is hoped that this framework will enable ASEAN to position itself and maintain the integrity of its supply chain amidst the current global conditions. ASEAN’s efforts to increase efficiency and break away from dependence on a single resource source are challenging, given that ASEAN countries are not yet fully developed. Therefore, a monitoring system and policy implementation that maintains ASEAN’s centrality is necessary.

Climate Resilient Infrastructure : ASEAN’s Effectiveness in Disaster Mitigation
Southeast Asia is vulnerable to natural disasters amidst the current climate change issue. Geographically, ASEAN is located in coastal areas prone to flooding due to rising sea levels. Southeast Asia is located in the Pacific Ocean, which is vulnerable to other natural disasters such as earthquakes, tsunamis, and active volcanic eruptions. Furthermore, current global warming is triggering a number of new challenges, such as rising temperatures and long-term droughts. According to the AADMER work program report, 2,916 natural disasters were recorded from 2012 to 2020 due to climate change. Unexpected climate change certainly impacts the condition and resilience of existing infrastructure in Southeast Asia. Southeast Asia, as a global economic and agricultural growth network, needs to implement disaster mitigation to minimize direct losses caused by unpredictable extreme weather. Concrete steps such as early warning systems and collective cooperation are needed for climate-resilient infrastructure planning. ASEAN plays a crucial role in implementing disaster mitigation. If not implemented optimally, a domino effect could occur, harming many parties.

ASEAN, as a hub for global economic activity, is also experiencing increased energy consumption, given the industrial revolution and the significant increase in demand for natural resources, which also contribute to excessive carbon emissions and the greenhouse effect. Urbanization is also making the ASEAN region increasingly densely populated, requiring protection. Dependence on fossil fuels as a profitable commodity needs to be reduced to create a zero-emission region in line with the 2050 Net Zero Emission target. This is one of ASEAN’s challenges in mitigating natural disasters caused by climate change.

As a regional organization, ASEAN has adopted a key framework to be implemented in response to climate change. One such framework for mitigating natural disasters caused by climate change is the ASEAN Agreement on Disaster Management and Emergency Response (AADMER), which addresses an early warning system that encompasses comprehensive information and communication regarding natural disasters and public awareness to promptly respond to impending disasters. Planning and coordination with national and regional stakeholders to reduce losses, including utilizing military functions as public facilities for mobilization and safety, are also crucial. Collaborative and partnership efforts are also needed to assess the challenges faced by member countries, discuss them with regional organizations, stakeholders, partners, and allocate resources to invest in developing disaster management tools. However, ASEAN member countries certainly face a number of challenges.

According to the AADMER work program report, the challenges faced focus on data sharing and interoperability among member countries. ASEAN requires technical assistance to manage and share data and information regarding early warning systems. ASEAN is still working to strengthen partnerships with the AHA center (ASEAN Coordinating Center for Humanitarian Assistance on Disaster Management), disaster management offices, and other stakeholders. Furthermore, ASEAN is also working to develop risk assessments through relevant actors. Furthermore, what needs to be improved is the involvement of external parties to focus on scientific approaches that align with the AADMER vision to further explore disaster mitigation.

Meanwhile, other challenges such as technological and resource disparities are major obstacles to improving disaster mitigation facilities. Member countries like Singapore have successfully created an underground tunnel waste disposal system to address flooding and process waste and water more environmentally friendly, while Indonesia has developed a Carbon Capture and Storage (CCS) network in an effort to reduce carbon emissions. Meanwhile, less developed countries like Timor Leste, Cambodia, Laos, and Myanmar must face extreme heat and erratic rainfall patterns. In addition to vulnerable economies, government efforts to attract investors are challenging due to competition among ASEAN countries to fulfill their national interests. Other member countries like Vietnam, Indonesia, and Thailand have left the four less developed ASEAN member countries even further behind in terms of more appropriate disaster mitigation planning.

ASEAN has made significant strides in proposing work programs such as AADMER and leveraging relevant organizations and institutions to assist with disaster mitigation preparation. However, current challenges require further action, particularly regarding the equitable distribution of disaster mitigation facilities for member states vulnerable to natural disasters and extreme weather. With Timor-Leste in the group, ASEAN also needs to expand its reach to collaborate with East Asian countries with superior disaster mitigation systems and technology. This will allow for more predictable climate change impacts on ASEAN and mitigate significant long-term losses.

[ Andhini Octa Maharatih and Dhea Marsha Ananda are Indonesia based interns at COGGS. Opinion expressed doesn’t reflect the view of the organization. ]

References

Kiyoshi Kobayashi, K. A. (2018). Economic Integration and Regional Development: The ASEAN Economic Community. New York : Routledge (Taylor & Francis Group), Abingdon & New York.

Menon, H. H. (2010). ASEAN Economic Integration: Features, Fulfillments, Failures and the Future. ADB Working Paper Series on Regional Economic Integration, 1-34.

Secretariat, A. (2023). Framework on ASEAN Supply Chain Efficiency and Resilience. Jakarta: The ASEAN Secretariat.

The ASEAN Secretariat. (2020). ASEAN AGREEMENT ON DISASTER MANAGEMENT AND EMERGENCY RESPONSE (AADMER) 2021-2025. ASEAN Secretariat. https://asean.org/wp-content/uploads/2021/08/AADMER-Work-Programme-2021-2025.pdf

ASEAN. (2021). ASEAN State of Climate Change Report. The ASEAN Secretariat. https://asean.org/wp-content/uploads/2021/10/ASCCR-e-publication-Correction_8-June.pdf

Asian Development Bank. (2009). The Economics of Climate Change in Southeast Asia: A Regional Review. ASsian Development Bank. https://www.adb.org/sites/default/files/publication/29657/economics-climate-change-se-asia.pdf

Fransiskius, & Affabile, R. (2025). Peran Indonesia Sebagai Norm Entrepreneur Dalam Konsepsi Sentralitas ASEAN Melalui Inisiatif Karbon Lintas Batas Berbasis Teknologi Carbon, Capture and Storage (CCS), 7(01). 10.24198

Deep Tunnel Sewerage System. (2025, March 4). PUB, Singapore’s National Water Agency. Retrieved July 24, 2025, from https://www.pub.gov.sg/Professionals/Requirements/Used-Water/DTSS

Building Resilience of Health Systems in Asian Least Developed Countries to Climate Change. (n.d.). UNDP Climate Change Adaptation. Retrieved July 24, 2025, from https://www.adaptation-undp.org/projects/building-resilience-health-systems-asian-least-developed-countries-climate-change

Andrew Potter, P. C. (2011). Developing a supply chain performance tool for SMEs in Thailand. An International Journal, 20-31.

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