Indonesia is one of the many non-member economies with which the OECD has working relationships in addition to its 34 member countries. The OECD Council at Ministerial level adopted a resolution on 16 May 2007 to strengthen the co-operation with Indonesia, as well as with Brazil, China, India and South Africa, through a programme of enhanced engagement. While enhanced engagement is distinct from accession to the OECD, it has the potential in the future to lead to membership.
Indonesia is a lead economy in Southeast Asia, one of the most dynamic areas of the global economy. In co-operation with ASEAN and the Asian Development Bank, Indonesia hosted the first OECD-Southeast Asia Regional Forum. The purpose of the Forum was to raise awareness in the region of OECD’s work and its working methods. The Forum provided an opportunity to share policy experiences in the region and to learn from the experiences of OECD countries facing similar economic challenges.
Minister Muhamad Chatib Basri, Minister of Finance of Indonesia, speaks at the 2014 Ministerial Council meeting in Paris.
How is the co-operation co-ordinated?
The OECD’s Global Relations Secretariat develops and oversees the strategic orientation of this relationship and ensures that the dialogue remains focused, forward-looking and mutually beneficial. Usually, meetings are held between Indonesian officials and experts from OECD countries and the OECD Secretariat, on topics mutually agreed on and jointly prepared with analytical studies.
Indonesia’s participation in OECD general activities
Indonesia has participated in OECD meetings at Ministerial level. It also participates in some Committees and working groups.
The OECD’s relationship with Indonesia has grown significantly since 2007, reflecting its economic dynamism and increasing importance in the world economy. Like all the Key Partners, Indonesia has been integrated into the OECD’s regular work programme and covered in OECD flagship publications and statistical databases. The number of its Associate status and Partnersips in OECD bodies has increased slighly to seven, while it has become increasingly more involved in the Organisation’s work. Country specific reviews for education, innovation and investment and a 4th Economic Survey are planned in 2014-2015.
In September 2013, Secretray-General Angel Gurría and Minister of Finance Dr Muhamad Chatib Basri signed a Privileges and Immunities Agreement in the margins of the St Petersburg G20 Leaders' Summit, which will enable the OECD to open the Indonesia Contact Point Office in Jakarta. This office will allow the OECD to work closely with Indonesia authorities on the implementation of the Framework of Co-operation Agreement.
In addition to Committee co-operation, Indonesia and the OECD has reached a number of Agreements to strengthen the collaborating on wide range areas, including tax, macroeconomic policy, education, agriculture, financial education and financial affairs. Some highlights include:
- In November 2013, the Directorate General of Taxes of the Ministry of Finance of the Republic of Indonesia and the Centre for Tax Policy and Administration signed a Memorandum of Understanding on taxation. The Memorandum covers: tax treaties; transfer pricing; auditing of multinationals and small and medium enterprises; exchange of information; tax crimes and other crimes; taxation and mobility of high net worth individuals; immovable property taxation; tax incentives; taxation of SMEs and the informal sector; and micro-simulation modeling of tax revenues.
- In September 2012, the Government of Indonesia and the OECD signed the Framework of Co-operation Agreement. The Framework covers overall co-operation and signals an important political engagement. The Framework covers, amongst other areas, i) Policy dialogue at the OECD on emerging global issues; ii) Regular monitoring. Evaluation and benchmarking to promote reforms as well as government transparency for citizens; and iii) - Improvement of public policy and services benefitting the business community and citizens by promoting good governance.