Salvo 06.06.2024 10 minutes

Jakarta’s Bid

President Biden Meets With Indonesian President Widodo At White House

Admitting Indonesia to the OECD would be a disaster for the West.

By the end of this decade, Indonesia will have the fifth largest economy in the world, ahead of Germany; after another decade, it will surpass Japan. Only the economies of India, China, and the U.S. will be bigger, according to the latest estimates from the International Monetary Fund. This growing economic clout will bring growing demands from Jakarta (soon to be Nusantara) for inclusion in the world’s ruling councils.  

But while Indonesia has every right to a greater say in global forums like the United Nations or the World Trade Organization, Western countries are not obliged to make room for it in their own groupings. The most important of these is the policy coordination body for the West, the Organization for Economic Co-operation and Development (OECD), which opened formal membership talks with Indonesia last month. Those talks should be scrapped. 

The OECD was formed by the U.S. and European nations in 1961 to carry on the work of post-war European reconstruction. With the exceptions of Japan and Turkey, which were part of that reconstruction, all the founding members were Western countries.  

Today, the group cites “individual liberty [and] the values of democracy, the rule of law and the defense of human rights” as core principles. South Korea, Israel, and several Latin American counties like Mexico and Chile have since joined, but they are committed to the Western values that underpin the organization. “Like-mindedness” is a formal criterion for membership because mutual learning, consensus, and socialization are the key mechanisms through which the OECD operates. Anti-Western countries like Indonesia should not be welcome. 

While best known for its top-notch work on economic policy and standards, the OECD’s integrity is a result of its Western values and membership. It takes a hard-headed look at every policy area and is unaffected by backroom politics. There is no China to derail reports and no Russia to provide fake statistics. It does not soft-peddle policy failures in member states, and its analysts are hired for their excellence alone. There is no politicking over a “diverse” leadership. One never hears of OECD bureaucrats at the headquarters in Paris sipping Château Pétrus during extended lunches on expense accounts. 

It’s no wonder that large developing countries like Indonesia want in. OECD membership is a Good Housekeeping stamp of approval that unlocks investment, finance, and trade opportunities. But it also brings responsibilities that non-Western countries find hard to bear. 

A 2014 study found that transferring OECD policies to non-Western countries was difficult because of the lack of a “common value system.” China did not like the idea of giving up state control of the financial system; Brazil was not interested in a more efficient tax system.  

Indonesia, too, would struggle to meet OECD membership standards, of which there are 270. It rattled global commodity markets with an ill-thought out ban on raw nickel exports in 2020 that has been declared illegal by the WTO and counter-productive by the OECD. Since the membership process was announced on May 10, Indonesian officials have bristled at the idea of having to conform to OECD standards when those standards contravene the country’s many nationalist and protectionist policies.  

The problem is not that Indonesia is a developing country with typical developing country challenges like corruption, weak public finances, and over-regulation. The fundamental problem is that Indonesia is a non-Western country whose foreign economic policy is strongly oriented towards challenging the economic role of the West.  

Indonesia has always been at the forefront of the so-called “non-aligned movement” in global politics. It slipstreams with Beijing on matters like state control of the economy, and uses resource nationalism and the promise of “moderate Islam” to gain leverage over the West. It was a founding member of the anti-Western “Group of 77” and aligns itself with that group’s agenda. This includes rejecting the OECD’s leading role on global tax reform, demanding more multilateral lending to developing countries with no strings attached, and forcing the West to decarbonize alone.  

In effect, Jakarta talks out of both sides of its mouth. It attends anti-Western pow-wows like the Group of 77 summit in Havana last year and then demands entry into Western clubs. Since the OECD has never expelled a member and all major OECD decisions require unanimity, Indonesia’s accession would be a mortal threat to the organization. 

OECD leaders like the former secretary general from Mexico and the current one from Australia have argued that bringing in the likes of Indonesia (and Brazil) would make the body “more relevant.” The OECD, they say, is “too Western.” Indonesia’s ambassador to Japan told Nikkei in February that his country would become “a voice of the Global South” in the OECD. 

But the fact that dozens of non-Western countries like Indonesia are lining up to join shows the body remains highly relevant because of its integrity and high standards. Calling it “too Western” or “Eurocentric,” meanwhile, is like calling the African Development Bank too African. The OECD was established and exists to uphold a distinctive development model associated with the free societies of the West. Globalists who insist on throwing the doors open to all and sundry fundamentally misunderstand why the OECD matters. It is not just Davos with good statistics. 

Indonesia has been a “partner” country of the OECD since 2007, and it participates in many OECD committees and protocols. This helps both sides and should be continued, just as the U.S. military conducts training exercises with non-treaty allies. But partnership is not a stepping-stone to membership; it signals a different relationship altogether.  

It is essential that the “Global North” retain its sense of self and continue to prioritize transparency, individual freedom, and the human rights norms that define the West. Admitting a country like Indonesia—where Islamic Sharia law is the standard in certain domains, including the criminal code in one province—would mean the degradation of one of the only international organizations that actually works. 

The American Mind presents a range of perspectives. Views are writers’ own and do not necessarily represent those of The Claremont Institute.

The American Mind is a publication of the Claremont Institute, a non-profit 501(c)(3) organization, dedicated to restoring the principles of the American Founding to their rightful, preeminent authority in our national life. Interested in supporting our work? Gifts to the Claremont Institute are tax-deductible.

Suggested reading

to the newsletter