The Center for World Trade Studies (CWTS) UGM and the Faculty of Social and Political Sciences (FISIPOL) UGM held an Interactive Talk Show with the theme "Empowering Circular Economy through Industry and Community Engagement" on Thursday (8/12). The Talk Show took place at the West Atrium of FISIPOL UGM and was attended by four speakers: Prof. Dr. Edia Rahayuningsih (Head of Indonesia Natural Dye Institute/INDI UGM), Sri Wahyaningsih, BSc (Founder of Sanggar Anak Alam), Ir. Setyo Hastuti, M.P (Secretary of the Department of Cooperatives and SMEs of Yogyakarta), and Boy Chandra (Chairman of Guwosari Training Center). The Talk Show is part of the Circular Economy Forum (CEF) within the UGM International Forum for Inclusive and Sustainable Development in Southeast Asia, Latin America, and the Caribbean Region.

Moderated by Josh Handani, Chairman of the Indonesian Circular Economy Consortium (KESI), the Talk Show began with a presentation by Prof. Dr. Edia Rahayuningsih regarding the role of INDI UGM in reviving the use of natural dyes as a manifestation of local wisdom and cultural heritage. As a country rich in resources, Indonesia is encouraged to have a spirit of production based on the principles of the circular economy. Prof. Edia emphasized that natural dyes are not just products but a movement that requires synergy and collaboration from various stakeholders.

From the government perspective, Ir. Setyo Hastuti, M.P. emphasized the importance of the penta helix collaboration between the government, businesses, media, communities, and society in developing environmentally sustainable SMEs. To promote the development of SMEs in the Special Region of Yogyakarta, the management reform of SMEs is emphasized to include formalization and digital transformation.

The presentation was continued by Sri Wahyaningsih, BSc, who explained the education system of Sanggar Anak Alam from kindergarten to high school. By providing freedom for students to explore areas of interest, Sanggar Anak Alam emphasizes a practice-based and research-based curriculum to foster entrepreneurial skills and awareness of environmental sustainability.

The Talk Show concluded with Boy Chandra from the Guwosari Training Center (GSTC) presentation on the crucial role of waste pickers as environmental observers and the application of zero waste management in establishing GSTC. GSTC focuses on household waste management training with the principle that the waste that comes in must go out as an end product. In 2020, GSTC implemented principles aligned with the circular economy by developing waste-to-block technology.

Center for World Trade Studies (CWTS) UGM and the Faculty of Social and Political Sciences (FISIPOL) UGM held an Interactive Talk Show with the theme "Connecting Schools with the Adoption of Circular Economy" on Wednesday (7/12). The Talk Show took place at the West Atrium of FISIPOL UGM and was attended by four speakers: Julie B. Appelqvist (Head of Environmental Sector Cooperation, Embassy of Denmark in Indonesia), Drs. Muthoin, M.Si (Head of Agency for Regional Development of Salatiga), Dr. Nurhadi, S.Sos, M.Si. (Lecturer at the Department of Social Development and Welfare, FISIPOL UGM), and Dr. Junita Widiati Arfani (Coordinator of IGPA). The Talk Show is part of the Circular Economy Forum (CEF) within the UGM International Forum for Inclusive and Sustainable Development in Southeast Asia, Latin America, and the Caribbean Region.

Moderated by Suci Lestari Yuana, MA, lecturer at the Department of International Relations, FISIPOL UGM, the Talk Show began with a presentation by Julie B. Appelqvist on the development of the circular economy in Copenhagen, Denmark. Julie shared several strategies for promoting the circular economy at the primary education level, such as giving students the title of "waste heroes," initiating the concept of waste-free schools and modifying the curriculum to focus on practical application. Implementing the circular economy in the education environment will also be supported by policies and collaboration from local governments.

Representing the Deputy Mayor of Salatiga, Drs. Muthoin, M. Si, the Head of the Agency for Regional Development of Salatiga, discussed Salatiga's efforts to address the impacts of the pandemic through community economic recovery and waste management. Several practices aligned with the circular economy can be found in farmers' utilization of food waste and washing water as liquid fertilizer for farmers in Salatiga. In addition, Salatiga plans to allocate local government budgets to support green schools and the establishment of waste banks in each neighborhood (RW).

From an academic perspective, Dr. Nurhadi, S.Sos, M.Si emphasized the important role of education in instilling a culture of the circular economy. Dr. Nurhadi highlighted three functions of universities in maximizing this role: the campaign function, the research and development function, and the advocacy function.

The Talk Show continued with a presentation by Dr. Junita regarding the objectives and activities of IGPA or the Indonesia Green Principal Award. As a program supporting elementary and secondary school principals, IGPA is designed to institutionalize the practices and principles of the circular economy among children from an early age. IGPA has been held since early 2022 with the collaboration among educational institutions, research bodies, and industries and has participated by 33 school principals in two training cycles.

The Talk Show concluded with the announcement of the release of a book written by participating school principals in IGPA titled "Rediscovering the Pearl of Sustainability" and the presentation of recognition certificates to several schools. The recognition certificates were divided into four categories. First, the Knowledge Co-Production category was awarded to Aisyiyah Unggulan Gemolong Elementary School and Muhammadiyah Ketanggungan Elementary School. Second, the Outreach Program category was awarded to Muhammadiyah Program Unggulan Khusus Kottabarat Surakarta Elementary School and Muhammadiyah 2 Alternatif Kota Magelang Elementary School. Third, the Curriculum Design/Adoption category was awarded to Muhammadiyah Sudagaran and MI Muhammadiyah Ajibarang. Fourth, the Partnership Building category was awarded to Muhammadiyah Plus Salatiga Elementary School.

Centre for World Trade Studies (CWTS) UGM and the Faculty of Social and Political Sciences (FISIPOL) UGM organized the Forum on Sustainable Development Policy, Circular Economy, and Industrial Transformation on Tuesday (6/12). As part of the UGM International Forum for Inclusive and Sustainable Development in Southeast Asia, Latin America, and the Caribbean Region, this forum aims to generate policy proposals on trade and industrial transformation based on the circular economy through multi-stakeholder dialogues. The forum participants at the UGM Central Building include WTO delegates, national and local governments, academicians, local communities, and businesses. 

The Policy Forum was opened by Dr. Wawan Mas'udi, Dean of FISIPOL UGM, and Dr. Riza Noer Arfani, Head of CWTS UGM. Dr. Wawan and Dr. Riza emphasized the importance of learning from the community as initiators of the circular economy in formulating policies. "There is no need for overly theoretical frameworks, but we can learn from grassroots initiatives," said Dr. Wawan. Together with Dr. Poppy Sulistyaning Winanti, Vice Dean for Academic and Student Affairs at FISIPOL UGM, Dr. Riza facilitated the first session of discussions, featuring presentations from Dr. Werner Zdouc (Director of the Knowledge and Information Management, Academic Outreach and WTO Chairs Programme Division of the WTO), H.E. Dandy Iswara (Deputy Permanent Representative of the Republic of Indonesia II in Geneva/Ambassador), Dr. M. Pramono Hadi, M.Sc. (Head of the Center for Environmental Studies at UGM), and Prof. Dr. Catur Sugiyanto, MA (Head of the Center for Economic Democracy Studies at UGM).

In his speech, Dr. Werner Zdouc underlined the importance of the circular economy in replacing the traditional economy that exploits resources and harms the environment. In the context of circular economy development in ASEAN, Latin America, and the Caribbean (SEA-LAC) countries, Dr. Werner mentioned the urgency of addressing several issues, such as the definition and classification of end-of-life products, conformity assessment procedures, licensing, trade-related issues, and capacity building related to trade. It is also essential for SEA-LAC governments to not only promote a circular economy among business stakeholders but also raise consumer awareness and engage civil society in sustainable consumption practices.

Continuing from Dr. Werner, H.E. Dandy Iswara highlighted Indonesia's interest in cooperating to implement COP26 and the Paris Agreement amidst significant population growth. Indonesia has several targets, including implementing the circular economy to reduce emissions and sustainable fisheries targets. H.E. Dandy also emphasized the need for national and international collaboration to achieve effective and equitable implementation of the circular economy for each country.

Representing the academic community, Dr. M. Pramono Hadi, M.Sc., highlighted the potential realization of the circular economy through increased forest role in carbon sequestration. Dr. Pramono identified five key sectors that need attention in low-carbon development planning: forestry, agriculture, energy and transportation, industry, and waste and garbage. Besides forests, the circular economy can also be applied in developing dairy farming businesses. Prof. Catur Sugiyanto, MA, stressed that institutional improvement, technology, and support are pivotal in developing micro, small, and medium-sized enterprises (MSMEs) that contribute to the circular economy.

The event continued with a policy formulation session, where representatives from regional authorities, communities, and companies exchanged ideas and shared their sector-specific policies and practices. Various interesting issues emerged, such as priorities between mindset change and profit-based approaches, characteristics and availability of space in each region, recycling monitoring and evaluation issues, challenges in committing to circular economy initiatives, and concrete strategies that can be implemented through cross-sector synergies.

The Policy Forum concluded with a presentation by Prof. Daniel C. Esty from Yale University. After appreciating the outcomes of the G20 Indonesia and placing hope in Indonesia's leadership in ASEAN in 2023 in his remarks, Prof. Daniel emphasized three crucial elements in implementing the circular economy in Indonesia. First, there is a need to improve and strengthen policy frameworks at the global, national, and sub-national levels. Second, there is a need for a shift in business norms, mindset, and facilitation in financial and trade aspects directed toward climate action. Lastly, a social movement from all segments of society and the government is necessary to drive the transition from a linear to a circular economy.

In the end, the Policy Forum agreed to accommodate the formulation of circular economy regulations that address various aspirations. Some of the conclusions reached include (1) the establishment of regulations that are not merely top-down and minimally supervised but accompanied by multi-sector alternatives; (2) increased research on intangible aspects such as lifestyle patterns; (3) the creation of a flowchart of circular economy solutions that maximize the elements of customs, religion, education, culture, law, and local economy. The agreement is expected to be material for the CWTS UGM policy roadshow in early 2023, initially focused on the KARTAMANTUL region (Yogyakarta City, Sleman Regency, and Bantul Regency).

Trade wars, naval skirmishes, and escalating rhetoric have been at the heart of China-U.S. relations for over a decade. As is well documented, China’s rise following the turn of the 21st century has made waves throughout the international political economy, raising questions about the compatibility of the competing economic strategies of the two great powers. Where the United States has remained adamant in its espousal of a liberal international order, China prefers the approach of State Capitalism which underpins its Belt and Road investment initiative. 

Concurrent with the conflict between China and the U.S. is the rising economic power of the BRICS nations, including Brazil and India. As a result of this success, more and more countries are finding benefits in cooperation with BRICS rather than working exclusively within the United States’ existing economic framework. Accordingly, the number of countries seeking to join BRICS continues to grow, including Argentina, Indonesia, Saudi Arabia, and the United Arab Emirates. Working with BRICS may see a further boost in popularity as the group continues to investigate the creation of a new global currency, which would allow participating nations to trade independently of the USD.

Against this backdrop of tussling powers in the Indo-Pacific is Australia’s evolving approach to foreign policy and international trade. A Western nation, Australia is often portrayed as an outsider among its Asian neighbours and as a satellite state of the United States. There is truth to this. Historically, Australia has displayed discomfort regarding its place within the region and is the only nation to have supported the U.S. in all of its major military campaigns. However, where Australia has leant heavily on the U.S. for support in defence and politics, the same cannot be said for its trade relations. Instead, it has been heavily dependent on China to grow its economy in the 21st century, primarily by exporting its natural resources. 

Despite the importance of maintaining relationships with China and the U.S., there is growing recognition in Australia that reliance on two competing great powers can only continue for a while. Tensions between Australia and China have already bubbled over in the past, resulting in in diplomatic spats and trade sanctions against Australia. Further, as China and the U.S. continue to butt heads over freedom of navigation and Taiwan, Australia risks becoming stuck between its defensive interests (U.S.-aligned) and economic interests (China-aligned) in the event of escalation. Such an outcome would be catastrophic for Australia, which risks economic devastation should its relationship with its closest trading partner deteriorate before appropriate diversification can be achieved. 

As uncertainty plagues the future of the Indo-Pacific, Australia has realised that it must develop its own identity in international trade and foreign policy. This realisation is reflected in the pursuit of economic diversification by Australian businesses and policymakers. Australian policymakers have clearly taken note of the growing economic success of ASEAN member states, including Indonesia and Vietnam, with the region becoming a more significant priority for policymakers. Evidence of this pivot is growing. Most recently, Australia became a member of the Regional Comprehensive Economic Partnership Agreement (RCEP) alongside 14 of its Indo-Pacific contemporaries, with Australia’s Department of Foreign Affairs and Trade (DFAT) citing the agreement as pivotal for facilitating access to “the fast-growing and dynamic Indo-Pacific region.” Additionally, IA-CEPA, a comprehensive bilateral free trade agreement between Australia and Indonesia, came into effect in 2020. The intention is clear – Australia recognises the importance of Indonesia and wants to build a closer economic relationship. 

Outside of diversifying trading partners, these agreements also pave the way for economic cooperation outside the mining exports for which Australia is so well known. Following the implementation of IA-CEPA, Australian companies have already begun exporting their services to Indonesia in education and healthcare. Such an example is Aspen Medical, an Australian healthcare company that has since agreed to a $US1 billion deal with West Java for the build of over 600 healthcare clinics. Australian companies are also diversifying the location of their manufacturing away from China, as part of a global trend, with many choosing Vietnam as their new country of operations. Australia’s clothing company Cotton On and its foremost natural health company, Blackmores, are leading examples of this transition in effect.

However, despite a growing recognition in Canberra of the opportunity, there remains work ahead to ready Australian companies and investors for doing business with new trading partners in ASEAN. As a result, expect to see a greater focus from the Australian government in facilitating access to new ASEAN markets for Australian companies and exports. The growing economic relationship between Australia and ASEAN members offers hope for the Indo-Pacific through increased cooperation and integration, which could ultimately culminate in greater prosperity and understanding for all. 

Mahasaraswati University Denpasar (UNMAS) Business Incubator (INBIS), Indonesian Young Entrepreneurs Association for Higher Education (HIPMI PT) UNMAS, and the Center for World Trade Studies at Gadjah Mada University (CWTS UGM) held the Sarasehan* Indonesian Economic Democracy (SARDEIN) on Friday (14/4). This SARDEIN session was held at Mahasaraswati University in Denpasar, Bali, with the theme "Projecting the Importance of Local MSMEs in National Economic Equality."

The event was opened with the welcoming dance "Sekar Jagat," followed by remarks from UNMAS and CWTS UGM representatives. Opening remarks by Vice Chancellor III UNMAS, I Komang Budiarta, S.Pd., M.Pd., M.Hum, expressed hope that the quality of MSMEs, especially in Denpasar, would improve as a result of the SARDEIN discussion. Dr. Riza Noer Arfani, Head of CWTS UGM, underlined the importance of collaboration between MSMEs, academics, and policymakers in encouraging the competitiveness of MSMEs in the international market. Representing the Suryakanta Institute, Maj. Gen. TNI (Purn.) IGK Manila, S.I.P. then welcomed the participants and assistants. Further, he motivated students to care more about the development of MSMEs.

Moderated by Putu Desi Anggerina Hikmaharyanti, M. Hum, the session continued with the Head of the Denpasar City Cooperatives and MSME Office, Dr. I Dewa Made Agung, SE., M.Sc  presenting examples of Denpasar City Government’s various MSME development practices. Some government efforts, including the creation of the KUBALI.com website to enhance MSME capital, an e-catalogue to increase MSME market access, a youth economic creativity festival “D'Youth Fest,” Denpasar Festival, and the MSME Actors Exhibition. Denpasar’s government also expects growth in cooperation for approaching MSME development problems, especially in promotion and marketing.

Head of the Buleleng Regency Tourism Village Network, Jero Mangku Made Ariawan, STT.PAR. MBA raised various circular economic activities in the Tourism Village of Buleleng Regency, Bali. Jero emphasized the importance of practical discussions and directions for farmers and MSME actors, who often do not specialize in a theoretical approach. By exploiting the potential of the location and culture, UMKM Tourism Villages in Buleleng Regency are advancing the arts, agriculture, and snack food sectors.

Continuing the discussion, the Head of INBIS UNMAS Denpasar, Daniel Manek, S.Fil., SM., MM, shared various experiences of MSME-themed competitions which students at UNMAS Denpasar attended to advance and develop student skills in the MSME field. Apart from the competition, Daniel also encourages skill development through collaboration like the one between UNMAS and CWTS UGM.

Furthermore, the Head of Section 1 of the Denpasar City HIPMI Branch Management Body (BPC), I Putu Hendra Arimbawa, SE., conveyed the great potential of Balinese MSME products and the relatively high potential of the MSME market in Indonesia. I Putu Hendra emphasized the importance of strengthening the MSME export-import sector to advance the Indonesian economy.

After the Question-and-Answer session, SARDEIN was closed by signing a Cooperation Agreement (PKS) between CWTS UGM and INBIS UNMAS on the local MSME empowerment program to create a sustainable, just, and resilient economy. This collaboration between CWTS UGM and universities in the n-helix scheme is oriented toward research, curriculum development, training, and policy advocacy.

* Sarasehan (in Bahasa) is a semi-formal discussion between experts and audiences on certain issues.

On Sunday (12/03), CWTS UGM collaborated with the Suryakanta Institute and Sumberharjo Green Tourism Exploration (JWHS) to deliver Volume 3 of the Sarasehan* Indonesian Economic Democracy (SARDEIN). This Sarasehan was held in Sumberharjo Village, Yogyakarta, with the theme "Vision of the Indonesian Circular Economy: Where is the Position of Villages and Local Communities?". Discussions were attended by local policy stakeholders of the Special Region of Yogyakarta (DIY), as well as practitioners and academics. Volume 3 of SARDEIN was also used to generate momentum for launching a book compiled by CWTS UGM and circular economic experts from various fields.

The SARDEIN workshop commenced with Klero Hamlet, Sriwidodo, welcoming the speakers and presenters to the Sumber Budhaya Building, which is said to hold historical significance for the people of Sumberharjo. Remarks were continued by the Head of CWTS UGM, Dr. Riza Noer Arfani, who identified the purpose of SARDEIN as a forum for discussion and knowledge dissemination, especially learning about circular economy practices at a local level context by involving various elements of society. During the event, Dr. Riza officially launched a book titled "Circular Economy in Universal Ideas and Local Practices" as CWTS UGM's contribution to developing a circular economy in 10 potential Indonesian sectors.

The Head of Sumberharjo Urban Village, Kurniawan Widiyanto, S.E, started discussions by highlighting that the village's 3R system (Reduce, Reuse, and Recycle) has not been maximally implemented. Kurniawan emphasized the importance of collaboration between the local government, university academics, the community, and local industry to campaign for circular economic practices at the sub-district and village levels, such as in Sumberharjo.

Director of the Independent Study and Administration Institute, Agus Hartono, S.S., discussed the problem of waste, which remains a long-term burden for Yogyakarta. Agus shared his belief that the government must maintain a firm approach toward managing waste with local communities and commercial industry. Agus further elaborated that companies should design products made from materials that are easy for consumers to process.

Ishadi Zayid, S.H., Head of the Sleman Regency Tourism Office, raised the environmental sustainability aspect of DIY’s provincial tourism sector as a topic for discussion. Ishadi expressed the commitment of the Sleman Tourism Office to developing community-based tourism that does not cause harm to the environment or conflict with the socio-cultural aspects of local communities. This commitment is manifested in the SAPTA PESONA campaign: Security, Orderly, Cleanliness, Coolness, Beauty, Friendliness, and Memories.

Representing the DIY Cooperatives and Small-Medium Enterprises (UKM) Office, the Head of the Cooperative and SME Entrepreneurship Services Division, Wisnu Harmawan, S.P., MT. said that 90% of DIY SMEs are still constrained in developing environmentally sustainable businesses due to a lack of financial support and guidance. Furthermore, based on European countries' rejection of DIY-based SME products, Wisnu conveyed the importance of pushing for environmental sustainability certification to expand these SME products into international markets.

SARDEIN Volume 3 was closed by Rizky Alif Alvian, MIR., CWTS UGM researcher and editor of the book "Circular Economy in Universal Ideas and Local Practices," which underlined the book's findings related to four circular economy trends visible in Indonesia. These trends include 1) circular economy practices driven from above (e.g., governments or international organizations); 2) practices driven from below (e.g., society and community); 3) potential production process improvement; 4) potential for policy making at the industrial level.

* Sarasehan (in Bahasa) is a semi-formal discussion between experts and audiences on certain issues. 

Center for World Trade Studies (CWTS) UGM, together with the Suryakanta Institute, and  Sociology Student Families (KMS), held Volume 2 of the Sarasehan* of Indonesian Economic Democracy (SARDEIN) on February, 28th 2023. This event, held in Fisipol UGM’s East Seminar room, carried the theme of “Improving Job Creation Regulations in National Investment Projections”. The discussion was attended by guest speakers Dr. Zainal Arifin Mochtar, Dr. Rangga Almahendra, and Ardy Syihab, with the discussion guided by Head of CWTS UGM, Dr. Riza Noer Arfani.

Dr. Zainal Arifin Mochtar, both a legal expert and lecturer at UGM’s Faculty of Law, said that there is currently a weakening of oversight towards the Indonesian government. Autocratic legalism was cited as an observable symptom of the lapse in political and legal oversight. In addition to Job Creation regulations, Dr. Zainal also conveyed the importance of monitoring the formulation of new regulations because there remains the potential for undesirable precedents, which would hinder the progress of Indonesia’s democratic legal and political systems. A key point of the presentation was that while increased levels of investment and economic progress are important for Indonesia, they should not be pursued in a way that prevents the advancement of  democracy.

Discussions continued with Dr. Rangga Almahendra, lecturer at UGM’s Faculty of Business and Economics, underlining the increasing prevalence of uncertainty caused by Jo Creation regulations. Continuing, Dr. Rangga explained that because Indonesia’s economic foundation is fragile and reliant on other countries, the government should focus on its improvement.  Because of the importance of  the Job Creation  regulations it is vital that they are reviewed to ensure an increase in employment opportunities, rather than serving only  the interests of employers.

The positions shared by Dr. Zainal and Dr. Rangga were endorsed by Ardy Syihab, who represented Merdeka Sejahtera Union (Semesta). Ardy made a point of rejecting a number of items from the Job Creation regulations that increase uncertainty for, or could potentially harm, Indonesia's workforce. Examples included regulations regarding layoffs, long leave, and the increasing openness of labor positions for foreign workers. In line with the preceding discussion, Ardy also emphasized the importance of questioning who will benefit from the accelerating levels of investment into Indonesia. In particular, Ardy highlighted that without appropriate regulation, the wealth created by this investment would likely not be enjoyed by society at large, instead leaving workers more disadvantaged.

* Sarasehan (in Bahasa) is a semi-formal type of discussion between experts and audiences upon certain issues. 

On January 11th, 2023, the Center for World Studies (CWTS) UGM held the first volume of its Sarasehan* of Democracy bringing “Cross Order Democracy Discourse” topic at Fisipol UGM’s BRI Works Amphitheater. The event featured several experts as guest speakers, including Major General TNI (Purn) IGK Manila, Head of PSPD UGM Dr. Riza Noer Arfani, and Bagas Damarjati, who represented the UGM students.

Discussions commenced with a presentation from Major General TNI (Purn) IGK Manila, who emphasized the important role played by academics and universities in shaping the ideal narrative of democracy. The Major General suggested that academia’s strength are well suited for provisioning advice to politicians, rather than engaging in the practical aspects of politics 

Dr. Riza Noer Arfani was the next to speak. During his presentation, Dr. Riza conveyed that because Indonesia’s democracy remains relatively new there are bound to be challenging periods. Therefore, Indonesia requires its academicians and universities to engage in the democratic process by shaping a vision of ideal democratic practices in Indonesia.

The discussion then progressed to the importance of Indonesia’s students in helping to construct democracy’s narrative in Indonesia. Bagas Damarjati stressed the importance of this to democracy, noting that more could be done to accommodate the aspirations of Indonesia’s students.

Following guest speakers, a question and answer session was held to generate further discussion. Guided by PSPD UGM Researcher Mario Aden Bayu Valendo, this session provided an opportunity for the audience to share their own ideas and ask questions of the guest speakers. While the event was held offline, it was also broadcast online via Instagram Live. To view the recording, please visit the Center for World Studies’ Instagram account @CTWSUGM.

* Sarasehan (in Bahasa) is a semi-formal type of discussion between experts and audiences upon certain issues. 

As the Chair of ASEAN in 2023, Indonesia adopts the theme of “ASEAN Matters: Epicentrum of Growth” in accordance with Indonesia’s G20 Presidency theme in the previous year, which focuses on the acceleration of  economic recovery and prosperity. This theme underlines the vision of Indonesia’s leadership to accelerate economic recovery, financial inclusivity, and sustainable development in Southeast Asia by strengthening the cooperation of all ASEAN member states.

Indonesia prioritizes three predominant issues upon the regional economy front, namely regional economic development, digital economy, and sustainable development. Instead of merely focusing on regional economic growth, Indonesia should seize its opportunity as a Chair to organize regional cooperation for sustainable development. This article will discuss the importance of the green economy, as a means of sustainable development, in ASEAN and recommend diplomatic actions for Indonesia, as the Chair of ASEAN, to spur the development this year. 

The Urgency of Accelerating Green Economy in ASEAN 

Regional cooperation of ASEAN member states is of utmost importance to tackle climate change issues that will negatively affect many crucial sectors in ASEAN. For instance, ASEAN will potentially lose up to 35% of its regional Gross Domestic Product (GDP) in 2050 caused by climate change. Furthermore, a report from the COP26 Universities Network and the British High Commission to Singapore entitled “Adaptation and Resilience in ASEAN: Managing Disaster Risks from Natural Hazards” reveals that the increasing intensity of rainfall will remarkably reduce regional agricultural productivity. Agriculture production, particularly rice, is predicted to dramatically drop by 50% because of floods, prolonged drought, and extreme weather events. Similarly, these issues will significantly affect the fisheries sector. 

Moreover, climate change will restrict the access to nutritious food in ASEAN. In 2020, 46% of ASEAN citizens were deprived of healthy and nutritious nourishment. The occurrence of a massive migration wave prompted by inadequate food supply, starvation, poverty, and human security due to climate change will arguably complicate regional integration and economic growth. 

Green economy is a system that does not merely see the importance of economic growth, but also environmental sustainability and inclusivity. In practice, this system can be implemented through production efficiency, carbon emission reduction, and pollution minimization. Looking at recent ASEAN conditions, the green economy system becomes necessary for both ASEAN member states’ governments and society.

ASEAN has formulated various regional frameworks related to the development of green economy in Southeast Asia. One of which is the Framework for Circular Economy for the ASEAN Economic Community (AEC) during the 20th AEC Council Meeting. This framework acts as a guideline for ASEAN to enhance regional economic development based upon the green economy. In addition, ASEAN has regularly released annual reports of climate change impacts towards the ASEAN region. 

Through the implementation of green economy, ASEAN will potentially have more than 30 millions of new job opportunities related to green businesses and industry in 2030. According to a report from Bain and Company, ASEAN will possibly profit around $1 billion dollars by establishing green economy. In addition to economic profit, ASEAN will reduce 80% of carbon emission caused by the decreasing consumption of fossil fuel for vehicles in some of the main cities in the region. Furthermore, ASEAN will also increase the efficiency and competition level of regional companies vis-a-vis competitors from outside the region.  

Indonesia’s Chairmanship and Green Economy in ASEAN

There are three diplomatic actions that can be exerted by Indonesia during its 2023 chairmanship to enhance ASEAN’S regional economic development through green economy. 

Firstly, Indonesia should further strengthen regional cooperation and exchanges of ideas and practices of green economy that have been implemented across ASEAN countries. For instance, Vietnam has formulated Environment Protection Laws 2020 to provide a legal foundation for domestic green economy encouragement. Arguably, this legal product can enlighten other ASEAN nations on the importance of providing legal foundation in accelerating the green economy.

Secondly, Indonesia should involve regional MSMEs in green economy implementation efforts through the existing ASEAN cooperation framework. This move is crucial since 90% of ASEAN’s business and industry are MSMEs. Support from ASEAN member states' governments is utterly important due to the vulnerability of MSMEs to numerous obstacles, such as the lack of human capital and funds to set up green and sustainable business models. Furthermore, member state governments should embrace domestic efforts and policies to stimulate the transition of MSMEs conventional business model into green business. 

Lastly, Indonesia should augment collaboration and cooperation with ASEAN external counterparts, such as the European Union, which has implemented green economy. Attracting more investments and regional cooperation in both fronts, policy making and technology, will enable the proliferation of the green economy in ASEAN faster. Arguably, Indonesia with its diplomatic roles in the region can lay the foundation of sustainable economic development to overcome investment and resources barriers, trade barriers that are based on advanced environmental standards, and regional policies that are not on the same level. 

As the Chair of ASEAN in 2023, Indonesia should bridge the interest of economic prosperity and environmental sustainability by implementing green economy. Various initiatives and diplomatic activities in advancing the green economy are not only crucial in enhancing ASEAN economic prosperity, but also in ensuring that the economic advancement will not exacerbate ASEAN’s environment conditions.

Currently, the implementation of circular economy has gained more attention in Indonesia.  In fact, Indonesia has incorporated the circular economy concept into the vision and development strategy of the five priority sectors in Indonesia's 2020-2024 National Medium-Term Development Plan (RPJM). The implementation of circular economy aims to balance economic benefits with environmental sustainability. 

In advancing the circular economy, Indonesia Circular Economy Consortium (KESI), affiliated with the UGM Center for World Trade Studies (CWTS) aims to boost circular economy-based SMEs, communities, and institutions based on local wisdom and knowledge. Currently, KESI has more than 20 members in Yogyakarta, Bali, and other regions in Indonesia, such as Rumijo Eco Indonesia, Sekolah Sampah Renggas Trengginas, and Sekolah Anak Sanggar Alam (SALAM). In  December 2022, KESI was also actively involved in organizing the Circular Economy Expo, which was attended by more than 50 participants from industry, community, and education sectors.

After developing and strengthening the consortium network, KESI held its routine meeting on 28 January 2023, at the PSPD UGM Office in which KESI Secretariat is also located. This meeting was KESI's initial milestone in reflecting on its commitment to realizing a sustainable, circular economy for its members. In this meeting, KESI members discussed the opportunities and challenges of implementing a circular economy in various sectors, particularly in SMEs and community sectors.

As a follow-up to this discussion in the next few months, KESI will soon organize skills, management, and marketing training classes for its members, and then it will be opened for the public. This program is expected to be a key solution to the problems of MSMEs that have limited access to upgrade their skills, management, and marketing proficiency. Furthermore, this training program aims to accommodate the vast range of participants, including training that is accessible to everyone, not just to KESI members. Thus, KESI will continue to be committed to implement circular economy practice based on collaboration and empowerment for all levels of society.