Business in Diplomacy: Shinta W. Kamdani

Business in Diplomacy is a Foreign Policy Talks series that puts the spotlight on the business leaders who sit at the intersection of commerce and statecraft. Through in-depth conversations, we explore how they read the geopolitical landscape, how they engage governments and international partners, and what they believe it takes for Indonesia to compete, connect, and grow in an uncertain global order.

This edition features Shinta W. Kamdani, Chairwomen of Indonesian Employers' Association (APINDO)

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Q&A

Q1:

In your view, what distinguishes economic diplomacy from commercial diplomacy in Indonesia’s context? How do you see your role, and perhaps the role of your chamber, in supporting Indonesia’s trajectory in advancing these efforts?

I often see my role as that of a “business diplomat”, translating Indonesia’s national ambitions into global business confidence to do business in Indonesia. In today’s era of geoeconomic fragmentation, supply chain reconfiguration, and intensifying competition for strategic industries, economic diplomacy and commercial diplomacy can no longer be viewed as entirely separate domains.

Traditionally, economic diplomacy refers to the strategic use of economic instruments to advance its national interests (be it political, strategic military/defense or economic interests), while commercial diplomacy focuses on leveraging trade, investment, market access, & international cooperation instruments for an enhanced competitiveness & growth of the country’s main economic actors: the business.

Yet Indonesia’s current trajectory reflects how deeply interconnected the two have become since we define our national interests at achieving the Indonesia Maju 2045. Our downstream industrialization agenda, green transition, digital economy expansion, and participation in regional trade architectures all depend on strong alignment between government policy priorities and private sector real capability to meet the expected growth paths.

As business chambers, APINDO understands very well that Indonesia’s growth aspirations (at 6% or more to be a developed nations by 2045) are well beyond our means and our capability to achieve if we only rely on our own means. Frankly, Indonesia’s economic growth potential is so immense that our domestic “capital” (in terms of financial capital, human capital, technology, infrastructure & others) is not enough to endow all of them. If we insist on relying on our own capital, we may be able to be a developed nation, but it will take far longer time to achieve and not by 2045. That’s why we need to invite and leverage foreign capital, and foreign economic participation to achieve our growth aspiration through economic & commercial diplomacy.

To do so, we need a sound economic diplomacy to create the necessary framework that may allow us (business) to tap into foreign capital & foreign economic participation to develop our economy. Indonesian business will then spearhead the commercial diplomacy by utilizing the framework created through economic diplomacy to form real business partnership, real productivity, real jobs & real economic growth in Indonesia. Thus, collaboration between government & business is a must, as we need to move together in representing Indonesia as an economy that are coherently attractive & competitive in front of international economic stakeholders, both in paper & in real business activities.

In many respects, this collaboration is also a form of economic statecraft: presenting Indonesia to the world not as a flawless economy, but as a dynamic, resilient, attractive, reasonably competitive and strategically important partner in tapping the immense opportunities presented by the complex structural transitions in the world. This is where APINDO plays a strategic role as a business diplomat. After all, successful economic & commercial diplomacy today ultimately revolves around trust-building, predictability, institutional credibility, and the openness for collaboration to build lasting economic interdependence in an increasingly uncertain global order.

Q2:

Looking back across different administrations, what has been your most memorable experience in supporting Indonesia’s economic or commercial diplomacy?

One of the most defining experiences for me was serving as Chair of the B20 during Indonesia’s G20 Presidency in 2022. The world at that time was navigating a fragile post-pandemic recovery, while simultaneously confronting geopolitical conflict, supply-chain fragmentation, inflationary pressures, and weakening multilateral coordination. Indonesia was challenged not only to maintaining dialogue across an increasingly polarized global landscape. We are also challenged to keep the momentum for post-pandemic global economic recovery. Through the B20, we brought together governments, industries, and international institutions to sustain global economic cooperation & at the same time promoting trust in Indonesia’s economic resilience when much of the world was drifting toward fragmentation and strategic decoupling.

However, I need to be honest that economic & commercial diplomacy is not made in big events that are news-worthy. Events like B20 is indeed important as diplomatic milestones, achievements or catalysts. But just like a marathon is defined by the continuous 42-kilometers running instead of the passing of finish line, successful economic diplomacy or commercial diplomacy are mostly made in meeting rooms that have no public audience, in simple exchanges among businesses & even over phone calls when your business counterpart shared their concern about Indonesian business climate.

These are times when our role in supporting Indonesia’s economic & commercial diplomacy is put to the test. If we cannot help explaining Indonesia’s policy directions, navigating Indonesia’s doing business, or having confidence in our economic stability, no partnership & no transactions will be made even though we spend so much effort hosting a world-class business summit like B20.

The substantial conclusion of the IEU-CEPA negotiations in Bali in 2025 further reinforced this proposition. The IEU CEPA was concluded after 19 rounds & 10 years of negotiation, although the negotiation is not supposed to be that long. The public may not realize it, but there are critical times when this negotiation was almost falling apart & on the verge of being abandoned by both Indonesia & EU side due to stubbornness against making flexibilities & negative public-political opinions on each other’s trade policies. We even witness an episode where Indonesia & EU are petitioning against each other in WTO, making everyone wonder if the 2 economies still wish to have the CEPA.

It is in these critical moments that APINDO as representative of business community intervene & mediate to ensure confidence of both economies over the CEPA formation is improved. We had dialogues with relevant stakeholders to assist in transforming the heated negative opinions into constructive dialogue for cooperation under the CEPA.

We were also having continuous discussions with the negotiators about how certain flexibilities & tradeoffs can be made and should be made by both economies to ensure the optimum benefits of the CEPA for businesses of both economies, though it may be less than the ideal concessions they envisioned. All these processes demonstrated the importance of an “Indonesia Incorporated” approach, where government-to-government diplomacy is built on & supported by private-sector collaboration to safeguard market confidence, restore strategic trade relations, securing growth potential and economic resilience.

Even when the CEPA itself has been concluded, we keep playing our role to smooth out all necessary process so we can “cash in” the benefits of the CEPA as soon as possible. In fact, in June 2026, APINDO business mission is scheduled to travel to the Netherlands, Belgium, and France to deepen policy engagement, support CEPA ratification, and enhanced business-to-business trade, investment, sustainability, and supply-chain partnerships across Europe.

Just to make it clear, this is NOT an effort that APINDO tirelessly made because of EU. We spare the same efforts—if not greater—for all other economic partners we deemed strategic to Indonesia’s economic growth. The efforts & approach we exercised when dealing with IEU CEPA negotiation is replicated & refined from our past efforts in supporting other key CEPA negotiations, such as Indonesia-Australia CEPA, Indonesia- EFTA CEPA, Indonesia-Chile CEPA, RCEP negotiations, etc.

Personally, I do not exercise the business diplomacy role only where Indonesian business’ economic interest is directly & immediately on the line, like CEPA or B20. When I assume the leadership role at regional & global institutions, such as the UN ESCAP on sustainability or the International Chambers of Commerce (ICC) when shaping the reform of WTO, I put my best efforts in bringing Indonesia & developing country’s economic interests to the forefront.

My team and I are also actively coordinating with our government about Indonesia’s strategic position on the issues at hand & consulting whether it will still be within Indonesia’s economic interests if certain regional or global positions are made. All in all, we tried to keep Indonesia’s economic interests & the spirit of Indonesia Incorporated however we can & in whatever avenue we have.

Q3:

Based on your experience in conducting ‘business diplomacy’ overseas, what are the prevailing perceptions of Indonesia among international stakeholders? Have these perceptions evolved in recent years?

Increasingly, international stakeholders see Indonesia as a form of “geoeconomic hinge state”, a country whose strategic relevance lies not only in the size of its market, but in its resources, potentials to connect supply chains, investment flows, industrial transformation, and maintain geopolitical stability across the Indo-Pacific.

The perception of Indonesia has evolved quite significantly over the past decade. Previously, Indonesia was often viewed through a relatively narrow lens: as a commodity- driven economy, a promising consumer market that are quite protectionists, and an important yet secondary ASEAN middle power. Today, the narrative is far more strategic.

Indonesia is increasingly perceived as a pivotal actor in the emerging Indo-Pacific geoeconomic architecture. Our growth trajectory that leverage the global EV supply chain, downstream industrialization strategy, digital economy expansion, and energy transition has elevated Indonesia’s relevance as a key global supply chain actor & growth engine in Southeast Asia.

International stakeholders now see Indonesia as an important node in critical supply-chain and a stabilizing force amid growing global fragmentation. There is also greater recognition of Indonesia’s strategic value as a country capable of maintaining engagement across different geopolitical poles. In an era shaped by strategic decoupling and competing spheres of influence, Indonesia’s “trademark” of pragmatic and independent engagement has become a source of credibility.

That said, global confidence is still accompanied by careful scrutiny. International investors and partners continue to pay close attention to regulatory consistency, legal predictability, logistics efficiency, human capital readiness, and industrial depth. In many conversations overseas, I often sense that Indonesia is no longer underestimated, but it is still being tested. To me, this is actually a healthy phase of transformation. The world increasingly sees Indonesia as a consequential economic and geopolitical partner in the evolving global order.

Q4:

In your opinion, what are Indonesia’s most critical assets and strategic resources in strengthening its foreign economic diplomacy?

Indonesia’s most important strategic asset in foreign economic diplomacy is clarity of purpose. Initiatives such as Indonesia Emas 2045 provide a long-term national economic vision that serves as the strategic anchor for our international engagements. Without a clear sense of where a nation intends to go, even the most active diplomacy risks becoming transactional rather than transformational.

Equally important is the coherence between our external economic messaging and our domestic policy realities. Effective foreign economic diplomacy ultimately rests on credibility. International partners and investors assess not only what a country says abroad, but whether its domestic policies, regulatory frameworks, and development priorities consistently reinforce those commitments. In that sense, policy coherence is a strategic asset in itself.

The assets most commonly associated with Indonesia, our critical minerals, biodiversity, energy resources, large domestic market, strategic geography, and demographic scale remain enormously important. However, these should be viewed as instruments that support broader national objectives rather than ends in themselves.

As we deepen engagement across ASEAN, the Indo-Pacific, BRICS, OECD accession, IEU-CEPA, and CPTPP-related initiatives, our comparative advantage lies in our ability to engage across multiple strategic platforms while maintaining a consistent development trajectory. Ultimately, the strength of Indonesia’s foreign economic diplomacy lies in aligning national ambition, domestic policy coherence, and strategic assets toward a common long-term vision.

Q5:

Which regions or markets do you believe Indonesia may have overemphasized, and which regions remain under-explored despite having strong relevance and potential for Indonesian businesses?

I do not see the issue as Indonesia overemphasizing certain regions and underemphasizing others. Our traditional partners, particularly China, the United States, Japan, India, Malaysia, Singapore and key ASEAN economies will remain indispensable anchors of Indonesia’s trade, investment, and technology ecosystem. The challenge lies more in expanding Indonesia’s market frontier strategy beyond its conventional economic orbit.

Based on export data processed from Indonesia’s Ministry of Trade throughout 2025, Indonesia’s export concentration toward non-traditional regions remains relatively limited. Africa accounted for only 3.15% of Indonesia’s exports, South America 1.31%, Central America 1.53%, and Central Asia merely 0.07%. These figures illustrate substantial untapped potential across emerging growth corridors that are becoming increasingly relevant in the evolving global economy.

The Gulf region is evolving into a strategic hub for sovereign investment, logistics, digital infrastructure, and green transition financing. Africa presents long-term opportunities driven by urbanization and demographic expansion, while Central Asia, Latin America, and the Pacific are gaining importance amid shifting connectivity and trade diversification patterns.

At the same time, foreign economic engagement should not be viewed solely through the lens of exports and investment flows. It should also serve as a vehicle for strengthening Indonesia’s domestic competitiveness. Strategic partnerships in areas such as education, healthcare, technology, finance, and innovation ecosystems are equally important, particularly in sectors where Indonesia still has significant room to enhance productivity and capabilities.

Going forward, economic diplomacy should increasingly focus on competitive advantage creation, facilitating knowledge transfer, talent development, technological upgrading, and deeper industrial collaboration. In the end, the most effective foreign economic partnerships are those that strengthen Indonesia’s competitiveness at home while enhancing its relevance abroad.

Q6:

What areas do you believe are most important to improve in order to strengthen Indonesia’s engagement with international business and economic partners?

The most important area to strengthen, in my view, is institutional trust. In an environment increasingly shaped by geopolitical uncertainty, supply-chain recalibration, and rapid technological change, businesses place a premium on transparency, regulatory credibility, and a predictable investment climate. Today, predictability itself has become a form of competitiveness.

Indonesia has made significant progress in improving its investment environment and economic competitiveness. However, international partners continue to closely assess regulatory coherence, legal certainty, institutional credibility, ease of doing business, competitive operating costs, and the consistency of policies across government institutions. These factors often carry as much weight as market size or resource endowments in long-term investment decisions.

Another critical area is human capital. Indonesia’s demographic advantage will only translate into economic advantage if supported by workforce readiness, technological capability, and industrial upgrading. As the global economy becomes increasingly driven by green industries, digital transformation, and advanced manufacturing, competitiveness depends as much on innovation and adaptability as it does on efficiency.

Equally important is maintaining a consistent openness to international collaboration and foreign participation. Economic engagement is strongest when government, businesses, and other stakeholders move in alignment through an “Indonesia Incorporated” approach, projecting a coherent and credible economic narrative to the world. Ultimately, foreign economic partnerships are built on confidence. Confidence grows from transparency, consistency, and institutions that are trusted to deliver over the long term.

Q7:

What are the most effective instruments or platforms available today for Indonesian businesses to better leverage Indonesia’s foreign economic engagements?

The most effective instruments remain Comprehensive Economic Partnership Agreements (CEPAs) and Free Trade Agreements (FTAs). Their value extends beyond tariff reductions, they provide legally binding frameworks that create certainty, predictability, and confidence for businesses and investors. In an increasingly uncertain global economy, such certainty has become a strategic asset.

Agreements such as RCEP, ASEAN frameworks, and the recently concluded IEU-CEPA help establish clear rules of engagement and long-term market access. More importantly, they often serve as catalysts for broader economic activity. Trade missions, investment partnerships, business forums, and private-sector collaboration frequently gain momentum once these frameworks are in place. ASEAN itself is a strong example, where decades of economic integration have helped make the region Indonesia’s largest trading partner as a bloc.

Equally important is the international alignment of regulations, standards, and governance practices. Efforts such as Indonesia’s OECD accession process can strengthen institutional credibility, enhance regulatory quality, and reinforce investor confidence. In many respects, these initiatives function as important instruments of trust-building in international economic engagement.

Business councils, trade missions, and platforms such as the B20 also play an important role in advancing track-two diplomacy, connecting policymakers, businesses, and strategic stakeholders beyond formal negotiations. Digital platforms will become increasingly important as well, particularly for SMEs seeking access to global markets.

However, maximizing this opportunity requires continued efforts to narrow Indonesia’s digital infrastructure and capability gaps, ensuring that digital transformation translates into broader economic participation.

Q8:

Foreign Policy Talks has long advocated the idea that “foreign policy begins at home, and must also return home,” emphasizing the importance of strong domestic foundations to ensure international engagements deliver tangible benefits to society. What are your thoughts on this perspective?

I strongly agree with that perspective. At its core, foreign policy should be a pragmatic extension of national interests. International engagement should begin with a clear understanding of what a country seeks to achieve domestically, whether in terms of economic growth, competitiveness, job creation, technological advancement, or societal welfare, and contribute meaningfully toward those objectives.

This principle is deeply consistent with the spirit of our constitutional doctrine of Bebas dan Aktif. The purpose of foreign policy is not simply to maximize diplomatic engagements, but to preserve the strategic space necessary to advance, secure, and protect national interests in an increasingly complex global environment.

This is especially relevant in the context of economic diplomacy. Trade agreements, investment partnerships, and international cooperation frameworks should ultimately contribute to economic growth, job creation, industrial upgrading, technology transfer, MSME empowerment, and broader prosperity at home. Without strong domestic foundations and policy coherence, even the most ambitious international strategy will struggle to generate sustainable impact.

In many ways, competitiveness itself has become a strategic foreign policy objective. Countries with strong institutions, skilled human capital, regulatory credibility, and productive economies are better positioned to navigate geopolitical uncertainty and attract long-term partnerships. This is why domestic reform and international engagement should never be treated as separate agendas. They reinforce one another. Effective diplomacy abroad requires credibility at home, while successful domestic transformation increasingly depends on constructive global engagement.

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