Economic and Socio-Cultural Relations Between Indonesia and Taiwan: an Indonesian Perspective, 1990-2012

國立中山大學中國與亞太區域研究所

碩士論文

Institute of China and Asia-Pacific Studies

National Sun Yat-sen University

Master Thesis

印尼與台灣的經濟及社會文化關係(1990-2012):印尼的觀點 Economic and Socio-Cultural Relations between Indonesia and Taiwan: An Indonesian Perspective, 1990-2012

研究生：陸碧宜 Luh Nyoman Ratih Wagiswari Kabinawa 指導教授﹕顧長永教授 Prof. Samuel C. Y. Ku

中華民國 102 年 6 月 June 2013

摘摘摘要摘要要要

本文欲分析印尼雖然與台灣沒有政治外交關係，卻能發展其在台灣的經濟和社會文化關係的原因。印尼與台灣之間的經貿統計顯示，在 2010 年台灣是印尼的第八大外來投資以及第 11 大貿易夥伴；在社會文化關係方面的數據更證明在台灣有廣大的印尼移工與印尼學生人口。因此，印尼與台灣呈現經貿與社會文化互賴的情況。儘管缺乏政治外交關係，為什麼印尼能持續維持與台灣的經貿以及社會文化關係呢？為解答此問題，本文將採印尼觀點為途徑，其著重於印尼人民對其與台灣的關係的視角。分析方法則援引國際關係建構主義中的人民間互動的概念為本，著重觀察共同觀念和文化價值如何形塑制度，因為制度最終會構築政府的利益。本文證明印尼在沒有對台外交關係的情況下能持續維持與台灣的經貿和社會文化關係的原因，在於印尼人民是觀念的倡導者，主導著與台灣之間的互動。人民與制度兩者對印尼與台灣來說，是深入強化相互關係的經貿與社會文化功能角色。

關關關鍵關鍵鍵鍵字字字字：：：：印尼商人，印尼移工，印尼學生，經貿與社會文化關係，人民主導

ABSTRACT

The main intention of this thesis is to analyses the underlying reason that caused Indonesia is able to nurture its economic and socio-cultural relations with Taiwan, even though under the absence of political diplomatic relations. Statistics on economics between Indonesia and Taiwan shows that in 2010, Taiwan is the eighth-investor and the eleventh- trading partner for Indonesia. Furthermore, statistics on socio-cultural relations proves that there are massive population of Indonesian migrant workers and Indonesian students in Taiwan. Thus, Indonesia and Taiwan are in the conditions of economic and socio-cultural interdependence. Despite lacking political diplomatic relations, why could Indonesia maintain durable economic and socio-cultural relations with Taiwan?” In order to answer that question, this paper will employ the Indonesian perspective approach that stressed on the Indonesian people point of views toward its relations with Taiwan. The main tool of analysis is based on the people-to-people interactions concept which is drawn from the constructivist approach on International Relations. It focuses on how share ideas and cultural-values contribute to the making up of institutions which in the end constitute the interests of the state. This thesis has proved the proposed hypothesis that due to the Indonesian people as the promoter of ideas lead the interactions with Taiwan, Indonesia is able to maintain its durable economic and socio-cultural relations with Taiwan despite under the absence of diplomatic relations. People and Institutions serve as independent economic and socio-cultural agent both for Indonesia and Taiwan to further strengthen their ties.

Key Words: Indonesian businessmen, Indonesian migrant workers, Indonesian students, economic and socio-cultural relations, people leading

TABLE OF CONTENT

ABSTRACT ……………………………………………………………………………………………………… i

LIST OF TABLES ……………………………………………………………………………………………………… . vi

LIST OF CHARTS ……………………………………………………………………………………………………… viii

ABBREVIATIONS ……………………………………………………………………………………………………… ix

Chapter I: Introduction ……………………………………………………………………………………………… .. 1

1. Background of Information ……………………………………………………………… 2

2. Research Motives …………………………………………………………………………… . 3

3. Research Purposes …………………………………………………………………………… 4 4. Research Approach ………………………………………………………………………… . 4 5. Research Methods …………………………………………………………………………… 5 6. Literature Review …………………………………………………………………………… . 6

6.1. Taiwan Perspective …………………………………………………………………………. 7

(1) Primacy of Taiwan ’s Economic

Diplomacy and Interests …………………………………………………… . 7

(2) Shifting International Order ……………………………………………… .. 10

(3) Development of Cross-Strait Relations ……………………………… . 11

(4) People-to-People Approach ……………………………………………… .. 13

6.2. Indonesian Perspective ………………………………………………………………… .. 14

(1) Policy of Separation of Politics and Economics ………………… . 14

(2) PRC ’s Factors within Indonesia and Taiwan Relations ……… 16

7. Analytical Framework …………………………………………………………………… 21 (1) Theoretical Framework ………………………………………………… .... 21 (2) Proposed Framework ………………………………………………………… . 26 I.8. Thesis Arrangement ……………………………………………………………………… . 29

Chapter II: Economic Relations between Indonesia and Taiwan ……………………………… ... 31

1. Economic Relations before 1990s ……………………………………… ...... 31

2. Economic Relations after 1990s ………………………………………… ...... 35

iii

Chapter III: Socio-Cultural Relations between Indonesia and Taiwan ………………………… .. 51

1. Migrant Workers in Taiwan ………………………………………………………… .. 51

2. Indonesian Migrant Workers in Taiwan ………………………………………… 54

3. Foreign Students in Taiwan …………………………………………………………… 60

4. Indonesian Students in Taiwan ……………………………………………………… . 62

5. Socio and Cultural Exchanges between Indonesia and Taiwan ……… . 66

Chapter IV: People ’s Ideas, Institutions and Interests within

Indonesia and Taiwan Relations ………………………………………………………………… 76

1. Framework of Ideas ……………………………………………………………………… . 76

(1) Environmental Framework ……………………………………………… .. 77

(2) Economic Framework ……… .. ……………………………………………… 83

(3) Cultural Framework ………………………………………………………… .. 87

2. Creation of Institutions and Norms ………………………………………………… 91

(1) Asosiasi Pengusaha Toko Indonesia di Taiwan (APIT) ……… 92

(2) Ikatan Citra Alumni Taiwan seIndonesian (ICATI) …………… . 94

(3) Ikatan Pekerja Indonesia Taiwan (IPIT) …………………………… .. 97

(4) Perhimpunan Pelajar Indonesia di Taiwan (PPI Taiwan) …… . 98

3. Economic and Socio-Cultural Interests

Between Indonesia and Taiwan …………………………………………………… 101

(1) Economic Interests …………………………………………………………… 102

(2) Socio-Cultural Interests …………………………………………………… . 105

Chapter V: Conclusion ……………………………………………………………………………………………… 110

1. Conclusion ………………………………………………………………………………… .. 110

2. Theoretical Implications …………………………………………………………… .. 113

3. Implications for Indonesia and Taiwan ……………………………………… .. 114

Bibliography ………………………………………………………………………………………………………………… .. 115

Appendix A: Field Research Activities March-May 2013 ……………………………………………… . 121

Appendix B: Memorandum of Understanding between the Indonesian Economic and Trade Office in Taipei and the Taipei Economic and Trade Office, Indonesia on Cooperation in the Field of Higher Education ……………………………………………………………………………………………… . 122

Appendix C: Memorandum of Understanding between the Indonesian Economic and Trade Office in Taipei and the Taipei Economic and Trade Office, Indonesia on the Recruitment, Placement and Protection of Indonesian Overseas Workers ………………………………………………………………………………………………………………………… . 125

LIST OF TABLES

Table 1-1 Statistics on Economics and Socio Cultural Relations

Between Indonesia and Taiwan 2010-2012 ……………………………… 2

Table 1-2 Summary of Literature Review ……………………………………….. 19-20

Table 2-1 Taiwanese Investment in Indonesia from 1952-1989 …………………. 32-33

Table 2-2 Timeline of Economic Activity between

Indonesia and Taiwan before the 1990s ……………………………………35

Table 2-3 Values and Products of Taiwan Export to Indonesia 1990-2012 ………. 36-37

Table 2-4 Values and Products of Taiwan Import

From Indonesia 1990-2012 ………………………………………. ……. 38-39

Table 2-5 Export and Import Activity between Indonesia and Taiwan

Based on Values per-Year 1990-2012 …………………………………. 40-41

Table 2-6 Taiwanese Investment in Indonesia Based on Cases and Values

From 1990-2012 ………………………………………………………… 43

Table 2-7 Taiwanese Investment in Indonesia Based on Area of Investment,

Cases, and Amounts 1952-2012 ……………………………………… . 46-47

Table 2-8 Timeline of Political Economy Activities Between

Indonesia and Taiwan, 1990-2012 …………………………………….. 49-50

Table 3-1 Statistics on the Total Number of Indonesian Migrant Workers

In Taiwan 1993-2012 ………………………………………………….. . 55

Table 3-2 Statistics on Total Number of Indonesian Migrant Workers

Based on Field of Industry per January 2013 ………………………… 57-58

Table 3-3 Statistics on Top Five Countries of Foreign Students

In Taiwan School Year 2012/2013 ……………………………………… 61

Table 3-4 Statistics on Indonesian Students in Taiwan

School Year 1986-2012 …………………………………………………. 63

Table 3-5 Scholarship Scheme for Indonesian Students in Taiwan ………………. 70-71

Table 4-1 Summary of Environmental Framework ……………………..………….. .83

Table 4-2 Summary of Economic Framework ………………………………………. 87

Table 4-3 Summary of Cultural Framework ……………………….………………... 90

Table 4-4 Semi-Officials Economic Exchanges between Indonesia and Taiwan,

1990-2012 ………………………………………………………………...102

Table 4-5 Officials Economic Exchanges between Indonesia and Taiwan,

1990-2012……………………………………………………………...... 104

Table 4-6 Semi-Officials Socio-Cultural Exchanges between Indonesia and Taiwan,

1990-2012 ………………………………………………………………...106

Table 4-7 Officials Socio-Cultural Exchanges between Indonesia and Taiwan,

1990-2012 ………………………………………………………………...107

vii

LIST OF CHARTS

Chart 2-1 The Percentage of Taiwan’s Export Product to Indonesia

Based on Products and Values Ranking 1990-2012 …………………….. 38

Chart 2-2 The Percentage of Taiwan’s Import Product from Indonesia

Based on Products and Values Ranking 1990-2012 …………………….. 40

Chart 3-1 Migrant Workers in Taiwan by January 2013 …………………………… 53

viii

ABBREVIATIONS

APIT : Asosiasi Pengusaha Toko Indonesia di Taiwan

ASEAN : Association of Southeast Asia Nations

CCC : Chinese Chamber of Commerce

CIER-TASC : Chung-Hua Institution of Economic Research-Taiwan ASEAN Research

Center

CLA : Council of Labor Affairs

DIKTI : Pendidikan Tinggi

ESIT : Elite Study in Taiwan

FORMMIT : Forum Mahasiswa Muslim Indonesia Taiwan

HIV/AIDS : Human Immunodeficiency Virus/Acquired Immunodeficiency Syndrome

ICATI : Ikatan Citra Alumni Taiwan seIndonesia

ICC : Indonesian Chamber of Commerce

ICDF : International Cooperation Development Fund

IDR : Indonesian Drawing Rate

IETO : Indonesian Economic and Trade Office

INGO : International Non-Governmental Organizations

IPIT : Ikatan Pekerja Indonesia Taiwan

ITS : Institut Teknologi Sepuluh November

Jababeka : Jakarta Bandung Bekasi Kerawang

LIPI : Lembaga Ilmu Pengetahuan Indonesia

MOE : Ministry of Education

MOEA : Ministry of Economic Affairs

MONE : Ministry of National Education

MOU : Memorandum of Understanding

NCKU : National Cheng-Kung University

NCTU : National Chiao-Tung University

NGO : Non-Governmental Organizations

NTD : New Taiwan Dollar

NTUST : National Taiwan University of Science and Technology

OCS : Overseas Chinese Student

OISAA : Overseas Indonesian Student Association Alliance

PCC : Pou Chen Company

PERMIRA : Perhimpunan Mahasiswa Indonesia di Rusia

PERPITA : Persatuan Pelajar Indonesia di Taiwan

PPI France : Persatuan Pelajar Indonesia di Prancis

PPI Taiwan : Persatuan Pelajar Indonesia di Taiwan

PRC : People’s Republic of China

P2P : Pusat Penelitian Politik

ROC : Republic of China

SEZs : Special Economic Zones

TEC : Taiwan Education Center

TETO : Taipei Economic and Trade Office

TIWA : Taiwan International Workers Association

USD : US Dollar

Chapter I

Introduction

1. Background of Information

Indonesia and Taiwan are two entities that do not have official diplomatic relations but maintain durable economic and socio-culture relations. Historically speaking, even though Indonesia adhere one-China policy principle, this country continue to nurture its relations with Taiwan in terms of economics and socio-culture. The formal peak of relations between them occurred in 1989 when Taipei was allowed to rename its Chamber of

Commerce in Jakarta into Taipei Economic and Trade Office which gave politically meaningful status to Taiwan. Indonesia-Taiwan harmonious relations did not stop there; in

1994 Taiwan launched a program called “Southward Policy” which aims to increase its investment and political relations with countries in Southeast Asia including Indonesia.

Economic ties between Indonesia and Taiwan found within the investment and trade activities while socio-cultural ties lied within the existence of Indonesian migrant workers and Indonesian students in Taiwan.

Statistics on economic and socio-cultural relations between Indonesia and Taiwan showed improvement after the year of 1990s. In terms of economic investment, Taiwan was the eighth-largest foreign direct investor for Indonesia in 2010. 1 In terms of trading activity,

Indonesia was Taiwan’s eleventh-trading partner in 2010, being the thirteenth-largest export market and eleventh-largest supplier or imports. 2 On the context of socio-cultural relations,

Indonesian migrant worker is the first biggest population of foreign workers in Taiwan. In addition, Indonesian student is the third largest population of foreign students from Southeast

1 Center for Political Studies (P2P) LIPI, Policy Paper: the Dynamics and Current Status of Indonesia-Taiwan Relations, Jakarta: Center for Political Studies (P2P) LIPI, 2011, p. 6 and “Kondisi Hubungan Bilateral antara Taiwan dan Indonesia, < http://www.roc-taiwan.org/ID/ct.asp?xItem=144651&CtNode=9323&mp=292&xp1= > accessed on December 27 th , 2012 2 Ibid.

Asia after Malaysia and Vietnam. Detail statistics of economic and socio-cultural relations from the latest three years show below:

Table 1-1 Statistics on Economic and Socio-Cultural Relations between Indonesia and Taiwan 2010-2012 Year Investment Export (US$ Import (US$ Indonesian Indonesian (US$ 1000) 1000) 1000) Migrant Workers Students (person) (person) 2010 389 4.509.630 6.020.156 156.332 2,274 2011 1.145 4.836.625 7.428.224 175.409 2,472 2012 17.200 5.190.198 7.324.792 191.127 2,723 Source: Investment figure accessed from Statistics on Approved Outward Investment by Area and Industry ; Export and Import figure accessed from Taiwan Export-Import to Asia, ; Indonesian Migrant Workers figure accessed from Foreign Workers in Productive Industries and Social Welfare by Nationality and Sex < http://statdb.cla.gov.tw/html/mon/c12050.pdf >; Indonesian Students figure accessed from

The table clearly shows that each year statistics on economic and socio-cultural

relations experience some improvements. However, the durable economic and socio-culture

relations between Indonesia and Taiwan do not necessarily give positive impact toward their

political-diplomatic relations. Indonesia since its independence in 1945 never recognized

Taiwan as an independent state. Indonesia recognized the People’s Republic of China

(hereafter PRC) as the sole legitimate representative of Chinese government in 1950. Even

after Indonesia suspended its diplomatic relations with PRC in 1967, Indonesia has never

recognized Taiwan.

Furthermore, Indonesia is one of the countries in Southeast Asia that strongly supported the principle of One-China Policy and signed strategic partnership relations with

PRC in 2005. Thus, politically speaking, Indonesia does not have any incentive to improve its relations with Taiwan. Economically speaking, however, Indonesia and Taiwan are able to maintain strong economic and socio-cultural relations. Hence, this thesis will explain the

2 reason why Indonesia and Taiwan are able to develop economic and socio-culture cooperation even though there is no diplomatic relations between them.

State-centric approach argued, state is the main actor within international relations.

Thus international politics is driven by state-to-state interactions under the leverage of

diplomatic relations. A state that does not have political diplomatic relations with another

state would be difficult to engage in formal governmental relations among each other.

Nevertheless in the case of Indonesia and Taiwan, both nations are able to develop their

economic and socio-culture relations even though official diplomatic ties are missing. Thus,

this thesis tries to answer the question: “Despite lacking political diplomatic relations, why

did Indonesia maintain durable economic and socio-cultural relations with Taiwan?” This

thesis employs Indonesian perspective approach to examine Indonesia-Taiwan relations. In

addition, this thesis will also examine case studies of economic and socio-culture issues.

Economic issues involve the aspect of investment, and trade while socio-culture issues

include the aspect of migrant workers and Indonesian students.

2. Research Motives

Research on Taiwan and Indonesia relations mainly focused from Taiwan’s

perspectives toward its relations with Indonesia, such as Taiwan’s economic diplomacy and

interests, the development of cross-strait relations, and the shifting international order.

Furthermore, there is only limited number of discourse that focus on Indonesian perspective

toward its relations with Taiwan that eventually creates a gap on the existing research on

Indonesia and Taiwan relations. Therefore, to fill that gap, this thesis will explain and

analyze the phenomena of economic and socio-cultural relation between Indonesia and

Taiwan from the Indonesian perspective. Thus, at the end could fulfill the main purpose of

this thesis.

3. Research Purposes

The main purpose of this thesis is to analyze and to explain the underlying reason that

caused Indonesia is able to nurture its economic and socio-cultural relations with Taiwan

even though under the absence of political diplomatic relations.

4. Research Approach

The thesis will employ Indonesian perspective approach toward its economic and

socio-cultural relations with Taiwan. The use of Indonesian perspective means the thesis will

explain the relations between Indonesia and Taiwan from the Indonesian point of view

particularly from people-to-people interactions that exist within the economic and socio-

cultural ties. The main reasons to employ Indonesian perspective approach due to limited

number of research publications that analyzes and explain the issues of economic and socio-

cultural ties from Indonesian perspective. Therefore, the literature review findings are more

likely based on Taiwan’s perspective toward its relations with Indonesia.

Literature review from Taiwan perspective has argued that Taiwan is able to maintain

economic relations with Indonesia due to Taiwan’s economic diplomacy and interests

(Leifer;2001, Ku;1995, Leong;1995, Lee;1990, Klintworth;1995, Rich:2009), the shift on

international order (Ku;1998), the development of cross-strait relations (Chen;1996,

Lin;2010), and the factors of people-to-people particularly Taiwan businessmen (Chen;2002).

On the other hand, literature review from Indonesian perspective has argued that due to the

policy of separation of politics and economics (Ku;1998), and the PRC’s factor on Indonesia

and Taiwan relations (Ku;2002, Irawan;2006) Indonesia is able to maintain its economic

relations with Taiwan.

Based on the above mentioned literature review, research on Indonesian perspective

still far behind from Taiwan’s perspective research. Therefore, this thesis will enrich and

4 contribute to the research on Taiwan and Indonesia relations from Indonesia’s point of view.

In addition, Indonesian perspective will be viewed from the perspective of people-to-people interactions which has not been addressed yet by the existing publications. People-to-people interactions in term of Indonesian businessmen, Indonesian migrant workers and Indonesian students are intense within the close-ties of economic and socio-cultural relations between

Indonesia and Taiwan. Therefore, there is a necessity to address them as the main analysis on this thesis, thus, at the end will offer new findings within the existing research.

5. Research Methods

In order to analyze and to explain the reasons why Indonesia maintain its economic and socio cultural relations with Taiwan, this thesis will apply two different research methods: document analysis and in-depth interview.

The first method that will be applied is document analysis method. Documents

analysis means that this thesis will use several documents to analyze Taiwan-Indonesia

relations. Document analysis includes analysis on government reports, memorandums of

understanding between Taiwan and Indonesia, statistical economic and socio-cultural data,

and newspapers. These documents will be useful to get more information about Indonesia-

Taiwan relations both in the past or present conditions.

The main reasons to use document analysis because it helps to get accurate information from government reports or statistical data that support the explanation on the topic of the thesis. Moreover, the use of governmental reports are rarely use by other scholars in examining Taiwan-Indonesia relations since the problem of language barrier that existed between Indonesian or Taiwanese scholars. In addition, document analysis method will also help to understand the interests that lied on the Indonesian side while conducting cooperation with Taiwan.

The second method that will be employed is in-depth interview which means conducting interview with actors that helped to improve Taiwan and Indonesia relations. The actors are divided into three main categories. First, the head of Indonesian Employers

Associations Store in Taiwan or Asosiasi Pengusaha Toko Indonesia di Taiwan (hereafter

APIT) and representative of Indonesian Federation of Taiwan Alumni Associations or Ikatan

Citra Alumni Taiwan Seindonesia (hereafter ICATI). Second is the representative of

Indonesian migrant workers in Taiwan, represented by the head of Indonesian Migrant

Workers Association in Taiwan or Ikatan Pekerja Indonesia Taiwan (hereafter IPIT). The last is representative of Indonesian students in Taiwan, represented by the head of Indonesian

Student Association in Taiwan or Perhimpunan Pelajar Indonesia di Taiwan (hereafter PPI

Taiwan). In addition, the interview will also include some of Indonesian governmental representatives in order to know their perceptions toward Indonesia-Taiwan relations.

This thesis using in-depth interview methods because it needs to get an assessment over Indonesian perspective, particularly people who are directly interact with the conditions in Taiwan such Indonesian migrant workers, Indonesian students, Indonesian businessmen and Indonesian representative governments in Taipei. Furthermore, interview will also help to prove the hypothesis that addressed in this thesis. Finally, in dept interview method is chosen because the existence research mostly relied only on content analysis method without observing on the people who participate actively on supporting cooperation between

Indonesia and Taiwan.

6. Literature Review

Two major perspectives exist among scholars in the discussion of Taiwan-Indonesia relations: the Taiwan perspective and the Indonesian perspective.

Scholars from Taiwan perspective explain Indonesia-Taiwan relations from Taiwan’s point of view which includes the aspects of Taiwan’s economic diplomacy and interests, the shifting on international order, the development of cross-strait relations, and the influence of people-to-people interactions. Their argumentations not only limited to the case of Indonesia-

Taiwan relations, but also consist of broader cases of relations between Taiwan and Southeast

Asia countries.

On the opposite side, scholars from the Indonesian’s perspective contend the idea that

Indonesia keeps nurtured its harmonious relations with Taiwan due to the consideration of policy separation of economics and politics and the PRC’s factor within Taiwan and

Indonesia relations. Both perspectives define their ideas with strong finding arguments which enrich the discourse on Taiwan-Indonesia relations.

6.1. Taiwan Perspectives

Scholars holding Taiwan perspectives were split into four main arguments, the primacy of Taiwan’s economic diplomacy and interests, the shifting international order, the development of cross-strait relations, and the influence of people-to-people interactions.

(1) Primacy of Taiwan’s Economic Diplomacy and Interests

The first argument is the primacy of Taiwan’s economic diplomacy and interests.

Scholars on this view stated that due to the development of Taiwan’s economic growth and its interests to gain economic and political benefits, Taiwan has been able to promote its foreign relations with countries that have no diplomatic relations such as Indonesia. In order to support Taiwan’s economic expansion to Indonesia and other Southeast Asia countries, the government of Taiwan initiated a policy called “Southward Policy”. Ku point out that

Taiwan’s Southward policy was mainly aim to expand Taiwan’s economic interests in the

Southeast Asia region while also tried to strengthen Taiwan’s political status with ASEAN

7 countries including Indonesia 3. Even though there is no diplomatic relations among them,

Taiwan’s economic growth and huge investment attracted countries in Southeast Asia to

cooperate with Taiwan in terms of economic issues.

Similarly with Ku, Leifer also marked the importance of Taiwan’s economic power that made Taiwan’s relations with countries in Southeast Asia possible. He noted that

Taiwan’s engagement with Southeast Asia was mainly driven by economic interests through trade and investment ties in terms of market, land, and cheap labor 4. Moreover, Taiwan also expanded its relations through raised up academic and cultural exchanges and agricultural aids 5. These efforts were successfully proved by the improvement of political ties such the possibility of issuing visa by Taiwan’s representative offices and granting diplomatic immunity toward Taiwan’s official representative though not in the manner of formal diplomatic relations.

In addition, Leong use the term economic diplomacy to describe the pragmatic approach conducted by the Taiwanese government that combined the trade and investment for the pursuit of foreign policy relations with Southeast Asia countries 6. Leong shared

similar ideas with Ku that he analyzes the exercise of Taiwan’s economic strength toward the

implementation of Taiwan’s Southward Policy. Furthermore, Lee also argue that economic

diplomacy has been Taiwan main interest when dealing with Southeast Asia countries,

though the main agenda behind the economic diplomacy is to enable Taiwan to rejoin

3 Samuel C.Y. Ku, “The Political Economy of Taiwan’s Relations with Southeast Asia: The “Southward Policy,” Contemporary Southeast Asia , Vol. 7, No.3, December 1995, p. 283 4 Michael Leifer, Taiwan and South-East Asia: The Limits to Pragmatic Diplomacy,” The China Quarterly , Vol. 165, March 2001, p. 177 5 Ibid., p. 178 6 Ho Khai Leong, “New Directions in Taiwan-Southeast Asia Relations: Economics, Politics and Security,” Pacific Focus , Vol. X, No. 1, Spring 1995, p. 84

8 international community and organizations 7 . These attempts were conducted to break

Beijing’s block of Taiwan international political status.

From the same perspective, Klintworth also use Taiwan’s economic strength as an

indicator to explain Taiwan relations with the country in the Asia-Pacific region. He argued

that Taiwan’s looking Southward Policy had two main intentions, to make Taipei more

politically influence in the Southeast Asia region, and to get an access of natural resources

and cheap labor which owned by mostly Southeast Asia countries, such Malaysia, Vietnam,

and Indonesia 8. Cheap labor and abundant natural resources are also the main reasons for

Taiwan to invest in the Southeast Asia region. Taiwan’s economic activities are complement to the countries in the Southeast Asia, thus allowing the economic cooperation among them goes smoothly.

Another argument stemmed from Rich’s article which analyzes the possibility of

Taiwan to survive in the international arena while the country enjoys only limited numbers of diplomatic relations. He asserted that the conventional idea of recognition which consists of internal and external sovereignty has been diminished due to the emergence of ROC’s economic capability hand to hand solved the problem of lacking diplomatic relations 9 .

Though Rich do not cover the issue of Taiwan’s relations with Southeast Asia or Indonesia in his article, his idea remain important that support the primacy of economic power and interests over state to state relations.

Based on the above mentioned arguments, scholars within this spectrum of approach relies their analysis based on the liberal political-economy approach. They both believe that economic strength and diplomacy can help generate the political relations. Economic issues

7 Kuo-hsiung Lee, “The Republic of China and Southeast Asia: More Than Economy,” in Yu San Wang, ed., Foreign Policy of the Republic of China on Taiwan: An Unorthodox Approach (New York: Praeger, 1990), p. 78 8 Gary Klintworth, New Taiwan, New China: Taiwan’s Changing Role in the Asia-Pacific Region (New York: St. Martin’s Press, 1995), p. 148 9 Timothy S. Rich, “Status for Sale: Taiwan and the Competition for Diplomatic Recognition,” Issues and Studies , Vol. 45, No.4, December 2009, pp. 161-162

9 become important within state to state relations and overlap the role of political issues. This approach could predict that in the future, economic cooperation will have spill-over effects to other areas of cooperation such socio-cultural. The main strength of this approach is clearly pointed out Taiwan’s main economic and political interests in strengthening its relations with countries in Southeast Asia. Though, they are also has weaknesses that do not explain how economic interest can give spill-over effects to the political relations between Indonesian and

Taiwan.

(2) Shifting International Order

The second group of scholars from Taiwan’s perspective argues that due to the

shifting international order, Taiwan has able to maintain its foreign relations with countries in

the Southeast Asia region. After the cold war ended, international order filled not only by

hard politics issues such as military confrontation and diplomatic struggle but also by low

politics issues like economic and socio-cultural. In addition, non-state actors also emerged

that created multiple of contact among actors in the international order. The basic theoretical

framework about the shifting international order derived from Keohane and Nye model of

“complex interdependence”. They argued that complex interdependence includes three

characteristics: multiple channels of contact, an absence of hierarchy among issues, and the

minor role of military force 10 . These characteristics endorsed the changing of international

order after the cold war and influenced the pattern of state to state relations.

Scholars in this camp argued that the conditions of complex interdependence allows

states to interact with others through the development of multiple channels of contact that

stressed the importance of non-state actors, and the absence of hierarchy among issues which

means state to state relation no longer governed by political-security minded approach

(economics and other issues matter). Ku employed the complex interdependence model to

10 Robert O. Keohane and Joseph S. Nye, Jr., “Power and Interdependence” in Samuel C.Y. Ku, Taiwan’s Diplomatic Maneuvers in the Asia-Pacific: A Perspective of Complex Interdependence”, Issues and Studies , Vol. 34, No. 6, June 1998, p. 82

10 analyze Taiwan’s foreign relations survival in the Asia-Pacific region despite under the shadow of PRC’s threat. He argued that Taiwan’s foreign relations are in harmony with the development of complex interdependence in the Asia-Pacific region, thus creating the endurance for Taiwan’s diplomatic maneuver in the region despite a lack of formal diplomatic relations 11 . Nevertheless, Ku noted that the last characteristic of complex interdependence which is the minor role of military force is not suitable to the development in the Asia-Pacific region, though the other two are compatible 12 .

Furthermore, Ku mentioned three strategies that Taiwan pursued under the complex

interdependence situations, engage actively on the area of issue economic-oriented,

strengthen unofficial diplomatic relations, and fully participated on the multilateral track

relations such INGOs 13 . Those strategies are compatible with the development of complex

interdependence in the Asia-Pacific region that enabled Taiwan to maneuver its diplomatic

activities. Even though PRC has been spread its strong influence on the region, there were

still rooms left for Taiwan to involve actively in the international arena.

Scholar on this spectrum employs liberal-interdependence approach that focused the

analysis on the interdependence world order that stemmed after the end of cold war. On the

concept of interdependence world order, non-state actors such international non-

governmental organizations can help state interact with others though lack of official

diplomatic relations. These non-state actors create multiple linkages that enable state to

maneuver within the international order. Moreover, within the conditions of complex

interdependence (particularly after cold war) state to state relations no longer governed by

solely military and political security issues. Economic and other issues also matter that

provide a room for politically-isolated country like Taiwan to maneuver. Though this

11 Samuel C.Y. Ku, Taiwan’s Diplomatic Maneuvers in the Asia-Pacific: A Perspective of Complex Interdependence”, Issues and Studies , Vol. 34, No. 6, June 1998, p. 83 12 Ibid. 13 Ibid.

11 approach has weakness that failed to explain how the third characteristics of complex interdependence matter on Taiwan diplomatic maneuver.

(3) Development of Cross-Strait Relations

Scholars holding this view contend that the development of cross-strait relations influence Taiwan’s decision to expand its foreign relations into the Southeast Asia region.

Chen compared Taiwan’s investments in Mainland China and Southeast Asia, and then argued that Taiwan’s go south investment mainly influenced by the risky factors of investing in the Mainland 14 . Taiwan’s investment in the Mainland could be threatened at anytime due to the international political status of Taiwan, domestic political instability in China, and to avoid Taiwan’s economic dependent on China 15 . The unresolved status of cross-strait relations is one of the main reasons for Taiwan to enlarge its business and investment into

Southeast Asia countries. The Taiwanese government finds an alternative to cope with the economic problem of Taiwan Strait through improving economic relations with neighboring countries in Southeast Asia.

Similarly, Lin also provided strong arguments to explain Taiwan’s decision on going southward policy. He asserted that there were several potential obstacles that could endanger

Taiwan’s investment in Mainland China such PRC’s unstable domestic political conditions, changeable policy, and hostile and unfriendly attitudes toward Taiwanese investments 16 .

Those conditions influence the Taiwanese government to spread out their investment and business network into Southeast Asia region including Indonesia. Both Chen and Lee concerned about the negative impacts of Taiwan’s economic dependence and highest fever of investments toward the Mainland. Hence scholars from this perspective concluded that due to the unstable cross-strait relations, Taiwan move forward to the Southward Policy which

14 Xiangmiang Chen, “Taiwan Investments in China and Southeast Asia: “Go West, but Also Go South”, Asian Survey , Vol. 35, No.5, May 1996, pp. 458-459 15 Ibid. 16 Chun Hung Lin, “Critical Assessment of Taiwan’s Trade and Investment Relationship with ASEAN Countries in the Past, Present and Future”, Miskolc Journal of International Law , Vol. 7, No.1, 2010, p. 77

12 enables Taiwan to protect its economic interest while also increase its political relations with neighbor countries in the region.

Scholars on this approach more likely classified as realist looking, because they

stressed the importance of great power, which on this context China that endorsed Taiwan to

diversified it economic expansion. Realist approach is pessimistic about the possibility of

cooperation among state actors, however, they believe that state cooperate with others if only

the pursuit of national interests or the existence of hegemony actor. The existence of

hegemony actor could be perceived as a threat or balancer on the system, thus state can either

balancing or bandwagoning. 17 On the case of Taiwan, China perceived as a threat for

Taiwan’s economic, thus Taiwan tried to balance it by diversifying its economic activities

into Southeast Asia countries. Scholars on this approach lack of explanations about China’s

response toward Taiwan expanding economic in Southeast Asia.

(4) People-to-People Approach

In this approach, scholars argued that Taiwan has been able to maintain its relations

with countries in Southeast Asia due to the role of Taiwanese businessmen and entrepreneurs

that invested their capitals in the region, thus creating economic and political linkages

between Taiwan and those neighboring countries. Chen examined that there were

approximately 30,000 Taiwanese businessmen invested their capitals in Indonesia.18 They

brought their family and settled down in Indonesia that eventually influence the relations

between the Taiwanese and the Indonesian government in terms of issue of permanent

17 For the clear explanations about balancing and bandwagoning please refer to the Walt’s article, Stephen M. Walt, “Testing Theories of Alliance Formation: The Case of Southwest Asia” International Organization , Vol. 42, No. 2 (Spring, 1988). p. 278 18 Chen Jie, “Human Dimensions of Taiwan – Southeast Asia Economic Interdependence: A Preliminary Observation” in Samuel C.Y. Ku, ed., Southeast Asia in the New Century: An Asian Perspective (Kaohsiung: Center for Southeast Asian Studies, National Sun Yat-sen University, 2002), p. 89-90

13 resident status, and to set up so called “Taipei Schools” to provide education for those children of the Taiwanese businessmen.19

These Taiwanese businessmen and entrepreneurs invested their capital and worked together with the local Indonesian or Chinese descent entrepreneurs that build the economic linkages among them. Their interaction were massive that eventually encourage the government on both sides to cooperate each other such set up the regulations for investment and on how the recipient government maintain the dynamic of domestic political conditions that can create a favorable environment for the investments.

Chen analyzes the case of Taiwan relations with Southeast Asia countries from the constructivist approach that focus on the role of people-to-people interactions. People on the context of Taiwanese business people influenced state to state relations because their movement of capitals and family to their host countries. Their presence on the host country influences the state relations in terms of issuing visa and providing better living. On this case,

Taiwan works as economic and security provider for its citizen that are investing overseas. In order to fulfill the needs of its citizen, Taiwan interact with those host countries. This approach clearly pointed out the role of people to promote state to state relations. Though, it also lack of evaluations about the strength of people in order to improve state to state relations. It did give Taiwan’s bargaining power but the measurement of the power that

Taiwan earned has not been addressed yet.

6.2. Indonesian Perspectives

Scholars holding to the Indonesian perspective claimed that there were two main arguments that could explain Indonesia and Taiwan strong economic relations: policy of separation of politics and economics, and

(1) Policy Separation of Politics and Economics

19 Ibid

Scholars from this camp asserted that Southeast Asia countries implemented the

policy separation of politics and economics when dealing with the issue related to Taiwan.

This argument derived from the fact that Southeast Asia nations maintain unofficial economic

relations with Taiwan while remain adhere “one China policy” regarding to the PRC and

Taiwan political status. The policy separations between economics and politics make

Southeast Asia countries’ relations with Taiwan visible. Ku strengthen this argument on his

article that analyzed the case studies of PRC missile test in the Taiwan Strait during the

period 1995-1996. He argued that Southeast Asia countries continue to promote neutral

positions during the period of missile test due to the implementation of separation of politics

and economics policy.20

The policy separation of politics and economics conceive the idea that politics and economics could be managed independently and not always overlapping each other. In this context, Southeast Asia nations recognize the political dispute between PRC and Taiwan, thus in order to gain win-win solution from the cross-strait relations, they continue to recognize one China policy while acknowledging Taiwan as a strong economic entity in the region by conducting an unofficial economic cooperation. The realization of this policy could give benefits for Southeast Asia countries where they enjoy economic benefits both from

China and Taiwan but at the same time would not trigger any hostility against the two

Chinese regimes regarding issues of cross-strait relations. 21 Hence, most countries in

Southeast Asia conducted this policy to avoid any possibility of high conflict escalation in the

region that could also threaten their economic and political interests.

Scholars on this spectrum classified within the realism approach that differentiates

between economics and politics issue. As for the proponents of liberalist approach, they

argued that economic issues can overlap the political issue. However, it is conversely for the

20 Samuel C. Y. Ku, “Southeast Asia and Cross-strait Relations: The Policy of Separation of Politics and Economics”, Journal of Contemporary China , Vol.7, No.19, 1998, p. 421. 21 Ibid., p. 437

15 proponents of realism, they claim that politics should be differentiates from economics thus create a hierarchy among issues. The strength of this approach is provide different insight toward Southeast Asia, China and Taiwan relations that explain how state maximize its economic interest while keep avoiding political disputes between two political entities.

However, it also has drawback that made an argument generalizations toward the whole

Southeast Asia countries, whereas each country has different policy characteristics.

(2) PRC’s Factors within Indonesia and Taiwan Relations

The emergence of China also influenced the discourse on Taiwan-Indonesia relations from the Indonesian perspective. Scholars from this camp examined the triangular relations of Indonesia, China and Taiwan using political economy indicators to outline pattern of interaction among them. Debate about Indonesia, China, and Taiwan relations would always cover the historical period from the year 1950s until the year of 1990s which marked by the changing of dynamic relations among three entities. As noted by Ku, during the early period of 1950s, Indonesia relations with China and Taiwan was motivated by the political issues, but the pattern of interactions were shifted from politics into economically driven interests in the early 1980s.22

Relations between Indonesia, China and Taiwan from the 1950s until 1980s were

marked by the diplomatic struggle imposed by Taiwan and Mainland China. Indonesia

recognized the PRC in the 1950s and adhere one-China policy as the main principle of

foreign relations with the two Chinese regimes. However, Indonesia-China relations were

ended in the 1967 followed by the communist coup that occurred in 1965. Indonesia accused

Beijing as the main proponents of the coup that eventually led Indonesia to suspend its

diplomatic relations with Beijing for 23 years since 1967. Though Indonesia suspended its

diplomatic relations with China, it did not necessarily recognize Taiwan as the representative

22 Samuel C.Y. Ku, “Indonesia’s Relations with China and Taiwan: From Politics to Economics”, Asian Perspective , Vol. 26, No.4, 2002, p. 227

16 of Chinese government. The formal relations with Taiwan occurred in 1971 when the

Taiwanese government was allowed to set up the Chinese Chamber of Commerce in Jakarta.

These politically motivated relations began to change during the period of 1980s

which marked by several important events among Indonesia and China. First, China’s open

policy that began in 1978 focused on the economic development with the neighboring

countries. Second, it was the resumption of direct trade between Indonesia and China in 1985.

The last event was the normalization of Indonesia-PRC relations that happened in August

1990s. Since then Indonesia-PRC relations were improved and shifted into economically

driven interests. At the same time, Indonesia and Taiwan relations also improved gradually

due to the economic interests between them.

After the Chinese Chamber of Commerce was set up in Jakarta, Taiwan and Indonesia

enhanced their economic cooperation in agricultural sectors and investments. The peak of

their relations occurred when Taipei was allowed to rename its trade representative office in

Jakarta into Taipei Economic and Trade Office (TETO) in the late 1980s which gave

politically meaning status for Taiwan. Moreover, in 1994, the Taiwanese government also

launched the economic program called “Southward Policy” to improve economic relations

with countries in Southeast Asia. In sum, as argued by Ku, the primacy of economic interests

was influenced by the changing pattern of relations among Indonesia, China and Taiwan

since the mid 1980s.23

From the same perspective, Irawan also examined the status of cross-strait relations and its influenced toward Indonesia-China-Taiwan relations. He shared similar ideas with Ku that Indonesia will remain adhere one-China policy principle but keep nurtured harmonious relations with Taiwan due to the economic reasons. Though both scholars shared similar ideas, Irawan deepens his explanations on the importance of cross-strait relations toward

23 Ibid., p. 250

Indonesia’s national interest in the future. He compared the three future possibilities with the status of cross-strait relations and the impacts for Indonesia: (1) if the two Chinese regimes used military force to solve the status on the Taiwan strait, then Indonesian’s economy would be threaten; (2) if the status quo were maintained, Indonesia could focus on the internal structural reform; (3) if the peace unification over the Taiwan strait occurred, it may divert

Taiwanese investment from Indonesia to China thus reducing Indonesia’s net marginal economic benefit, or create better economic opportunities for Indonesia from the unification of Taiwan and China.24 Irawan’s analysis is based on the calculation of cost and benefit that

Indonesia would get from the development of cross-strait relations. Nevertheless, he shared

similar ideas with other scholars that concern over the economic primacy from Indonesia and

cross-strait relations.

Scholars on this field, also classified as the proponents of realist because their

analyses are based on the calculation of national interest and the role of hegemon (on this

context is PRC) that endorse Indonesia maintain triangular relations both with China and

Taiwan. The scholars employ the realist approach that analyzes Indonesia as the subject of

research since Indonesia shared unique characteristics and relations with Taiwan and China.

However, the explanation has weakness that lack to explain how state’s interest could create

cooperation among states. They treat state’s interest as strategy to cooperate with others but

not to explain how state form that interest.

In sum, both perspectives shared thoughtful arguments and ideas that contributed to

the development of Taiwan and Indonesian studies. Their analysis also covered broad range

of issues and approaches that made the discourse on Taiwan-Indonesia relations more fruitful.

Overall, the debate over Taiwan-Indonesia relations could be highlighted as seen in the table

below:

24 Andi Irawan, “The Political Economy of Indonesia and Cross-Straits Relations,” in Ho Khai Leong and Hou Kok Chung, eds., Ensuring Interests: Dynamics of China-Taiwan Relations and Southeast Asia (Malaysia: Institute of China studies, 2006), pp. 254-255

Table 1-2. Summary of Literature Review

Perspectives Main Approaches Strength Weaknesses Arguments 1. The primacy Taiwan has been Liberal-political Clearly pointed out Lack of explanation of Taiwan’s able to maintain economy Taiwan’s main about how economic economic its relations with approach interests in interest can give spill- T diplomacy Indonesia due to strengthening its over effects to the A and interests Taiwan relations with political relations I economic power countries in between Indonesian and W and interests Southeast Asia Taiwan . A N 2. The shifting Taiwan has been Liberal-complex Obviously explained Failed to explain how international able to build interdependence the conditions of the third characteristics P order economic approach international order of complex E linkages with that influence state interdependence – the R Indonesia due to actions and foreign minor role of military S the shift in policy forces affected Taiwan’s P international diplomatic maneuvers in E order that create the Asia-Pacific C multiple channel T of contacts and I the absence of V hierarchy among E issues

3. The Taiwan has been Realist approach Completely Missed the analysis development able to cooperate examined the impact about how PRC’s of cross-strait with Indonesia of cross-strait response toward relations due to the relations toward Taiwan’s relations with perception of Taiwan’s foreign countries in Southeast economic threat policy Asia that stems from PRC (cross-strait relations 4. The influence Taiwan has been Constructivist Apparently discussed Their analyses do not of people-to- able to build approach how non-state actors entirely cover the people economic and multi track explanations about the interactions linkages with diplomacy helped a effectiveness of Indonesia due to country to interact Taiwanese businessmen the role of with other countries to promote Taiwan- Taiwanese Southeast Asia political businessmen that relations. They only act as a address the bargaining diplomatic power that Taiwan weapon for earned from the Taipei through existence of Taiwanese their huge investment overseas investments 1. Policy of Indonesia has Realist approach Provide different The explanations drawn I separation of been able to insight toward a generalization in N politics and maintain its Southeast Asia-PRC- which discussed the D economics economic ROC relations that issue from the whole O relations with not merely focused picture of Southeast N Taiwan due to on political and/or Asia countries as a

E the separation of economic interests region. The analysis of S politics and but how to maximize each state behavior I economics economic interest should be included since A while keep avoiding each country share N political disputes different policy between PRC and characteristics P Taiwan E 2. Cross-Strait Indonesia has Realist approach Obviously describe Lack of explanation R Relations been able to Indonesia’s political about how state’s S Approach build economic and economic interest could create P relations with interests toward its cooperation among E Taiwan due to relations with states. This approach C the national Taiwan and PRC treat state’s interest as T interests of strategy to cooperate I Indonesia and with others but not to V the role of PRC explain how state form E among Indonesia that interest and Taiwan relations Source: from the Author

The table above clearly pointed out the domain issues and approaches that have been

done by other scholars about Taiwan and Indonesia relations. The assessment of strength and

weaknesses also helped to enrich the discourse on Taiwan and Indonesian studies. Taiwan’s

perspective have been able to explain the rationale causes for Taiwan’s ability to conduct

relations with countries in Southeast Asia though lack of political diplomatic relations.

However, the debate still left room for further improvement particularly from the Indonesian

perspective that still far away behind the existing research from Taiwan perspective. Thus

this thesis will enrich the existing discussion from the Indonesian perspective.

The main point that has not been addressed from the Indonesian perspective is about

people-to-people interactions that helped to promote Taiwan and Indonesia relations. People

interactions within economic and socio-cultural relations between Indonesia and Taiwan are

massive. In terms of trade and investment issues, Indonesian business people particularly

Indonesian ethnic Chinese serve as independent economic agents for Indonesia and Taiwan.

In terms of socio-cultural issues, Indonesian migrant workers and Indonesian students play

their roles to promote governmental relations. Indonesian migrant workers act as independent

20 social agents between the Taiwanese society and both governments. In addition, Indonesian students work as independent cultural agents that improve government relations on the issue of cultural and educational exchanges.

The huge population and the intense interactions of these three types of people, yet

has been the minor parts of analysis within Indonesia and Taiwan relations. The literature

review findings imply that these people’s interactions still needs further discussion because

their interactions with Taiwan are massive, thus provide a necessity to address them as the

main tool of analysis on this thesis. This thesis will further examine how share ideas and

cultural-values constitute the interest of people that eventually make the people lead and

influence the state to interact with other states. The approach would be based on the

constructivist approach on International Relations that focus on the role of people.

7. Analytical Framework

(1) Theoretical Framework

The main analytical tool on this thesis is people as promoters of new ideas 25 lead state’s interactions with others. The importance of people within the study of international relation has been acknowledged to promote state’s relations with others. People-to-people interaction goes beyond the boundaries and sovereignty of the state. This part will examine the role of the people within state to state relations. The discussion will begin with conceptual approach from realist into constructivist’s core ideas to explain their views on state to state relations. Later on, the conceptual approach will be narrow down into the proposed framework which in the end will propose one hypothesis.

Realism approach treats the state as the main unit analysis on international relations studies. 26 State is the single and the main actor within the analysis of international relations

25 Jack Snyder, “One World, Rival Theories”, Foreign Policy , Nov/Dec 2004, No. 145, p. 59 26 Deeper explanation about Realism concept of actor in International Relations please referred to Karen Mingst, Essential of International Relations (New York: W.W. Norton & Company, 1996), pp. 70-78 and , Jack Snyder, “One World, Rival Theories, Foreign Policy , Nov/Dec 2004 Vol. 145, p. 59

21 phenomena. The idea of state is built from de facto and de jure idea. De facto consist of citizen, boundary and government, while de jure relates to the idea of sovereignty and recognition from other states. 27 The idea of sovereignty and recognition relies on the practice of acknowledgement of diplomatic relations between one state and another state. The absence of diplomatic relations made difficulties for the state to interact with other states. Thus on the realist point of view, interaction in the international order filled by state to state interactions under the leverage of official diplomatic relations. (See figure 1):

State A State B Diplomatic Relations

The above picture describes that state A has official diplomatic relations with state B, thus both interact each other without any hesitance. Both states practice government-to- government relations within various kinds of issues. Under official diplomatic relations state is easier to conduct interactions with others. Nevertheless, not every state has official diplomatic relations with other states. Under the absence of diplomatic relations, it will be difficult for the state to interact with others. Government-to-government relations are unlikely occurred among state that lack of diplomatic relations. Therefore, state to state interactions not conducted under the official governmental level but through the third parties which are people. 28 People from one state interact with other state through their movement that goes

beyond the state’s boundaries and sovereignty. Together with the development of

globalization, people could easily move from one state to another state.

27 The idea of de facto and de jure is the basic term to define one entity as state. Various discussion about the nature of the state can refer to Stephen D. Krasner, “Abiding Sovereignty”, International Political Science Review, Jul., 2001, Vol. 22, No.3, pp. 231-233 28 Third parties within state-to-state relations not only on the context of people but also on the context of other non-state actors such Multinational corporation, International Organizations or Non-governmental organizations. Due to the limitation of this thesis, however, this thesis only focuses to the role of people as third parties within Taiwan and Indonesia relations. In addition, because this thesis will employ Constructivist approach on the analysis parts thus the main tool analysis will be people-to-people interactions.

People-to-people interactions under the absence of diplomatic relations among two states often called as informal relations. This term appear because the relations among states not conducted by the government but by the people. The picture below shows how interaction between states occurred through their people’s interaction (Figure I.2):

State A No Diplomatic Relations State B

People-to-people interactions

The above picture explains that state A does not have diplomatic relations with state B, thus both will be difficult to connect each other. However, both countries still able to manage their relations due to the interactions that leads by the people. People build the network and provide information for the states, thus, both states can manage their relations within various issues. On this case, state serves as security and economic provider for the people.

The idea of state as economic and security provider explains from this example.

People from state A would like to do business in state B. Therefore, the people should move and reside from state A into state B to run his/her business. In order to be able to enter the state B, people from state A has to prepare some official documents primarily resident or working visa. The issuance of visa is the matter of governmental issues, thus the government from state A has to cooperate with the government B in order to be able to issue the visa for the people from state A that would like to do business in state B. Therefore, both governments are forcing to cooperate each other in order to fulfill the needs of the people of issuing visa.

From the above case, it explains two things. First, state as security provider has to protect their people wherever the people would like to go, without any consideration whether the state has diplomatic relations or not with other state. Thus the state has to work with other

23 state in order to issue the visa as a legal protection of the people when going overseas.

Second, state as economic provider allows the people from its state to do business overseas in order to fill the economic interest of the people. Thus, the state works as economic provider by providing information about business environment overseas or giving incentives to encourage the people to run business overseas. Those two activities as security and economic provider cannot be conducted, unless the state also builds connection with the destination state though lack of official diplomatic relations.

The above mentioned explanations show how people from different state interacts each other and influence state to state relations. However, the explanation has not addressed the interest of the people that would like to enter the country that do not have official diplomatic relations with their state. The explanation has not answered the underlying reasons that endorse people from state A willing to interact or to move with state B for studying, business or working despite under the absence of diplomatic relations. Constructivist approach that focuses on the concept of ideas and values will be employed in order to answer the underlying reasons of people’s migration. As mentioned before, realist approach treats state as the key actors on the study of international relations. On the opposite side, constructivist builds their arguments based on the analysis of individual or promoters of new ideas (read: people) as the key actors in international relations. 29

Constructivist argues that interest is formed through the process of reciprocal

interaction which constitute by the distribution of ideas. Interest is not given by order but

rather than constructed through reciprocal interactions. It is said that interests being formed in

the process of interaction rather than being formed prior to interaction. 30 Constructivist treats

29 Jack Snyder, “One World, Rival Theories”, Foreign Policy , Nov/Dec 2004 Vol. 145, pp. 59 and Stephen M. Walt, “International Relations: One World, Many Theories”, Foreign Policy , Spring 1998, Vol. 110, p. 38 30 John Baylis and Steve Smith, The Globalization of World Politics: An Introduction to International Relations (New York: Oxford University Press, 1997), p. 185

24 ideas and values as their main instruments to analyze the construction of interest. 31 People act

under the command of its ideas which later on they will share that ideas with other that

created a formation of ideas. “Shared ideas making up norms, institutions, threat-system, and

so on – that constitute the meaning of the distribution of power, either by constituting state’s

perceptions of that distribution or by constituting their identities and interests”. 32 The clear

explanation about distribution of ideas as follows.33 (Figure I.3)

Ideas

Shared ideas

Created norms,

institutions, threat system, etc

Constitute Interest – material

things

The above diagram explains the formation of interest that closely associated with

material things such economic and/or security interest. Those interests are actually shape

through distribution of ideas that promote by the people. Distribution of ideas mixed together

with cultural-values making up norms and institution which at the end constitute identities

and interests of the state. The process of interest formation also lurks by the culture 34 . Thus

interest are not given and shaped through material things, but rather from the process of

distribution ideas or non-material elements.

31 Jack Snyder, “One World, Rival Theories”, op.cit., p. 59 32 Alexander Wendt, Social Theory of International Politics (Cambridge: Cambridge University Press, 1999), p. 104 33 The chart is drawn from Alexander Wendt’s explanation about ideas, institution and interests. Please refer to Alexander Wendt, Social Theory of International Politics, op.cit., p. 104 34 Ibid.

In sum, in order to explain the underlying reasons why people willing to move and enter one’s country that does not have diplomatic relations with their country, it is based on the analysis of ideas that shared by the people. The ideas are the reasons that endorse those people to interact with another countries and societies. Wendt narrow down the concept of ideas into “knowledge” 35 that can be either private or shared knowledge. “Private knowledge consists of beliefs that individual actors hold that other do not.” 36 This private knowledge refer to the domestic or ideological considerations that being the key determinant of people to frame and act toward the surrounding environment. Meanwhile “shared knowledge or culture is the knowledge that is both common and connected between individuals”. 37 Thus on this sense, socially shared knowledge or culture also play a role to influence actor’s interactions.

Private and shared knowledge are the foundations that influence people to interact with others.

The private and socially shared knowledge will be formed into an institution.

Institution plays important role in bridging the governmental relations and providing network

sharing and information. As argued by Wendt, “institutions are fundamentally cognitive

entities that do not exist apart from actor’s ideas about how the world works”. 38 This

institution embodied the distribution of ideas that socially shared by the people. Distribution

of ideas together with the creation of institution constitutes the interest of the state that

eventually influences the state’s behavior to nurture its relations with the country that does

not share diplomatic relations.

I.7.b. Proposed Framework

Drawing from the above mentioned theoretical explanations, Indonesia and Taiwan relations could be explained by looking at the people-to-people interactions that existed among their ties. Furthermore, to further analyzes the underlying reason that caused

35 Ibid. 36 Ibid 37 Ibid., p. 141 38 Alexander Wendt, “Anarchy is What States Make of it: The Social Construction of Power Politics”, International Organization , Vol. 46, No.2, Spring 1992, p. 399

Indonesia is able to nurture its economic and socio-cultural relations with Taiwan, the concept of distribution of ideas – making up norms and institutions – constitute interest will also be employed. The clear explanation will be below (Figure I.4.):

Indonesia No Diplomatic Relations Taiwan

People-to-people interactions: 1. Indonesian Businessmen 2. Indonesian Migrant Workers 3. Indonesian Students

Above is the clear picture of Indonesia and Taiwan relations that built by people-to- people interaction. Both countries can keep their contact due to the interactions that constructed by the people. A clear note must be made that people within Indonesia and

Taiwan relations are not limited to those above written, which this thesis will be dealt with. 39

Further analysis will be addresses the underlying reasons that push or pull Indonesian

businessmen, Indonesian migrant workers and Indonesian students to come to Taiwan. In

order to analyze the underlying reasons can be drawn from the model analysis below:

Independent Variable: Dependent Variable:

Indonesian people as the Indonesia maintain durable promoter of ideas lead the economic and socio-cultural interactions with Taiwan relations with Taiwan

The term ideas consist of private knowledge and socially share knowledge. These two

knowledge narrows down into several frameworks that caused Indonesian people interact

with Taiwan. There are three main frameworks that help to explain the underlying reasons of

people’s migration: Environmental framework, economic framework, and cultural framework.

39 The term people within Indonesia and Taiwan relations are not limited to Indonesian businessmen, Indonesian migrant workers and Indonesian students. There are also other people such foreign spouse. However, due to the limitation of this thesis that will analyze the economic and socio-cultural ties between Indonesia and Taiwan, hence the tool of analysis only consists of those former three categories of people.

These frameworks will be used to examine factors that caused Indonesian businessmen,

Indonesian migrant workers and Indonesian students choose Taiwan as their destination for business, study and work.

Ideas that consist of private knowledge and socially shared knowledge contribute to

the making-up institution, such as Indonesian Business Association, Indonesian Student

Association and Indonesian Migrant Workers Association. These institutions serve as

independent agent that promotes Indonesia and Taiwan relations on the context of economic

and socio-culture issues. At the end these ideas and institution resulted in interest of

Indonesia to maintain economic and socio-cultural relations with Taiwan. It needs to

remember, the culture values also lurks just behind “interest”. The independent variable will

be narrow down as below: (See Figure I.5)

On the other side, the dependent variable will discuss the economical and socio-cultural

relations between Indonesia and Taiwan from the year of 1990 until 2012.

In sum based on the above explanation, the thesis proposed one hypothesis as follows

“due to the Indonesian people as the promoter of ideas lead the interactions with

Taiwan, Indonesia is able to maintain its durable economic and socio-cultural relations

with Taiwan despite under the absence of diplomatic relations”.

I.8. Thesis Arrangement

The thesis will be organized as follow:

Chapter I Introduction

1. Background of Information

2. Research Motive

3. Research Purpose

4. Research Approach

5. Research Method

6. Literature Review

7. Analytical Framework

8. Thesis Arrangement

Chapter II Economic Relations between Indonesia and Taiwan

1. Economic Relations Before the 1990s

1.1. Indonesian and Taiwan Trade Relations

1.2. Taiwanese Investment in Indonesia

2. Economic Relations After the1990s

2.1. Indonesia and Taiwan Trade Relations

2.2. Taiwanese Investment in Indonesia

Chapter III Socio and Cultural Relations between Indonesia and Taiwan

1. Migrant Workers in Taiwan

2. Indonesian Migrant Workers in Taiwan

3. Foreign Students in Taiwan

4. Indonesian Students in Taiwan

5. Academic and Cultural Exchanges Between Indonesia and Taiwan

Chapter IV People’s Ideas, Institutions, and Interests within Indonesia and Taiwan

Relations

1. Framework of Ideas

2. Creation of Institutions and Norms

3. Economic and Socio-Cultural Interests Between Indonesia and Taiwan

Chapter V Conclusion

1. Theoretical Implications

2. Implications for Indonesia and Taiwan

Chapter II

Economic Relations between Indonesia and Taiwan

Indonesia and Taiwan started their economic activity in 1967, an event marked by the first trade exchange through government-sponsored firm. After 1967, Indonesia continued to nurture its economic relations with Taiwan which not only included trade activity but also investment and agricultural trade missions. The intense interactions between Indonesia and

Taiwan led to the formation of a Chamber of Commerce both in Indonesia and Taiwan to coordinate and to control economic activities between both countries. Later on, in the beginning of 1990s this Chamber of Commerce was rename into Trade and Economic

Offices to further strengthen economic and socio-cultural relations between Indonesia and

Taiwan.

This chapter will further discuss the economic relations between Indonesia and

Taiwan from the year 1990 until 2012, yet, the economic activity before the year 1990-s will

also be described briefly to inform the early relations between Indonesia and Taiwan. Thus,

this chapter will be divided into two main parts: the economic relations before 1990s and the

economic relations after 1990s. Each part will examine two aspects of economic relations --

trade and investment between Indonesia and Taiwan.

1. Economic Relations Before the 1990s

Low intensity of economic interactions is the main characteristic of Indonesia and

Taiwan economic relations before the decade of 1990s. The sensitive issue of ethnic Chinese

was the main reason that caused limited economic interactions. 40 The racial issues against

ethnic Chinese appeared just after the abortive communist coup that occurred in 1965.

40 Samuel C.Y. Ku, “Indonesia’s Relations with China and Taiwan: From Politics to Economics”, Asian Perspective , Vol. 26, No.4, 2002, p. 229

Immediately after the coup, Indonesia suspended its diplomatic relations with PRC because they were suspicious of Beijing as being involved in and supportive of the Coup. Two years after the Coup, Indonesia under the tenure of President Soeharto started its economic activity with Taiwan which includes trade and investment relations.

In terms of trade activity, Indonesia and Taiwan conducted the first trade exchange through a government-sponsored firm in 1967. 41 After Indonesia suspended its relations with the PRC, the Indonesian government began to open its trade with Taiwan. Because of

Indonesia’s abundant resources, this country mostly export natural products such crude oil and wood to Taiwan, whereas Taiwan mainly export machines and electronics to Indonesia.

Two years after the first trade exchange, Indonesia received a trade mission from Taiwan.

The most important event during the trade activity before the 90’s was the establishment of

Chinese Chamber of Commerce in Jakarta on May 1971, whereas the Indonesia Chamber of

Commerce was also set up in Taipei on June 1971. 42 This was for the first time; both countries institutionalized their relations through the creation of Chamber of Commerce.

These two government bodies were set up to organize and control economic activity -- mainly trade between Indonesia and Taiwan.

In terms of investment relations, Taiwanese investors began to invest in Indonesia

from the beginning of 1970s with limited investments. The investment activities mainly

focused on manufacturing, mining, and textile mills. Taiwanese investment activity in

Indonesia before the year of 1990s can be seen below:

Table 2-1 Taiwanese Investment in Indonesia from 1952-1989 Year Case Amount (US$ 1,000) 1952 0 0 1953 0 0 1954 0 0 1955 0 0 1956 0 0 1957 0 0

41 Ibid 42 Ibid

1958 0 0 1959 0 0 1960 0 0 1961 0 0 1962 0 0 1963 0 0 1964 0 0 1965 0 0 1966 0 0 1967 0 0 1968 0 0 1969 0 0 1970 0 0 1971 1 35 1972 2 1.680 1973 0 0 1974 2 440 1975 1 270 1976 2 1.926 1977 0 784 1978 0 0 1979 2 3.700 1980 0 120 1981 0 1.960 1982 1 8.960 1983 0 0 1984 0 4.900 1985 1 1.000 1986 0 1.780 1987 0 950 1988 3 1.923 1989 1 311 Total 16 30.739 Source: Statistics on Approved Outward Investment by Year and Area http://www.moeaic.gov.tw/

The table above clearly shows that in terms of investment, Indonesia and Taiwan relations were very limited. The investments had just started after the creation Chamber of Commerce both in Taiwan and in Indonesia beginning in 1970. Nevertheless the case and amount of investment was limited in comparison to other Southeast Asian countries. 43 Indonesia’s

43 During the period of 1952 until 1989, there were six countries in Southeast Asia that received investment from the Taiwanese government. Those five countries were Singapore, Indonesia, Malaysia, Philippines, Thailand and Vietnam. Among those six recipients, Indonesia (16 cases) was in the fifth position after Thailand (72 cases), Malaysia (54 cases), Singapore (34 cases), Philippines (33 cases). Detailed information please referred to “Statistics on Approved Outward Investment by Year and Area” < http://www.moeaic.gov.tw/ >

33 unstable political and domestic conditions after the presidential power transitions in 1966 meant that the country received limited foreign direct investments.

Indonesia and Taiwan improved their economic relations when both countries held the First Conference on the Republic of China and Indonesia economic cooperation in 1985 44 .

The conference aimed to strengthen economic understanding between Indonesia and Taiwan thus inspiring future increased economic activities. This conference still takes place as the result of the massive economic interactions between Indonesia and Taiwan. One year later,

Indonesia’s Investment Minister visited Taipei. 45 This was the first visit from the Indonesian

high officials to Taipei during the tenure of Soeharto’s regime.

The peak of Indonesia and Taiwan relations took place when Indonesia allowed the

Chinese Chamber of Commerce in Jakarta to be changed into the Taipei Economic and Trade

Office to Jakarta in 1989. The use of Taipei as its name gave politically meaning status for

Taiwan 46 that it has been recognized as an independent entity that differ from the PRC in the

mainland. Even though this office uses the terms economic and trade, it has the same function

as a formal representative office with rights for issuing visas, and its staffs gain diplomatic

immunity and service. In addition, formal government to government relations are conducted

through this representative office.

Overall, from the above explanations, the economic activities between Indonesia and

Taiwan before the year 1990s were very limited. In terms of trade activity, there were two top

achievements: the establishment of Chamber of Commerce in 1970s, and the renaming from

Chinese Chamber of Commerce into the Taipei Economic and Trade Office to Jakarta in

1989. Furthermore, the number of total trade between Taiwan and Indonesia expanded from

44 Kuo-hsiung Lee, “The Republic of China and Southeast Asia: More Than Economy,” in Yu San Wang, ed., Foreign Policy of the Republic of China on Taiwan: An Unorthodox Approach (New York: Praeger, 1990), p. 92 45 Chen Jie, Foreign Policy of the New Taiwan: Pragmatic Diplomacy in Southeast Asia , (United Kingdom: Edward Elgar Publishing Limited, 2002), p. 68 46 Samuel C.Y. Ku, “Indonesia’s Relations with China and Taiwan: From Politics to Economics”, Asian Perspective , Vol. 26, No.4, 2002, p. 238

$44,41 million in 1970 to $345 million in 1975 and $821,05 million in 1979. 47 Moreover, in

terms of investment, Taiwan had not much investment in Indonesia before the year 1990s.

Within 20 years from 1970s until 1990s the number of Taiwanese investment in Indonesia

was only 16 cases of investment. The summary of economic relations between Indonesia and

Taiwan before the year of 1990s can be seen from the table below:

Table 2-2 Timeline of Economic Activity between Indonesia and Taiwan before the 1990s Year Event 1967 The first trade exchange through government-sponsored firm between Indonesia and Taiwan was established 1969 Indonesia received trade mission from Taiwan May 1971 Indonesia allowed the ROC government to set up the Chinese Chamber of Commerce in Jakarta June 1971 The Indonesia Chamber of Commerce was set up in Taipei December 1982 Premier Sun Yuan-suan and a party leading government officials visited Jakarta 1983 ROC Foreign Minister visited Jakarta September 1985 First Conference on the ROC-Indonesia Economic Cooperation was held and take place annually October 1986 Indonesia’s Investment Minister, Ginandjar Kartasasmita visited Taipei October 1989 The Indonesian government allowed the Chinese Chamber of Commerce rename into the Taipei Economic and Trade Office to Jakarta Source: Figures 1967-June 1971 and October 1989 are collected from Samuel C.Y. Ku, “Indonesia’s Relations with China and Taiwan: From Politics to Economics”, Asian Perspective , Vol. 26, No.4, 2002; Figure December 1982 is collected from http://taiwantoday.tw/ct.asp?xItem=171219&CtNode=124 ; Figure 1983 and October 1986 are collected from Chen Jie, Foreign Policy of the New Taiwan: Pragmatic Diplomacy in Southeast Asia , (United Kingdom: Edward Elgar Publishing Limited, 2002); Figure September 1985 is collected from Kuo-hsiung Lee, “The Republic of China and Southeast Asia: More Than Economy,” in Yu San Wang, ed., Foreign Policy of the Republic of China on Taiwan: An Unorthodox Approach (New York: Praeger, 1990), pp. 92

2. Economic Relations After the 1990s

Improvement of economic relations is the main characteristic of Indonesia and

Taiwan economic relations after the 1990s. Indonesia improved gradually its trade and

investment relations with Taiwan for several reasons. First, the set up of the Taipei Economic

and Trade Office in Jakarta boosted Taipei’s investment and trade activity with Jakarta.

Second, in terms of investment, Indonesia and Taiwan signed Bilateral Investment Protection

Agreement in 1990 that marked the development of investment activities. Third, Taiwan’s

47 Ibid., p. 237

35 economic diplomacy in Southeast Asia the so called “Southward Policy” influenced Taiwan’s economic relations with Indonesia. Fourth, Indonesia is able to maintain its domestic political-economy conditions after the financial crisis and power transition in 1998 that caused favorable investment and trade environment for Taiwan to improve its economic ties with Indonesia. The last is the role of Indonesian ethnic Chinese businessmen and Taiwanese business people that create a bridge to improve government to government relations.

In terms of trade activity, Indonesia’s trade numbers with Taiwan increase significantly following by the renaming of the Indonesia Economic and Trade Office to

Taipei in 1995. Trade relations between Indonesia and Taiwan include export and import activity. Taiwan’s export to Indonesia in terms of products and values can be seen in the table below:

Table 2-3 Values and Products of Taiwan Export to Indonesia 1990-2012 Ranking Products Values (US$) 1 nuclear reactors, boilers machinery and mechanical 8,808,791,611 appliances; parts thereof 2 mineral fuels, mineral oils and products of their 6,811,635,392 distillation; bituminous substances; mineral waxes 3 electrical machinery and equipment and parts thereof; 4,295,099,409 sound recorders and reproducers, television image and sound recorders and reproducers, and parts 4 iron and steel 3,879,015,632 5 plastics and articles thereof 3,321,205,578 6 knitted or Crocheted Fabrics 2,644,305,692 7 man-made filaments; Strip and the like of man-made 2,176,584,515 textile materials 8 organic chemicals 1,944,585,265 9 man-made staple fibers 1,938,024,522 10 vehicles other than railway or tram way rolling-stock, and 1,689,204,672 parts and accessories thereof 11 impregnated, coated, covered or laminated textile fabrics; 1,504,171,485 textile articles of a kind suitable for industrial use 12 articles of iron or steel 1,076,588,699 13 footwear, gaiters and the like; parts of such articles 994,206,930 14 tanning or dyeing extracts; tannins and their derivatives; 913,350,706 dyes, pigments and other coloring matter; paints and varnishes; putty and other mastics; inks 15 Cotton 832,302,329 16 miscellaneous chemical products 789,608,124

17 paper and paperboard; articles of paper pulp, of paper or 655,022,695 of paperboard 18 Inorganic chemicals; organic or inorganic compound of 546,106,194 precious metals, of rare-earth metals, of radioactive elements or of isotopes 19 rubber and articles thereof 529,308,059 20 raw hides and skins (other than fur-skins) and leather 507,392,658 21 Optical, photographic, cinematographic, measuring, 500,923,700 checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof 22 special woven fabrics; tufted textile fabrics; lace; 431,199,445 tapestries; trimmings; embroidery 23 fish and crustaceans, mollusks and other aquatic- 419,598,479 invertebrates 24 aluminum and articles thereof 418,693,029 25 copper and articles thereof 338,097,260 Total 47,965,022,080 Source: Bureau of Foreign Trade: Trade Statistics, http://cus93.trade.gov.tw/ENGLISH/FSCE/

The table above shows that Taiwan mostly exports products material and semi- finished materials to Indonesia. Taiwan exports 18,37 percent of its first-rank product such as nuclear reactors, boiler machinery and mechanical appliances; parts thereof to Indonesia, while mineral fuels, oils, and the products of its distillation shared 14,20 percent of total

Taiwan’s export to Indonesia. The percentage of Taiwan’s export products to Indonesia can be clearly highlighted from the chart below: 48

48 The percentage based on the values calculation of each ranking that divided into the total values of Taiwan’s export to Indonesia. I only collected the best ten products by ranking, the others summed up into “others” that cumulated from the eleventh-best ranking until twenty-fifth-best ranking products of Taiwan’s export to Indonesia.

Chart 2-1 The Percentage of Taiwan’s Export Product to Indonesia Based on Products and Values ranking 1990-2012

Meanwhile in terms of import products, Taiwan is prone to import raw materials from

Indonesia, such as mineral fuels and oils, wood, paper, tin, nickel, rubber, cotton, copper, and

fish. The semi-finished materials and material so products are include furniture, plastic,

textiles and electrical machinery. Taiwan’s import from Indonesia in terms of products and

values is clearly described in the table below:

Table 2-4 Values and Products of Taiwan Import from Indonesia 1990-2012 Ranking Products Values (US$) 1 mineral fuels, mineral oils and products of their 49,371,157,517 distillation; bituminous substances; mineral waxes 2 wood and articles of wood; wood charcoal 6,044,445,636 3 electrical machinery and equipment and parts thereof; 2,617,235,318 sound recorders and reproducers, television image and sound recorders and reproducers, and parts 4 organic chemicals 1,990,443,898 5 paper and paperboard; articles of paper pulp, of paper or 1,914,078,326 of paperboard 6 nuclear reactors, boilers machinery and mechanical 1,861,032,462 appliances; parts thereof 7 copper and articles thereof 1,536,039,036 8 tin and articles thereof 1,452,935,827 9 inorganic chemicals; organic or inorganic compounds of 1,366,794,550 precious metals, of rare-earth metals, of radioactive elements of isotopes

10 nickel and articles thereof 1,320,033,995 11 rubber and articles thereof 1,124,856,715 12 man-made staple fibers 1,036,829,699 13 pulp of wood or of other fibrous cellulosic material 822,644,560 (waste and scarp) paper of paper board 14 iron and steel 653,413,414 15 miscellaneous chemical products 589,305,780 16 plastics and articles thereof 578,186,455 17 furniture; bedding, mattresses, mattress supports, 564,957,644 cushions and similar stuffed furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated 18 fish and crustaceans, mollusks and other aquatic 510,984,206 invertebrates 19 Cotton 472,703,661 20 vehicles other than railway or tram way rolling-stock, and 378,875,950 parts and accessories thereof 21 footwear, gaiters and the like; parts of such articles 354,648,281 22 tanning or dyeing extracts; tannins and their derivatives; 311,666,497 dyes, pigments and other coloring matter; paints and varnishes; putty and other mastics; inks 23 man-made filaments; strip and the like of man-made 278,237,941 textile materials 24 salt; sulfur; earths and stone; plastering materials, lime 265,469,078 and cement 25 aluminum and articles thereof 246,488,713 Total 77,663,465,159 Source: Bureau of Foreign Trade: Trade Statistics, http://cus93.trade.gov.tw/ENGLISH/FSCE/

The above table highlight the fact that Taiwan’s imports from Indonesia mostly on

raw materials reaching 63,57 percent of total import. Other import products only share under

the percentage of 10 percent. Indonesia’s abundant resources -- particularly crude oil are the

main import commodities that play a role to improve trading activity between Indonesia and

Taiwan. The percentage of Taiwan’s import products from Indonesia can be clearly

highlighted from the chart below: 49

49 The percentage based on the values calculation of each ranking that divided into the total values of Taiwan’s import from Indonesia. I only collected the best ten products by ranking, the others summed up into “others” that cumulated from the eleventh-best ranking until twenty-fifth-best ranking products of Taiwan’s import from Indonesia.

Chart 2-2 Percentage of Taiwan’s Import Product from Indonesia Based on Products and Values ranking 1990-2012

The two charts above are the measurement of Taiwan’s export and import activity with Indonesia in terms of products and values. Indonesia and Taiwan trading activity experienced ups and downs relations from the year of 1990 until 2012. The number of

Indonesia and Taiwan trading activity can be seen from the table below:

Table 2-5 Export and Import Activity between Indonesia and Taiwan Based on Values per-Year, 1990-2012 Year Export Values (US$ 1000) Import Values (US$ 1000) 1990 1.245.811 921.587 1991 1.207.204 1.234.332 1992 1.214.753 1.407.269 1993 1.284.546 1.624.039 1994 1.433.032 2.114.386 1995 1.868.877 2.150.425 1996 1.955.334 1.884.483 1997 2.133.844 2.184.708 1998 1.058.121 2.114.404 1999 1.315.269 2.296.941 2000 1.741.769 3.020.530 2001 1.480.903 2.527.889 2002 1.472.619 2.592.605 2003 1.528.536 2.926.646 2004 1.895.854 4.114.535 2005 2.358.573 4.542.964 2006 2.499.510 5.204.299

2007 2.910.797 5.775.954 2008 3.566.014 7.288.968 2009 3.226.271 5.183.686 2010 4.509.630 6.020.156 2011 4.836.625 7.428.224 2012 5.190.198 7.324.792 Source : Figure 1990-2011 are collected from Taiwan Export-Import to Asia, ; Figure 2012 is collected from Bureau of Foreign Trade: Trade Statistics, Republic of China (Taiwan),

The table above shows the values of export and import activity between Indonesia and

Taiwan per year. In terms of export, Taiwan’s exports to Indonesia improve each year.

However, during the Asian financial crisis in 1998, the number of export values dropped

dramatically around 1.000.000 thousand per USD, yet it grew steadily until 2000. The

development of Taiwan’s domestic politics influenced the export activity between Indonesia

and Taiwan. During the first tenure of President Chen Shu-bian, export activity fluctuated

constantly. The fluctuations of export activity were also followed by poor performance of

political relations between Indonesia and Taiwan. There were several cases that triggered

hostility among them. First, in 2002, Taiwan’s Vice President Annette Lu made a “holiday

visit” to Bali but was not allowed to visit Jakarta.50 Second, in December 2003, Jakarta cancelled the visit of Taiwan’s President Chen to Yogyakarta thus making him fail to visit

Yogyakarta.51 However, the export activities began to show some improvements during the second tenure of President Chen. The export values started to rise slowly each year.

Furthermore, the export values also increased steadily under the leadership of President Ma

Ying-jeou.

In terms of import activity, the values of imports from Indonesia to Taiwan gradually increased from 1990 until 2000. The import values dropped significantly in 2000 until 2001, which fell from 3.020.530 thousand USD into 2.527.889 thousand USD. However, these

50 Taipei Times, “Lu’s Surprise Flight to Jakarta Backfires” accessed on March 21 st , 2013 51 The Jakarta Post, “RI Should be More Diplomatic Toward Taiwan” < http://www.thejakartapost.com/news/2003/01/12/ri-should-be-more-diplomatic-toward-taiwan.html > accessed on March 21 st , 2013

41 import values started to raise up again eventually reached the value of 7.288.968 USD, yet it dropped again on the first year of President Ma Ying-jeou’s presidency. In 2012, Taiwan’s export to Indonesia reached a peak into 5.190.198 thousand USD. Based on export-import activity, Taiwan is the eleventh trading partner for Indonesia in 2012.

In addition to the dynamics of export and import values, there were also several economic exchanges between Indonesia and Taiwan. First, in 1994, ROC Vice Minister of

Economic Affairs, Lee Shou-jou and officials from eight government-run firms visited

Indonesia 52 . This official visit thus made improvements on the trading activity between

Indonesia and Taiwan. One year later, Indonesia upgraded its economic representative in

Taipei from Indonesian Chamber of Commerce to Taipei into Indonesia Economic and Trade

Office to Taipei. This office practices the same function as Taipei Economic and Trade

Office in Jakarta. The recent development on trade activity occurred in 2010 when both

countries signed Memorandum of Understanding (MOU) on “one village one product”

cooperation for the year of 2010 until 2013 53 . Two years later in 2012, Indonesian Trade

Minister, Gita Wirjawan made a pay-back official visit to Taiwan 54 . Thus, Taiwan and

Indonesia not only improved its values of trade and investment but also its economic exchanges represented by government to government official visits.

In terms of investment, after the 1990s, Indonesia improved its business and investment activity with Taiwan. Taiwanese investment in Indonesia improved since 1990 because both countries signed a Bilateral Investment Protection Agreement. 55 This agreement gives protection and non-discrimination status for foreign investment in Indonesia, including

52 Taiwan Review, “Indonesia Balancing Act” < http://taiwanreview.nat.gov.tw/ct.asp?xItem=139&CtNode=1352 > accessed on March 21 st , 2013 53 Antara News “News Focus: Taiwan Investment in Indonesia improving” < http://portal.antaranews.com/en/news/79331/news-focus-taiwan-investment-in-indonesia-improving > accessed on March 21 st , 2013 54 Foxconn to Enter Indonesia < http://www.thejakartapost.com/news/2012/06/28/foxconn-enter-indonesia.html > accessed on March 21 st , 2013 55 Taipei Economic and Trade Office, Jakarta, Indonesia “Kondisi Hubungan Bilateral Antara Taiwan dan Indonesia” < http://www.roc-taiwan.org/ID/ct.asp?xItem=144651&CtNode=9323&mp=292&xp1= > accessed on March 21 st , 2013

Taiwanese investment. After the completion of Bilateral Investment Protection Agreement,

Taiwanese investment in Indonesia increased significantly from one-cases in 1989 into eighteen-cases of investment in 1990. The values also rose up from 311 million USD in 1989 into 61.871 million USD. Detail number of cases and values of Taiwanese investment in

Indonesia from 1990 until 2012 can be seen from the table below:

Table 2-6 Taiwanese Investment in Indonesia Based on Cases and Values from 1990- 2012 Year Case Amount (US$ 1,000) 1990 18 61.871 1991 25 160.341 1992 20 39.930 1993 11 25.531 1994 12 20.571 1995 8 32.067 1996 13 82.612 1997 22 55.861 1998 15 19.541 1999 5 7.321 2000 4 33.711 2001 7 6.124 2002 5 9.163 2003 6 12.751 2004 0 2.445 2005 5 9.115 2006 4 8.798 2007 1 702 2008 1 2.931 2009 3 1.517 2010 1 389 2011 3 1.145 2012 6 17.200 Total 195 611.637 Source: Statistics on Approved Outward Investment by Area and Industry http://www.moeaic.gov.tw/

The table above describes the dynamic of Taiwanese investment in Indonesia within

12 years. In terms of investment cases, it reached a peak in 1991 with 25 cases of investment.

Afterwards, it fluctuated between 10 and 20 cases before the Asian financial crisis, though it

reached the lowest point of eight cases in 1995. After the Asian financial crisis, the number of

Taiwanese investment in Indonesia remained constant under 10 cases of investments each

43 year, except in 2004 when there was no accepted investment activity from Taiwan in

Indonesia.

In terms of amount of investment, it also fluctuated followed by the Asian financial

crisis or domestic political conditions. Even though the cases of Taiwanese investment were

low in 1995 compared to other years before the Asian financial crisis, but in terms of amount,

it was higher than the two previous years. The amount of Taiwanese investment was higher

before the Asian financial crisis due to the implementation of Southward Policy by President

Lee Teng-hui in 1994. The ROC’s Executive Yuan passed the “Operating Outline for

Strengthening Economic and Trading Relations with Southeast Asia” which formulated that

so called “Southward Policy” in March 1994 56 . This policy has several objectives: “(1) it seeks to divert local companies’ investment funds from China to Southeast Asia; (2) it aims to make Southeast Asia its intermediary for investing in Mainland China when Hong Kong reverts back to PRC in 1997; (3) it looks to strengthen Taiwan’s diplomacy relations with

Vietnam and the ASEAN State” 57 .

The implementation of this policy increased Taiwan’s investment in Southeast Asia

including Indonesia. Massive movement of capitals and people from the investment gave

domino effect to the socio-cultural relations when the Taiwanese government through their

Ministry of Education (MOE) built Surabaya Taipei International School in 1995 58 . The government built this school to meet the demands of better quality education for the children’s of Taiwanese businessmen who invested their capital in Indonesia, particularly in

Surabaya. The other school branch in Jakarta was established two years earlier with the same aim to fulfill the needs of better education for those Taiwanese businessmen’s children. The

56 Samuel C.Y. Ku, “The Political Economy of Taiwan’s Relations with Southeast Asia: The “Southward Policy”, Contemporary Southeast Asia , Vol. 17, No.3, December 1995, pp. 283 57 Ho Khai Leong, “New Directions in Taiwan-Southeast Asia Relations: Economics, Politics and Security,” Pacific Focus , Vol. X, No. 1, Spring 1995, pp. 84-85 58 Ministry of Education Republis of China (Taiwan) “An Introduction to Overseas Chinese School” accessed on March 21 st , 2013

44 movement of those Taiwanese businessmen together with their families and capital forced both governments to provide better living conditions to attract more investments from Taiwan to Indonesia.

After the Asian financial crisis, the values of Taiwanese investment in Indonesia

experienced ups and downs interactions. The biggest values of investment occurred in the

year of 2000 with total amount of investment was 33.711 million USD. This amount of

investment dropped significantly on the next following years that below the number of

10,000 million USD of investment. The values of investment exceeding 10,000 million USD

occurred in the year of 2003 and 2012. Taiwanese investment was raised up in 2003 because

President Chen reiterated “Go South Policy” for investment diversification in the mid of 2002

that boost Taiwanese investment in the next following years. 59 Go South Policy considered as

the second generation of Southward Policy that has been introduced by Chen’s predecessor in

1994. The strengthening commitment of Go South Policy, however, was irritated by the

Indonesian government’s decision that canceled the visit of President Chen to Yogyakarta in

the end of 2003. This event caused hostilities between Indonesia and Taiwan that resulted in

zero point of investment from Taiwan to Indonesia in 2004.

Even though in the 2000s, the political conditions between Indonesia and Taiwan

were far from harmonious relations, Taiwanese investors kept seeing business opportunities

in Indonesia. The ethnic Chinese community in Indonesia creates a bridge for Taiwanese

businessmen to invest in Indonesia. These ethnic Chinese people share similar language and

culture which attracts the interest of Taiwanese businessmen to invest their capital in

Indonesia. Indonesia is the home to the largest immigration of ethnic Chinese in Southeast

Asian thus appealing to Taiwan’s investors. Furthermore, these ethnic Chinese not only

shared similar language and culture but also provide information and networking for those

59 The China Post “President Chen Reiterates Go- South Policy for Investment Diversification” accessed on March 21 st , 2013

Taiwanese businessmen who are going to invest in Indonesia. 60 Thus, even though there are not harmonious relations between the two governments, people, especially the ethnic Chinese living in Indonesia, play a role in attracting more investment from Taiwan to Indonesia.

Taiwanese invest their capitals in Indonesia mostly on the three main sectors:

manufacturing with 142 cases of investment, mining and quarrying with 33 cases, and textile

mills with 30 cases of investment. On the other hand, the three smallest sectors for Taiwanese

investment in Indonesia are manufacturing not elsewhere classified, professional, scientific

and technical services, and furniture manufacturing. Details information of Taiwanese

investment by sectors show from the table below:

Table 2-7 Taiwanese Investment in Indonesia Based on Area of Investments, Cases, and Amounts 1952-2012 Area of Investment Cases Amounts (USD 1000) Agriculture, Forestry, Fishing and Animal Husbandry 6 21923 Mining and Quarrying 33 147567 Manufacturing 142 409618 Food Manufacturing 11 44199 Textiles Mills 30 110353 Wearing Apparel and Clothing Accessories Manufacturing 7 19357 Leather, Fur and Related Products Manufacturing 0 7150 Wood and Bamboo Products Manufacturing 10 21189 Pulp, Paper and Paper Products Manufacturing 5 4583 Chemical Material Manufacturing 4 4728 Chemical Products Manufacturing 8 18402 Rubber Products Manufacturing 1 980 Plastic Products Manufacturing 6 12489 Non-metallic Mineral Products Manufacturing 7 14300 Basic Metal Manufacturing 4 9722 Fabricated Metal Products Manufacturing 12 22151 Electronic Parts and Components Manufacturing 5 13969 Computers, Electronic and Optical Products Manufacturing 1 8620 Electrical Equipment Manufacturing 9 44589 Machinery and Equipment Manufacturing 4 1423

60 Interview with the President of Indonesian Federation of Taiwan Alumni Association (ICATI in Bahasa) on Thursday, April 4 th , 2013. ICATI is Taiwan Alumni Association that works to gather all Indonesian that graduated from Taiwan’s Higher Education. Currently, ICATI’s members are mostly from Indonesian Ethnic Chinese. ICATI also serve to improve business and socio-cultural relations between Indonesia and Taiwan. Another interview also done with the Head of Investment Department of the Indonesian Economic and Trade Office to Taipei on Wednesday, March 13, 2013. She argued that the factors of Indonesian ethnic Chinese that shared similar culture and language with Taiwanese businessmen being one factors that support Taiwanese investment in Indonesia.

Motor Vehicles and Parts Manufacturing 7 11411 Other Transport Equipment Manufacturing 9 39359 Furniture Manufacturing 1 118 Manufacturing Not Elsewhere Classified 1 526 Water Supply and Remediation Services 2 775 Construction 1 1540 Wholesale and Retail Trade 17 34374 Transportation and Storage 4 4408 Information and Communication 2 6610 Financial and Insurance 3 15262 Professional, Scientific and Technical Services 1 300 Total 211 642377 Source: Statistics on Approved Outward Investment by Area and Industry, http://www.moeaic.gov.tw/

Taiwan invests their capitals through Taiwanese business people ( 台商, taishang).

These Taiwanese business people invest their capitals and build several factories that created working fields for local and Chinese Indonesian. The most famous Taiwanese factory that expands its business in Indonesia is Pou Chen Company or PCC 61 . Pou Chen Company or

PCC is one of the largest Taiwanese shoes factories that expanded and built their network in

Jakarta since 1992. Nowadays PCC has three main factories, one overseas factory in Jakarta and the other two overseas factories in Sukabumi, West Java which was built in 2007 and

2008 62 . In 1999 PCC had 23,000 Indonesian workers and continued to expand until the number of 140,000 workers nowadays 63 . Thus PCC not only invested their capitals heavily but also provide working opportunities for a hundred local Indonesian.

Another famous Taiwanese factory that will invest its capitals and build its factory in

Indonesia is Hon Hai Precision Company Ltd or Foxconn. This company produces 40 percent of the world’s electronics for global brands such as Apple and Dell 64 . In July, the Chairman

61 There are a bulk number of Taiwanese factories that operated in Indonesia since the first Taiwanese investment in Indonesia in 1971. However, due to of data limitation, I only took one example from the successful stories of Taiwanese factories in Indonesia which is Pou Chen Company. 62 Pou Chen Company, Overseas Locations, , accessed on January 12 nd , 2013 63 The Journal, “Nike Workers in Indonesia Say They are Kicked and Slapped”, , accessed on January 12 nd , 2013 64 The Jakarta Post, “Foxconn to Enter Indonesia, < www.thejakartapost.com/news/201/28/foxconn-enter- indonesia.html > accessed on March 21 st , 2013

47 of Foxconn, Terry Gou visited Indonesia as the invitation from the Indonesian government to survey the market in Indonesia 65 . This company was planning to set up the company overseas in Indonesia at the end of 2012, however the plan was reschedule due to several technical factors. Though the planning was postponed but the Indonesian governments are optimistic that this company will begin its investment in 2013.

Besides growing up business overseas, Taiwanese investment to Indonesia also come up together with the government’s project development, for example, Morotai Development

Project. Morotai Development Project is a joint project between the Indonesian government and the Taiwanese government to develop the economic and social sectors in Morotai Island,

North Maluku, Indonesia. The Memorandum of Understanding between the two governments over the implementation of Morotai Development Project was signed in December 2012. The aims of the project are: “(1) to support the idea of Special Economic Zones (SEZs) in Morotai

Island that facilitate the development of economic and social sectors; (2) to facilitate the development of Morotai Island that can give economic-social benefits for the local people through several sectors (not limited as) such forest cultivation, eco-tourism, fisheries and aquaculture, and agriculture” 66 . To achieve these aims, the Taiwanese government endorses the Taiwanese investors and businessmen to invest heavily in this project. The Indonesian government appointed one main company, Jababeka Group to foster and to facilitate

Taiwanese investors that would like to invest their capitals in Morotai Island 67 .

Overall, there are two types of Taiwanese investment in Indonesia, expands business branch overseas, and comes together with governmental cooperation. On the context of

65 Taiwan News, “Hon Hai Mulls Investment in Indonesia” accessed on March 21 st , 2013 66 Kantor Dagang dan Ekonomi Indonesia di Taipei, “Penandatanganan MoU on Morotai Development Project”, accessed on January 13 rd , 2013 67 Kompas, “Investor Asing Ingin Beli Pulau Morotai”, accessed on January 13 rd , 2013

48 business expansion, the investment was brought by the Taiwanese business people who built their companies in Indonesia and employed a hundred local Indonesia. On the context of investment that comes together with governmental cooperation, those Taiwanese business people cooperate with their governments to invest in Indonesia. Those Taiwanese business people also work together with the local companies that mostly owned by the Indonesian

Chinese. Indonesia and Taiwan dynamic political economy relations are sum up on this table:

Table 2-8 Timeline of Political-Economy Activities between Indonesia and Taiwan, 1990-2012 Year Events 1990 Indonesia and Taiwan signed Bilateral Investment Protection Agreement January 1992 Jakarta Taipei School was established to fulfill the needs of Taiwanese businessmen’s children education February 1994 President Lee Teng Hui made a historical visit to Indonesia March 1994 The Republic of China’s Executive Yuan passed “Operation Outline for Strengthening Economic and Trading Relations with Southeast Asia”, which formulated the so-called “Southward Policy” April 1994 The Republic of China Vice Minister of Economic Affairs Lee Shou-jou and officials from eight government-run firms visited Indonesia January 1995 The Indonesian Chamber of Commerce in Taipei was renamed into the Indonesian Economic and Trade Office to Taipei July 1995 Surabaya Taipei International School was established August 2002 Vice President of Taiwan, Annette Lu made a “holiday visit” to Bali but not allowed to visit Jakarta August 2002 President Chen reiterated “Go South Policy” for investment diversification December 2003 Jakarta cancelled the visit of Taiwan’s President Chen Shu-bian to Yogyakarta 2010 Indonesia and Taiwan has signed a Memorandum of Understanding on one village one product cooperation for the period of 2010 until 2013 July 2010 Indonesia’s Minister of Maritime Affairs and Fisheries visited Taiwan to propose joint development in Morotai Island to the Republic of China’s President, Ma Ying-jeou August 2010 The Chairman of Indonesia Investment Coordination Board (BKPM), Gita Wirjawan visited Kaohsiung and Taipei for investment purpose September- Taiwan’s Ministry of Economic Affairs, Dr. Yen-Shiang Shih made a visit October 2010 to Jakarta together with Taiwanese business delegation February 2011 Taiwan’s investors started their fishery investment activities in Mega Minapolitan area in Morotai, North Maluku March 2011 Indonesian Minister of Marine Affairs and Fisheries visited Taiwan to participate in the “Forum for Cooperation in Morotai” and to advocate bilateral cooperation toward the development of the island July 2011 TAITRA organized Indonesia and Taiwan Business Day in Taipei September 2011 Taiwan’s Minister of Economic Affairs launched a business tour to Indonesia for further investment and business activities

May 2012 Indonesian Trade Minister visited Taiwan June 2012 Indonesia Association Employment (APINDO) signed a Memorandum of Understanding (MOU) with Chinese National Federation of Industries (CNFI) which took place in Ministry of Industry, Jakarta July 2012 Hon Hai Chairman (Foxconn) Terry Gou, visited Indonesia as the invitation from the Indonesian government to survey the market in Indonesia December 2012 Taiwan and Indonesia signed a Memorandum of Understanding (MOU) on a plan to jointly develop Morotai Island in North Maluku, Indonesia Source: From the Author

In sum, Indonesia and Taiwan economic relations have two main stages and

characteristics. First stage or the early relations occurred from the year of 1967 until 1990

with low intensity of economic interactions. Second stage took place from the year of 1990

until 2012 with the improvement of economic relations. There are five main factors that

contribute to the improvement of economic relations between Indonesia and Taiwan: the set

up of solid institution, governmental agreement for economic enhancement, Taiwan’s

successful economic diplomacy, stable domestic political conditions, and the role of people in

terms of businessmen as a source of business information and network.

Chapter III

The Socio-Cultural Relations between Indonesia and Taiwan

In the 1990s, Indonesia and Taiwan not only improve its economic relations but also

enhance its socio and cultural relations. Socio and cultural relations includes the discussion

about the activity of Indonesian migrant workers and Indonesian students in Taiwan, also

governmental cooperation related to the socio-cultural exchanges between Indonesia and

Taiwan. Indonesian migrant workers and Indonesian students are the “real ambassador” for

Indonesia to improve its socio and cultural relations with Taiwan. Indonesian migrant

workers started to come and work in Taiwan since 1989, while the Indonesian students begun

their study approximately in 1987.

This chapter will further discuss about the socio and cultural ties between Indonesia

and Taiwan which is built by Indonesian migrant workers and Indonesian students. The

chapter will be divided into five parts. First part is about migrant workers in Taiwan. Second

part discuss about Indonesian migrant workers in Taiwan. Third part describes about foreign

students in Taiwan. Fourth part describes about Indonesian students in Taiwan. Last part

discusses the socio and cultural exchanges between Indonesia and Taiwan.

III.1. Migrant Workers in Taiwan

Taiwan officially started to import migrant workers in October 1989 when the

government passed the legislation to open the domestic job markets for the migrant workers

from limited number of countries.68 In the beginning of opening the job markets, Taiwan only

allowed those foreign workers to work at the construction projects, however, started in the

68 Anne Loveband, “Positioning the Product: Indonesian Migrant Women Workers in Taiwan”, Journal of Contemporary Asia , 2004, Vol.34, No.3, pp. 337, Kenji Kaneko, “Foreign Migrants in Taiwan and Japan: A Comparative Analysis”, Asia Journal of Global Studies , 2009, Vol.3, No.1, pp. 24, and Hong, Jon-Chao; Yang, Yi-Chiang; Chen, Jin-Fu; Yang, Tin-Ya, “Foreign Workers in Taiwan”, National Taiwan Normal University, , pp. 1

51 beginning of 1990s Taiwan opened its private and domestic sectors for migrant workers.

Migrant workers in Taiwan mostly work on five main sectors: major infrastructure/construction, major investment projects of manufacture industry, housekeeper, home-care assistant and foreign shipmates. 69 Those fields of work consider as blue-collar

jobs or low-skilled jobs.

Migrant workers that work on the infrastructure/construction, major investment projects of manufacture industry and the crewmen of shipmates are classified as foreign workers in productive industries. On the other side, foreign labors that work as home care assistant and house maid are classified as foreign workers in social welfare. By the end of

2012, the total numbers of foreign workers that work in the productive industries are 242,855 people which divided into 9,313 people work as crewmen of shipmates, animal husbandry and agriculture; 230,604 work in manufacturing; 14,550 work in major investing; 2,968 work in construction projects; and 2,630 work on the major construction projects. 70 On the other hand, the total numbers of foreign workers in social welfare are 202,694 workers that includes 200,530 as nursing workers or home care assistant; and 2,164 as home maid workers. 71 Thus, by the end of 2012, the total numbers of migrant workers in Taiwan are

445,579 people or 1,2 percent of total population in Taiwan.

There are two main reasons that endorse the Taiwanese government opened up its job market for migrant workers. First, the labor shortage phenomena occur due to the increase of low-birth rate and aging population in Taiwan that caused limited numbers of youngsters to work on those five sectors. Second, the Taiwanese young generations preferred to work on the business and financial sectors because working on the above mentioned five sectors often

69 Hong, Jon-Chao; Yang, Yi-Chiang; Chen, Jin-Fu; Yang, Tin-Ya, “Foreign Workers in Taiwan”, National Taiwan Normal University, < http://www.jil.go.jp/foreign/countryreport/2005_1107/taiwan_e.pdf >, pp. 2-3 70 Foreign Workers in Productive Industries and Social Welfare by Industry, < http://www.cla.gov.tw/cgi- bin/siteMaker/SM_theme?page=49c05774 >, Council of Labor Affairs, Taiwan, ROC 71 Ibid.

52 consider as “Three D” jobs: dirty, dangerous and demanding. 72 Thus, to overcome the problem of lack low-skilled jobs and to maintain its growing economy, the Taiwanese government allowed foreign workers to participate on Taiwan’s job markets.

Migrant workers in Taiwan mostly come from Southeast Asia. Indonesia, Philippines, and Vietnam are the three biggest populations of migrant workers in Taiwan. By the end of

January 2013, there were 445,301 migrant workers in Taiwan which divided into 193,177 of

Indonesia, 4 of Malaysia, 86,720 of Philippines, 65,334 of Thailand and 100,066 of

Vietnam. 73 The clear graphic shows below:

Chart 3-1 Migrant Workers in Taiwan by January 2013

Thus, based on the graphic, Indonesian migrant workers is the largest population of migrant

workers in Taiwan. Vietnam is in the second position, followed by Philippines, Thailand and

the last is Malaysia. The huge number of Indonesian migrant workers in Taiwan shows that

people to people interaction between Indonesia and Taiwan is massive. Moreover, those

people served as the bridge for government to government relations under the absence of

diplomatic relations between Indonesia and Taiwan.

72 Hong, Jon-Chao; Yang, Yi-Chiang; Chen, Jin-Fu; Yang, Tin-Ya, “Foreign Workers in Taiwan” Op.Cit. pp. 23 73 Foreign Workers in Productive Industry and Social Welfare by Industry and Nationality, , Council of Labor Affairs, Taiwan, ROC

III.2. Indonesian Migrant Workers in Taiwan

The first existence of Indonesian migrant workers in Taiwan has not recorded very well. 74 Based on some literature search, Indonesian migrant workers had been working in

Taiwan since the late of 1980s together with other migrant workers from Southeast Asia countries. 75 During this period, those migrant workers are classified as undocumented

migrant workers in Taiwan. The existences of migrant workers in Taiwan has just recently

recognized when the Taiwanese government passed the legislation to open its job market for

foreign workers in 1989. Since then, the statistics on Indonesian migrant workers started to be

well-organized by the Taiwanese government.

After the opening of job market in Taiwan, Indonesian migrant workers started to come and work in Taiwan. They only allowed working in the construction projects, thus mostly migrant workers were male. However, due to the increasing number of elderly people, the Taiwan’s government allowed female migrant workers to serve as care-taker for those elderly people. Since 1993 Taiwan has been transformed into ageing society with more than ten-percent of the population were people over sixty-five-years old. 76 In addition, due to the

growing of economy and socio-cultural changes that endorse Taiwanese women to work as

well like the men, the Taiwanese family was lack of people to take care of their old-parents

and kids. Thus, the family was force to hire migrant care-taker and/or house maid to look

after for their parents or kids while they are working in the office. The problem of ageing

society and lack of women’s to take-care of their family’s member, let the Taiwanese

74 Interviews, done on March 14, 2013 with the Head of Labor Department, the Indonesian Economic and Trade Office (IETO) in Taipei. 75 Kenji Kaneko, “Foreign Migrants in Taiwan and Japan: A Comparative Analysis”, Asia Journal of Global Studies, 2009, Vol.3, No.1, pp. 24 76 Based on CIA World Fact Book, the number of elderly people in Taiwan is 11,6% from the total population, please refer to < https://www.cia.gov/library/publications/the-world-factbook/geos/tw.html > and Shu-Man Pan and Jung-Tsung Yang, “Sexual Abuse of Live-In Care Workers in Taiwan”, National Taiwan Normal University and National Taiwan University, < http://cdn.intechopen.com/pdfs/33668/InTech- Sexual_abuse_of_live_in_care_workers_in_taiwan.pdf > pp. 223

54 government opened-up its domestic job market for female migrant workers from Southeast

Asia, particularly from Indonesia, Philippines and Vietnam.

Since Taiwan had been agree to receive foreign workers in social welfare sectors, the number of Indonesian migrant workers in Taiwan increased significantly from only 190 people in 1991 into 5,204 in 1993. 77 The number grew-up each year and reached a peak in

2002 with total number of 93,212 people. Afterwards, it dropped to the lowest point of only

27,281 Indonesian migrant workers in 2004. However, in 2005 the statistics showed double

improvement of Indonesian migrant workers in Taiwan. The detail statistics on the number of

Indonesian migrant workers in Taiwan shows from the table below:

Table 3-1 Statistics on the Total Number of Indonesian Migrant Workers in Taiwan 1993-2012 Year Total Number of Migrant Workers both Female and Male (person) 1993 5.204 1994 6.020 1995 5.430 1996 10.206 1997 14.648 1998 22.058 1999 41.224 2000 77.830 2001 91.132 2002 93.212 2003 56.437 2004 27.281 2005 49.094 2006 85.223 2007 115.490 2008 127.764 2009 139.404 2010 156.332 2011 175.409 2012 191.127 Source: Figure 1993 is collected from Michele Ford, “Migrant Labor in Southeast Asia, Country Study: Indonesia”, Friedirch Ebert Stiftung (FES), Project on Migrant Labor in Southeast Asia , pp. 7 Figure 1994- 1998 are collected from Chen Jie, “Human Dimensions of Taiwan – Southeast Asia Economic Interdependence: A Preliminary Observation” in Samuel C.Y. Ku, ed., Southeast Asia in the New

77 Michele Ford, “Migrant Labor in Southeast Asia, Country Study: Indonesia”, Friedirch Ebert Stiftung (FES), Project on Migrant Labor in Southeast Asia , pp. 7

Century: An Asian Perspective (Kaohsiung: Center for Southeast Asian Studies, National Sun Yat-sen University, 2002), pp. 87; Figure 1998-2012 are collected from Foreign Workers in Productive Industries and Social Welfare by Nationality and Sex, < http://www.cla.gov.tw/cgi- bin/siteMaker/SM_theme?page=49c05774 >, Council of Labor Affairs, Taiwan, ROC

The table above shows that the number of Indonesian migrant workers that working in

Taiwan increase each year since the opening of social welfare sector jobs in 1993. The

statistics proves double improvement of Indonesian foreign workers each year. However, in

2003 the statistics demonstrate a steep decrease of migrant workers because the Taiwan’s

Council of Labor Affairs held a ban on importation of migrant workers from Indonesia. It

occurred due to a high rate of absconding ( kaburan in Bahasa) and a refusal from Indonesia to lower commission charges on imported workers. 78 The main reason that caused the high rate of absconding was due to lack of well-organized institution from Indonesia to regulate and to control the inflow of Indonesian migrant workers to Taiwan. 79 Thus, this situation

created a poor controlling mechanism and regulation that resulting in a high rate of

absconding.

To solve the problem of ban importation, the two governments met together in Bali to discuss the possibility of re-opening up the migrant workers from Indonesia. After several meeting and discussion, both governments agreed to issue a Memorandum of Understanding between Indonesian and Taiwan on the issue of labor importation in December 2004. 80

Taiwan agreed to lift a ban on labor importation from Indonesia while Indonesian

government agreed to set up a clear and manageable regulations and institution for the inflow

of Indonesian migrant workers. Since then, the number of Indonesian migrant workers

improved two-times in 2005.

78 “CLA Says Workers Must Leave”, Taipei Times , accessed on April 22 nd , 2013, 79 Interviews, done on March 14, 2013 with the Head of Labor Department, the Indonesian Economic and Trade Office (IETO) in Taipei 80 “Taiwan, Indonesia Sign Agreement on Labor Importation”, Taipei Times, accessed on April 22 nd , 2013, < http://www.taipeitimes.com/News/front/archives/2004/12/19/2003215726 >

This was for the first time, the two official governments sat and met together on the

issue of migrant workers. From this case, it shows that migrant workers also help to improve

government to government relations under the absence of formal diplomatic relations.

Formally speaking, the two governments were not able to meet on the official level due to the

adherence of one-China Policy by the Indonesian. However, due to the problem of migrant

workers that needs to be solved, the two governments were force to meet on such high

official meeting. Furthermore, both governments were represented by their own Minister

Labor Affairs. Indeed, the two governments agreed to issue a Memorandum of Understanding

which views as a rare case that likely to occur between Indonesia and Taiwan. Thus, the

Indonesian migrant workers create a bridge for both governments to meet and discuss on the

official level of state to state relations.

Indonesia migrant workers mostly works on the social welfare sectors rather than

productive industry. Almost 84% of Indonesian migrant workers work as care-taker or house-

maid while 16% work on other fields such industry and manufacturing and shipmate 81 . Thus, the composition of Indonesian female migrant workers is bigger than the number of the male.

Based on CLA statistics, in 2012, there were 191,127 Indonesian migrant workers that includes 160,451 were females while 30,676 were males. 82 Details statistics on the field of working of Indonesian migrant workers is shown from the table below:

Table 3-2 Statistics on Total Number of Indonesian Migrant Workers Based on Field of Industry per January 2013 Field of Industry Total Number (person) Agriculture, forestry, fishing & animal husbandry (Crewmen) 7.875 Manufacturing 26.162 • Food 1.454 • Beverages 30 • Textiles mills 3.075

81 Interviews, done on March 14, 2013 with the Head of Labor Department, the Indonesian Economic and Trade Office (IETO) in Taipei 82 Foreign Workers in Productive Industries and Social Welfare by Nationality and Sex , Council of Labor Affairs, Taiwan, ROC

• Wearing apparel 220 • Leather & fur products 180 • Wood & bamboo products 366 • Pulp & paper products 641 • Printing & reproduction of recorded media 280 • Petroleum & coal products 9 • Chemical material 219 • Chemical products 451 • Pharmaceuticals & medicinal chemical products 51 • Rubber products 670 • Plastic products 2.297 • Non-metallic mineral products 1.170 • Basic metal 1.922 • Fabricated metal products 6.150 • Electronic parts & components 771 • Electronic & optical products 134 • Electrical equipment 593 • Machinery & equipment 2.523 • Motor vehicles & parts 621 • Other Transport Equipment & Parts 1.044 • Furniture 397 • Others 894 Construction 20 Human health & social work services & other services 159.120 Grand Total 193.177 Source: Foreign Workers in Productive Industry and Social Welfare by Industry and Nationality, , Council of Labor Affairs, Taiwan, ROC

Based on the table above, it shows that more than 80% of Indonesian migrant workers work on the social welfare services industry. Only few number of Indonesian works at other sectors. Indonesian migrant workers that work on the social welfare industries mostly served as care-taker for the elderly people. The existences of Indonesian migrant workers in Taiwan not only contribute foreign remittances and taxes for both Indonesian and Taiwan but also improve formal governmental relations.

Formal governmental interactions not only occurred in 2004 but also continued in

2011 when both governments renew the MOU on labor importation. Furthermore, to disseminate the content of the MOU, both governments held a Joint Working Group Meeting

58 of Labor in Taipei, on April 2011. 83 This Joint Working Group involved several

governmental officials both from Indonesia and Taiwan such as the representative from

Indonesia’s Ministry of Manpower and Transmigration, representative from Indonesia’s

Ministry of Trade, Indonesian labor Agency, Taiwan’s Ministry of Council Labor Affairs,

officials from Taiwan’s Ministry of Foreign Affairs, officials from Taiwan’s Ministry of

Fishery and TETO’s Head of Representative. 84 The Joint Working Group discussed about the problems related to Indonesian migrant workers such un-paid workers, agencies’ fraud, and sexual abuse. In addition, the meeting also discussed the possibility to arrange new agreement on the field of fishery migrant workers between Indonesian and Taiwan

In addition, Taiwanese government also passed legislation that allows the foreign workers to stay and work in Taiwan for only 9 years at the most into 12 years of working. 85

This new legislation gives opportunity for foreign workers to work longer in Taiwan up into

twelve-years. Both Indonesian migrant workers and Taiwanese society are welcome to the

new legislation passed by the government. This new legislation proves the importance of

Indonesian migrant workers to enhance Indonesia and Taiwan relations and to serve the

needs of Taiwanese society.

In sum, the existences of Indonesian migrant workers in Taiwan help to promote government to government interactions under the absence of formal diplomatic relations.

Formally speaking, it is difficult for Indonesia and Taiwan to conduct an official governmental meeting, however, the dynamic interactions of Indonesian migrant workers in

Taiwan, made both governments nurture their interactions each other. For Indonesia, the

83 “Joint Working Group (JWG) Meeting of Labor between Indonesia and Taiwan on 29th April 2011 at The Grand Hotel Taipei” Indonesian Economic and Trade Office to Taipei”, < http://www.kdeitaipei.org/eg/index.php?option=com_content&view=article&id=134:joint-working-group-jwg-meeting-of-labor- between-indonesia-and-taiwan-on-29th-april-2011-at-the-grand-hotel-taipei&catid=41:news-and-event > accessed on February 20 th , 2013 84 Ibid. 85 Bambang Purwanto, “Indonesian Workers to enjoy Longer Stay in Taiwan, Antara News, January 24 th , 2013 < http://www.antaranews.com/en/news/79435/indonesian-workers-to-enjoy-longer-stay-in-taiwan >

59 migrant workers not only contribute as heroes of remittance but also “the independent social agent” that creates a path to improve socio-cultural relations with Taiwan.86

III.3. Foreign Students in Taiwan

Taiwan not only filled by the huge number of foreign workers but also massive

number of foreign students. There are several reasons that bring Taiwan as a popular

destination for study. First, Taiwan considered as one of developed country in Asia that has

good quality of education. It proved by several world research achievements, good facilities

of education, many graduated professor overseas (mostly from the U.S.), and world ranking

university. Second, Taiwan is Mandarin speaking country that has a lot of Chinese Language

Center to teach Mandarin. Mandarin is widely-accepted as the second foreign language after

English. Third, even though Taiwan is Mandarin speaking countries, it has several English

teaching programs that enable students to study in English while improving Chinese for daily

life. The last, the cost of living and studying in Taiwan considered as affordable which can be

reached by not only American or European students but also Asian students. Therefore,

Taiwan is one of favorite study destination by students from America, Europe or Asia.

Foreign students in Taiwan mainly come from America, Europe and Asia. They are

divided into three types of students: international degree-seeking student who come to

Taiwan to earn degree levels such bachelor, master or doctoral; exchange student that come

to Taiwan for one or two semester of exchange; and Chinese Language Center student who

pursue Chinese or Mandarin as their main study without earn any formal degree. In addition

to those three types of student, there are two options status for foreign student which are

International student and Overseas Chinese Student (hereafter OCS). International student is

the student that holding foreign nationality outside Republic of China that also not holding

86 I used the term independent agent for those Indonesian people that help to promote Indonesia and Taiwan relations. For example, the Indonesian migrant workers serve as independent social agent because they promote social relations between Indonesia and Taiwan but has independent status because their movement not based on the order of the government, instead their movement and interaction influence the Indonesian government to maintain its socio-cultural relations with Taiwan.

60 any status as Mainland China student (including Hong Kong and Macau) or posses OCS status. On the other hand, Overseas Chinese Student is all ethnic Chinese students living in the foreign country outside Republic of China.

All foreign students are studying in various universities and fields all over Taiwan.

Their population in Taiwan always rise-up each year. Statistics on foreign students shows that

in the school year 2012/2013 there have been 43,957 foreign students studying in Taiwan.

They are divided into 11,554 international degree-seeking students, 13,898 Chinese

Language students, 15,204 OCS, and 3,301 exchange students. 87 Based on this proportion,

the Overseas Chinese Students take a major part population of foreign students in Taiwan,

followed by Chinese Language students, international-degree seeking students and exchange

students at the last. In terms of subject studies for international degree-seeking students,

majority is pursuing degree in science, technology, agriculture, medicine, and business

management. 88

The top five countries that have large number of foreign students in Taiwan are

Malaysia, Vietnam, Japan, the United States, and Indonesia. The details number of foreign

students from the top five countries is listed below:

Table 3-3 Statistics on Top Five Countries of Foreign Students in Taiwan School Year 2012/2013 Country International degree- OCS Chinese Language Exchange Grand seeking Students Students Student Total Malaysia 2,280 4,616 442 236 7,574 Vietnam 2,379 156 1,327 39 3,901 US 423 237 2,218 412 3,290 Japan 518 156 2,579 343 3,596 Indonesia 1,055 800 868 - 2,723 Source: Statistical Summaries

87 Data are collected from Statistical Summaries provided by the Ministry of Education, ROC, Taiwan < http://english.moe.gov.tw/ct.asp?xItem=14481&ctNode=11429&mp=1 > 88 Ibid

The table above shows that during the school year 2012/2013, Malaysia is the first

country that has biggest population of foreign students in Taiwan. It followed by Vietnam,

Japan, the U.S., and Indonesia. Malaysia contribute the first largest of Overseas Chinese

Students in Taiwan, meanwhile Vietnam take a part as the majority of international degree-

seeking students. Japan shared the biggest population of students in pursuing Chinese

language, while the U.S has sent their massive exchange students to Taiwan. Indonesia is in

the middle position that has average number of international degree-seeking students, OCS

and Chinese language students. Even though Indonesia took an average part on the statistics

of foreign students, its student interactions and activities in Taiwan are quite intense that

eventually gives spill-over effect to the official governmental relations.

III.4. Indonesian Students in Taiwan

Due to Indonesia’s limited interactions with Taiwan before the year of 1990s, it is

difficult to track the first existence of Indonesian students in Taiwan. Information gathered

from the alumni said that during the year of 1960s there has been several Indonesian students

came to Taiwan for study. 89 They were all Overseas Chinese Students (OCS) that pursued

degree level or Chinese language in Taiwan. However, as followed by the improvement of

government relations, the record of Indonesia students that came to Taiwan being more

manageable. During the school year 1986/1987, there were 259 Indonesian students in

Taiwan which holding the status as Overseas Chinese Students.

Since then, statistics on Indonesian students fluctuated between two-hundred up to

two-hundred-fifty students from 1986 until 1993. Afterwards the number of Indonesian

students improved 50% from 249 students in 1993 jumped into 368 students in 1994. 90 After

1994, the statistics showed an improvement each year that finally reached total number of

89 Interview with the President of Indonesian Federation of Taiwan Alumni Association (ICATI in Bahasa) on Thursday, April 4 th , 2013 90 Data are collected from Statistical Summaries provided by the Ministry of Education, ROC, Taiwan < http://english.moe.gov.tw/ct.asp?xItem=14481&ctNode=11429&mp=1 >

62 more than one-thousand Indonesian students on the school year 1999/2000. Details on statistics of Indonesian students in Taiwan described from the table below:

Table 3-4 Statistics on Indonesian Students in Taiwan School Year 1986-2012 School Year Total Students (person) 1986/1987 259 1987/1988 291 1988/1989 217 1989/1990 214 1990/1991 211 1991/1992 208 1992/1993 245 1993/1994 249 1994/1995 368 1995/1996 335 1996/1997 380 1997/1998 382 1998/1999 579 1999/2000 1,685 2000/2001 2,174 2001/2002 1,158 2002/2003 961 2003/2004 1,002 2004/2005 1,391 2005/2006 1,394 2006/2007 1,555 2007/2008 1,658 2008/2009 2,881 2009/2010 2,277 2010/2011 2,274 2011/2012 2,472 2012/2013 2,723 Grand Total 29,543 Source: Data are collected from Statistical Summaries provided by the Ministry of Education, ROC, Taiwan < http://english.moe.gov.tw/ct.asp?xItem=14481&ctNode=11429&mp=1 >

Statistics shows that started from school year 1999/2000, total number of Indonesian

students studying in Taiwan grew up two-times from only 579 students jumped into 1,685

students. There were two reasonable reasons to explain the improvement. First during the

year of 1999, there was a political turmoil in Indonesia that attacked ethnic Chinese as the

scapegoat of the political incident. To save themselves, many ethnic Chinese together with

their family flew away from Indonesia to other designated countries such Singapore and

Taiwan. They resided in other countries for several years and also sent their children to the university or school where they currently lived in. Thus this situation cause the statistics of

Indonesian students increased double. Second, it was also for the first time, the local

Indonesian students pursued their study in Taiwan, thus contributed to the statistics’ escalation.

Indonesian student in Taiwan has two main statuses: international student and

Overseas Chinese Student. International student refers to those local Indonesian citizen that

pursuing degree (mostly master or doctoral degree), exchange, or Chinese language student in

Taiwan. Meanwhile, Indonesian Overseas Chinese Student identifies as Indonesian ethnic

Chinese student that also pursuing degree (mostly bachelor degree), exchange, or Chinese

language student. Indonesian ethnic Chinese students always take part as the majority

population of Indonesian students in Taiwan. However, started from the school year

2011/2012, the number of Indonesian local students pursued degree in Taiwan exceeding the

number of Indonesian Overseas Chinese Students. 91

Indonesian students that are seeking degree level in Taiwan mostly study on the field of business management and construction and engineering. Statistics on the school year

2012/2013 there are 253 Indonesian students studying Business and Administration and 383

Indonesian students studying engineering. 92 The rest are studying other field of study such natural and marine sciences, education, arts, humanity, social science, medical science and etc. Besides seeking degree, a lot of Indonesian students come to Taiwan for learning

91 On the school year 2011/2012 the number of Indonesian students seeking degree was 913 students while the number of Indonesian Overseas Chinese Students was 764 students. Details statistics please refer to Statistical Summaries provided by the Ministry of Education, ROC, Taiwan < http://english.moe.gov.tw/ct.asp?xItem=14481&ctNode=11429&mp=1 > 92 Details statistics please refer to Statistical Summaries provided by the Ministry of Education, ROC, Taiwan < http://english.moe.gov.tw/ct.asp?xItem=14481&ctNode=11429&mp=1 >

Mandarin. On the school year of 2012/2013 there are 868 Indonesian students learning

Mandarin 93 . The number of students learning Mandarin always increases each year.

Indonesian students in Taiwan act as an independent cultural agents for Indonesia because they promote Indonesian cultural to the Taiwanese society in particular and international society in general. Every year Indonesian students in Taiwan held Indonesian

Cultural Exhibition or Festival to introduce Indonesian culture to Taiwanese society in particular students and professors. Indonesian students in NTUST have been conducted

Indonesian Cultural Exhibition since 2006, meanwhile Indonesian students in NPUST have been held Indonesian Festival since 2012. These events fully supported by Indonesia

Economic and Trade Office (IETO) in Taipei and Presidents from each university. These events always attract many visitors both Taiwanese and other international students. On the festival or exhibition there will be dance, sing and drama performance carried by Indonesian students.

Indonesian students not only promote Indonesian culture to the outsiders but also learn Taiwanese culture when they study in Taiwan. Taiwan University that has Chinese

Language Center provide free Mandarin courses for international students, thus they can learn Mandarin for their basic needs. Moreover, on the Mandarin class, the language center will also offers some Taiwanese culture learning such making Chinese tea or knots and the introduction to the Taiwanese society beliefs and culture. This process of interaction and learning will produce cultural mutual understanding between Indonesian students and

Taiwanese society. Therefore in the future, when those Indonesian students return back to

Indonesia they will introduce and promote Taiwan to other Indonesian society. From this way, the ideas of Indonesian students as cultural agents for both Taiwan and Indonesia will work effectively.

93 Ibid.

III.5. Socio and Cultural Exchanges between Indonesia and Taiwan

The existence of Indonesian students in Taiwan also gives domino-effect to the governmental cooperation on the field of education and cultural exchanges. As the interactions and statistics on Indonesian students in Taiwan improve each year, it also effect governmental relations between the two countries. Under the absence of diplomatic relations,

Indonesian and Taiwan succeeds signed and implemented several agreements on education and cultural exchanges. The path to reach agreements on cooperation was lead by the existence of Indonesian students that have been come and study in Taiwan since the year of

1960s. Educational and cultural exchanges between Taiwan and Indonesia lied within three main fields, scholarship mechanism, education fairs and summit, and academic dialogue and joint research.

The first field of educational exchanges between Indonesia and Taiwan found within government and university scholarship mechanism. Taiwan government provides scholarship under Ministry of Education (hereafter MOE) and International Cooperation of Development

Fund (ICDF). On the other hand, Indonesian government offers scholarship under Ministry of

National Education (hereafter MONE). In addition, both government also cooperate together to provide joint government scholarship. Furthermore, Taiwan University also grants scholarship for Indonesian students who wished to study in Taiwan.

Each year, the Taiwanese government through its Ministry of Education grants scholarship for Indonesian to pursue degree level and Chinese language enrichment in

Taiwan. There are two types of scholarship offered by the Ministry of Education Taiwan:

Taiwan Scholarship Program and Huayu Enrichment Scholarship. Taiwan Scholarship

Program grants 9 into 10 scholarships each year for Indonesian to pursue degree level education in Taiwan. The amount of scholarship ranges from NT$ 15,000 for undergraduate

66 program into NT$ 20,000 for post-graduate program. 94 In addition, the Ministry of Education

also grants NT$ 40,000 to each recipient for payment of tuition fees. 95 Thus every students receive a monthly stipend from NT$ 15,000 until NT$20,000 for living allowance that includes payment for housing, health insurance, books, airfare tickets and miscellaneous fees.

The period of scholarship would be depend on the degree programs, 4 years for undergraduate, 2 years for master program, and 4 years for doctoral program. Meanwhile, the

Huayu Enrichment Scholarship designs for Indonesian who wish to study Mandarin in

Chinese Language Center in Taiwan. The amount of scholarship is a monthly stipend of NT$

25,000 for one year studying Mandarin in Taiwan. 96 Each year, 4 until 5 Indonesian receive

Huayu Enrichment Scholarship Award.

Taiwan not only grants scholarship to Indonesian under the scheme of Ministry of

Education, but also under the program offer by International Cooperation Development

Program (hereafter ICDF). ICDF grants scholarship for international students including

Indonesia from various fields of study. It has cooperation with university under its

consortium that offers international bachelor, master or doctoral program. The amount of

scholarship covers monthly stipend (based on the degree-pursued), living allowance, returned

airfare tickets, tuition fees together with credit fees, insurance, books allowance and

housing. 97 In 2012, there were 2 Indonesian students awarded Taiwan ICDF scholarship.

Government scholarship not only offers by the Taiwanese government but also grants

by the Indonesian government. The Ministry of National Education Indonesia grants

scholarship for Indonesian lecturer who wished to pursue master and/or doctoral degree

abroad including Taiwan. The scholarship covers a monthly stipend from USD 500 – USD

94 2013 Taiwan Scholarship Program, Taipei Economic and Trade Office, Jakarta, < http://www.roc- taiwan.org/ID/ct.asp?xItem=352913&ctNode=11022&mp=292 > accessed on March 1 st , 2013 95 Ibid. 96 Ibid. 97 Taiwan International Cooperation and Development Fund, < http://www.icdf.org.tw/mp.asp?mp=2 > accessed on March 5 th , 2013

750 and payment for tuition fees. The scholarship last for two years of master degree and three years of doctoral degree. In 2011, Indonesia sent 23 of their best students to study in

Taiwan under Indonesia Ministry of National Education’s scholarship. 98 Thus, Indonesia also endorses Indonesian students to pursue degree in Taiwan though lacking of official diplomatic relations.

Furthermore, both governments also cooperates each other to provide degree level

scholarship for Indonesian lecturer. In 2011, Indonesia Minister of National Education met

with Taiwan Minister of Education in Bali to further discuss higher educational cooperation

and exchanges between Indonesia and Taiwan. Both governments reached an agreement that

annually Indonesia will send its university lecturer to further study in master or doctoral

degree in Taiwan. 99 Moreover, the agreement also aims to facilitate and to encourage

exchange program between higher education institutions, exchange students for research, and

joint research and international publication. 100 Thus, Indonesia and Taiwan not only works on providing scholarship but also on the efforts to strengthen educational exchanges.

As a commitment to implement the MOU, Indonesian government works with the

Taiwanese government to provide the scholarship under the scheme of “DIKTI3+1

Scholarship” for doctoral degree. The Indonesian government will provide three years of scholarship while the Taiwanese government will add one more year of research scholarship.

In addition to the scholarship, the scholarship candidate will have an opportunity to attend pre-study program which they will come to Taiwan for three-months of “bridging program” before they decided to enter the university. 101 The scholarship candidates will have more

opportunity to learn the educational system in Taiwan and to get Mandarin’s enrichment

98 Information collected from the students that gained scholarship under Indonesia MONE’s scholarship 99 Memorandum of Understanding between the Indonesian Economic and Trade Office to Taipei and the Taipei Economic and Trade Office, Indonesia on Cooperation in the Field of Higher Education, details memorandum will be attach on the appendixes lists 100 Ibid. 101 Interviews, done on March 20 th , 2013 with the Director of Elite Study in Taiwan (ESIT) Program Office in Chungli

68 before they agreed to pursue doctoral degree in Taiwan. Based on the agreement, annually

Indonesia will send 100 scholarship candidates to Taiwan. Thus in the future, this scholarship program can also enhance the socio-cultural relations between Indonesia and Taiwan.

Another governmental cooperation scholarship is Aceh Government Scholarship.

Tsunami that attacked Aceh in 2004 caused the loss of thousands university personnel, university professors, medical professionals and government employees. 102 Thus to re-build the human resources in Aceh, the Taiwanese government worked together with Aceh government to give fund assistances to Aceh students to study in Taiwan both for master and/or doctoral program. Taiwan Ministry of Education gave their authority to Elite Study in

Taiwan (hereafter ESIT) to facilitate the implementation of the agreement. The scholarship covers monthly stipend, international airfare tickets, student health insurance, housing, book allowance and tuition fees. Currently there are already 70 students and 7 doctors whom have come to Taiwan for training. 103

In addition to the government scholarship, Taiwan also offers various university scholarships for Indonesian students. The amount of scholarship is varied depend on the university regulations. In general the university will give free tuition waiver and monthly allowance roughly from TWD 6,000 until TWD 15,000. University such National Taiwan

University of Science and Technology, National Chiao-Tung University, National Cheng-

Kung University, Asia University, National Chung-Yuang Christian University and Yuan-Ze

University provides wide ranges of scholarship for International students including

Indonesian students.. 104

In sum, cooperation under scholarship divided into three main categories: government

scholarships, joint government scholarships, and university scholarships. The summary of

102 “Southeast Asian Scholarship” Elite Study in Taiwan, Program Office, , accessed on March 18 th , 2013 103 Ibid. 104 Based on my own observation that many Indonesian students studying at those universities got financial aids on the behalf of university scholarship

69 amount of scholarship, target recipients, duration of awards and partner institutions are presents follow:

Table 3-5 Scholarship Scheme for Indonesian Students in Taiwan Type of Benefits of Target of Duration of Award Partner Scholarship Scholarship Recipients Institution Government Scholarship Taiwan • Monthly Indonesian students • Undergraduate All University Government stipend who wished to program for in Taiwan Scholarship Undergraduate pursue degree level four-years NT$ 15,000; in Taiwan • Master • Monthly program for stipend Post- two-years Graduate NT$ • Doctoral 20,000 program for • Tuition fees four years waiver NT$ 40,000 Huayu Monthly stipend NT$ Indonesian students One-year of All university Enrichment 25,000 who wished to scholarship in Taiwan that Program study Chinese for has Chinese one year in Taiwan Language Center International monthly stipend Indonesian students • Undergraduate All university Cooperation (based on the degree- who wished to program for under ICDF Development pursued), living pursue degree level four-years consortium Funds (ICDF) allowance, returned in Taiwan • Master that offers airfare tickets, tuition program for International fees together with two-years program credit fees, insurance, • Doctoral books allowance and program for housing four years Indonesia, • Monthly Indonesian lecturer • Master All university MONE-Dikti stipend USD who wished to earn program for in Taiwan Scholarship 500-700 master or doctoral two-years (Beasiswa • Tuition fees degree in Taiwan • Doctoral Unggulan Dikti ) waiver program for three-years Joint Government Scholarship DIKTI3+1 tuition and Indonesian lecturer Doctoral program of 4 ESIT and all Scholarship miscellaneous fees, who wished to earn years scholarship university living allowance doctoral degree in under ESIT (house & utilities fees, Taiwan consortium living allowance, insurance, and book allowance), settle allowance, returning airfares to Taiwan, and fees for attending conferences Aceh international airfare, Indonesian students • Master ESIT and all Government tuition/misc. fees, from Aceh that program for university

Scholarship living allowance, wished to study two-years under ESIT insurance, house & master or doctoral • Doctoral consortium utilities fees, and book program in Taiwan program for allowance four-years University Scholarship University Tuition fees waiver Indonesian students • Master All University Scholarship and monthly stipend at his/her own program for in Taiwan roughly NT$ 6000 – University in two-years NT$ 15,000 Taiwan that wished • Doctoral to earn master or program for doctoral program four years (based on University regulations) Source: from the Author

Besides offering scholarship for Indonesian students, both countries also work

together to held education fairs and university visit. On the context of education fairs, it has

been three-times Taiwan held Taiwan Higher Education Fair in Indonesia. Meanwhile during

2012, there have been three universities that made educational visit to Indonesia. Both

activities have been conducted since 2010 to promote educational and cultural exchanges

between Indonesia and Taiwan.

The first Taiwan Higher Education Fair was held from October 7 th – 14 th , 2010 in

Aceh, Yogyakarta and Jakarta. The main aim of this activity was to strengthen the

educational and cultural exchanges between Indonesia and Taiwan and to attract Indonesian

students to study in Taiwan. 105 The first Taiwan Higher Education Fair was organized by

ESIT which commissioned by the Ministry of Education Taiwan. There were 34 prominent

Taiwan universities including six international academic exchange organizations participated on the exhibitions. 106 This was for the first time Taiwan held a direct open recruitment for

university admission.

The second Taiwan Higher Education Fair took place from September 29 th until

October 7 th , 2011 in Aceh, Yogyakarta and Surabaya. This event was organized by ESIT and

105 “ Taiwan Higher Education Fair (THE) Fair, Indonesia 2010 --- 34 Prominent Taiwan Universities to Attend”, Taipei Economic and Trade Office, Jakarta, Indonesia < http://www.roc- taiwan.org/ID/ct.asp?xItem=162258&ctNode=4827&mp=292 > accessed on April 5 th , 2013 106 Ibid.

Taiwan Education Center (hereafter TEC) to facilitate Indonesian students with information of scholarship and university admission procedure. There were 27 prominent universities in

Taiwan and various international academic exchange institutions under Academia Sinica gathered in this exhibition. 107 Head Representative from TETO, ESIT and TEC also

participated on this event.

The third Taiwan Higher Education Fair held from October 20 th – 25 th , 2012 in

Surabaya and Jakarta. Similar with the last two years event, it also organized by ESIT and

TEC together with National Taiwan University of Science and Technology. There were

severa Taiwan universities and representative from Chinese Overseas Compatriot Student

Admission Affairs participated in this event. The event takes place annually which always

attracts around 1000 visitors to join the event. It means that there is a high demands and

curiosity from Indonesian students to get to know more about education system in Taiwan.

In addition to the Taiwan Higher Education Fair, both countries also work to hold the

first Taiwan-Indonesia Higher Education Summit. This event took place from April 16 th and

17 th , 2012 at the National Taiwan University of Science and Technology (hereafter NTUST) in Taipei. This event was part of the dissemination from the MOU that signed between

Taiwan MOE and Indonesia MONE in Bali, May 2011. Representative from Taiwan MOE,

Indonesia MONE, IETO, and university lecturers both from Indonesia and Taiwan gathered on this summit. The forum was filled by plenary session with various topics such as international cooperation in higher and technological operation, university-industry cooperation policies and experiences in Taiwan and Indonesia, building a Taiwan-Indonesia higher and technological education network, arts and education.108

107 “Pameran Perguruan Tinggi Taiwan di Indonesia 2011”, Taipei Economic and Trade Office, Jakarta, Indonesia < http://www.roc-taiwan.org/ID/fp.asp?xItem=223077&ctNode=9321&mp=292 > accessed on April 5th , 2013 108 Marlistya Citraningrum, “The 1 st Taiwan-Indonesia Higher Education Summit” < http://luar- negeri.kompasiana.com/2012/04/16/the-1st-taiwan-indonesia-higher-education-summit-455389.html > accessed on May 5 th , 2013

Efforts to strengthen the cultural and educational cooperation not only endorse by the two governments but also support by Taiwan and Indonesia universities. Throughout 2012, there were three Taiwan prominent universities made an educational visits and exchanges to some universities in Indonesia. Those three universities are National Chiao-Tung University

(hereafter NCTU), National Cheng-Kung University (hereafter NCKU) and NTUST. These universities are known as popular university’s destination for Indonesian students. 109 NCTU visited some universities such Bandung Institute of Technology (ITB), Gajah Mada

University (UGM), University of Airlangga (Unair) and Institute Technology Sebelas Maret

(ITS). 110 Meanwhile, NCKU visited University of Airlangga to strengthen bilateral exchange and cooperation between the two universities. 111 On the other hand, NTUST held an introduction and interview session at ITS, Surabaya on June 2012 112 to recruit new

Indonesian students that willing to study in NTUST.

Indonesia and Taiwan educational exchanges also endorse from the joint research and dialogue organized by government research institution and/or non-governmental organizations. In 2011, Center of Political Studies (P2P) Lembaga Ilmu Pengetahuan

Indonesia (hereafter LIPI) in collaboration with Chung-Hua Institution for Economic

Research –Taiwan ASEAN Research Center (hereafter CIER-TASC) held a Joint Workshop on December 2011. This Joint Workshop aimed to disseminate the joint research done by

P2P LIPI and CIER-TASC about the Dynamics and Current Status of Indonesia-Taiwan

Relations. 113 The research covers the economic aspects between Indonesia and Taiwan and

109 NCKU and NCTU have around 30 until 50 Indonesian students while NTUST has approximately 240 Indonesian students 110 “NCTU Visitation to Major Universities in Indonesia” Taiwan Education Center Indonesia accessed on April 5 th , 2013 111 “NCKU Visitation to Airlangga University”, Taiwan Education Center Indonesia accessed on April 5 th , 2013 112 “Meet Taiwan NTUST and Find Your Overseas Study Opportunities”, International Office Institute Teknologi Sepuluh September < http://io.its.ac.id/meet-taiwan-ntust-and-find-your-overseas-study- opportunities/ > accessed on April 5 th , 2013 113 “Joint Workshop P2P LIPI and CIER TASC “The Dynamics and Current Status of Indonesia-Taiwan Relations < http://www.politik.lipi.go.id/index.php/in/kegiatan/580-joint-workshop-p2p-lipi-and-cier-tasc-the-

73 also the people-to-people aspect within the two countries. LIPI proposed several recommendations on the area of investment, agricultural, forestry and fishing, business, industry, capacity building of human resources, and the role of Second-Track Diplomacy to enhance Taiwan and Indonesia relations. 114 Joint research between P2P LIPI and CIER-

TASC continued in 2012 when both institutions published their joint research about

Feasibility Study of Economic Cooperation Arrangement between Indonesia and Taiwan.

The feasibility study covers two main aspects: “the potential impacts of ECA on bilateral trade between Indonesia and Taiwan, and the potential regulatory cooperation under ECA scheme between the two economic entities”. 115

Besides conducting joint research, the efforts to strengthen socio and cultural exchanges endorse from the annual dialogue between Indonesia and Taiwan. Indonesia’s non-governmental organization (NGO), The Habibie Center together with Taipei Economic and Trade Office in Jakarta have been regularly organized Taiwan-Indonesia Dialogue every two years since 2007. The last dialogue took place in Taipei on September 2011. “The dialogue was aimed at: providing a forum for sharing and exchanging ideas and experiences; to improve the quality of bilateral relations and intensify regional ties; and to define strategic cooperation to improve the quality of life for the society of both nations. 116 ” The dialogue invited various participants from public officials, NGO, media, and academician. Wide- ranging of issues such economic, socio-cultural relations, developments, opportunity and challenges included during the dialogue. This dialogue can improve the mutual understanding

dynamics-and-current-status-of-indonesia-taiwan-relations > Pusat Penelitian Politik LIPI, accessed on April 5 th , 2013 114 Center for Political Studies (P2P) LIPI, “Policy Paper: The Dynamic and Current Status of Indonesia-Taiwan Relations” Jakarta, 2011, pp. 7 115 Center for Political Studies (P2P) LIPI, “Policy Paper: Feasibility Study of Economic Cooperation Arrangement Between Indonesia-Taiwan” Jakarta, 2012, pp. 1 116 “Indonesia-Taiwan Dialogue 2012, Taipei, Taiwan, the Habibie Center accessed on April 6 th , 2013

74 between Indonesia and Taiwan in various fields, thus enhance the dynamics relations among them.

In sum, the socio and cultural ties between Indonesia and Taiwan improve after 1990s.

Socio and cultural relations between them lead by the existence of Indonesian migrant workers and Indonesian students in Taiwan. Indonesian migrant workers serve as a social agent that creates a path to further strengthen society and governmental relations based on the issue of people migration. Indonesian students act as a cultural agent that contributes to a mutual understanding process between both society and government. These two types of actor also work to connect both Indonesia and Taiwan governments under the adherence of one-China Policy by the Indonesian government.

Chapter IV

People’ Ideas, Institutions, and Interests within Indonesia and Taiwan Relations

This chapter focuses on the independent variable of this thesis which is the Indonesian people as promoter of ideas leads the interactions with Taiwan. The aim of this chapter is to analyze share ideas of Indonesian people that led them to interact with Taiwan which, at the end influence state-to-state relations. The terms ideas is related to the underlying reasons that influence Indonesian business people, Indonesian migrant workers and Indonesian students to enter Taiwan on the behalf of their own purposes. Indonesia and Taiwan do not have official diplomatic relations, however, people keep their ideas to study, work or run business in

Taiwan. Thus, it is importance to address the underlying reasons that caused Indonesian people come to Taiwan rather than other countries. Furthermore, these ideas also contribute to making up institutions and constitute interests between Indonesia and Taiwan.

In order to analyze about ideas, institutions and interests within Indonesia and Taiwan relations, this chapter will be divided into three parts. First, is about the framework of ideas that influence people’s decision. This framework will be divided into three main categories: environmental framework, economic framework, and cultural framework. Second parts concern on the making up institutions due to the shared ideas of the people. Third parts talk about the resulted interests from the process of distribution of ideas and making up institutions.

1. Framework of Ideas

There are a lot of factors that endorse Indonesian students, Indonesian migrant workers, and Indonesian businessman. To explain factors related to the people’s migration, this thesis conduct interviews with three different kinds of people. First, representative of

Indonesian businessmen who is being in charge as the head of Indonesian Employers

Associations Store in Taiwan or Asosiasi Pengusaha Toko Indonesia di Taiwan (hereafter

APIT) and representative of Indonesian Federation of Taiwan Alumni Associations or Ikatan

Citra Alumni Taiwan Seindonesia (hereafter ICATI). Second is the representative of

Indonesian migrant workers in Taiwan, represented by the head of Indonesian Migrant

Workers Association in Taiwan or Ikatan Pekerja Indonesia Taiwan (hereafter IPIT). The last is representative of Indonesian students in Taiwan, represented by the head of Indonesian

Student Association in Taiwan or Perhimpunan Pelajar Indonesia di Taiwan (hereafter PPI

Taiwan). In addition, the interview was also conducted to some government officials that are relevant to the case studies.

Based on the results of interview, there are three main frameworks to explain the

underlying reasons that influence student, migrant worker, and businessman choose Taiwan

as their destination for study, work and run business. First is environmental framework which

relates to the domestic and external situations that endorse people move to Taiwan. Second,

economic framework relates to economic consideration of the people. Third is cultural

framework that associate with cultural aspects that both develop in Taiwan and Indonesia.

1.1. Environmental Framework

Environmental framework relates to the domestic and external factors that endorse

people move to Taiwan on the purpose of studying, working or doing business. Domestic

factor is internal conditions within the state that force people to seek working, studying or

business’ opportunity overseas. Meanwhile, external factor is certain conditions in the host

country that attract people to look for better prospect abroad. This factor associated with the

comparative advantage that is earned by the designated country compare to others.

Indonesian businessmen, Indonesian migrant workers and Indonesian students go for Taiwan

due to domestic and external factors that stem within environmental framework.

In term of Indonesian businessmen, there are two kinds of business activities

conducted by the Indonesian when dealing with Taiwan: reside and run business in Taiwan

and/or run company in Indonesia that work together with Taiwanese Business people ( 台商) especially in the investment sector. The first type of business activity is open and run business in Taiwan. On this type of business activity, businessmen opened Indonesian store in Taiwan that sell Indonesian products such foods, daily products (shampoo, soap, etc), music and magazine in Indonesian language and money remittance services. There are a huge number of Indonesian stores that established in Taiwan, starting from the north into the south.

The total number of Indonesian stores approximately three-hundred stores 117 . The first

Indonesian store was established in Taoyuan which later on, develop into other areas 118 .

Those Indonesian people who run Indonesian store in Taiwan collaborated with

Taiwanese partners. The main intention to open Indonesian store is to fulfill the needs of

Indonesian people especially migrant workers and students about the products from their

homeland. Thus, for those who are living in Taiwan within a long period of time still able

enjoying Indonesian products, magazines, music and delicacies which make them

comfortable while working or studying in Taiwan. Moreover, the stores also provide money

remittance services for Indonesian migrant workers that would like to send salary to their

family in Indonesia. Due to the absence of Indonesian banking services in Taiwan,

Indonesian migrant workers should send their salary through money remittance services

provided by Indonesian store.

Domestic and external factors influence these business people to open their business

activity in Taiwan. Domestic factor relates to unfriendly experience toward Indonesian ethnic

Chinese in Indonesia. The owners of Indonesian stores are mostly Indonesian ethnic Chinese

117 Interviews, done on March 18 th , 2013 with the Head of Asosiasi Pengusaha Toko Indonesia di Taiwan (APIT) in Taipei 118 Ibid.

78 whose previously were studying in Taiwan or foreign spouse from Indonesia. The Indonesian ethnic Chinese are widely known working on the business sectors either in Indonesia or overseas due to frosty socio-political conditions in Indonesia that do not provide friendly environment for ethnic Chinese to works on other sectors besides business. 119 Thus, this

frosty domestic condition forces Indonesian businessmen to gain business opportunity abroad.

External factors associated with the conditions in Taiwan that has a huge population

of Indonesian. The existence of Indonesian migrant workers and students in Taiwan create

business opportunity to open Indonesian store in order to fulfill the needs of Indonesian

people over products from their home country and money remittance services. The enormous

number of Indonesian in Taiwan not only gives advantages for Taiwan’s society development

but also for Indonesian in terms of business prospect overseas. In sum, environmental

framework that consists of internal and external factors explains the underlying reasons for

Indonesian businessmen to run their business in Taiwan.

As mentioned before, there are two types of Indonesian businessmen’s activities when

dealing with Taiwan. On this second category, Indonesian businessmen which mainly are

Indonesian Chinese descent run business or factory in Indonesia that also cooperates with

Taiwan Business People. These Indonesian businessmen also share similar characteristics

with the first category of Indonesian businessmen, previously they were studying in Taiwan

then graduated and started business activity in Indonesia. Their business activities include

banking services, manufacture industry, automotive, business property and etc.

Environmental framework on the context of domestic factor also influences people in this

category to run business with Taiwan.

119 After the Abortive Coup in Indonesia on September 1965, Indonesia suspended its diplomatic relations with PRC. The frozen relations also followed by the racial treatment against the ethnic Chinese. These racial treatments reached a peak on the political turmoil occurred in May 1998. Racial treatments against the ethnic Chinese include the ban of ethnic Chinese into the political activities or gather into governmental institution’s work. Hence these conditions forced them to focus on business and economic activities. Further information please refer to Dr. Ir. Justian Suhandinata, SE, Indonesian Chinese Descent in Indonesia’s Economy and Political Stability (Jakarta: PT Gramedia Pustaka Utama, 2009 )

The second category of Indonesian businessmen shared similar domestic factors with

the former one, especially on the reason of unfriendly socio-political conditions in Indonesia

toward ethnic Chinese that force them to work only on business sectors. These Indonesian

ethnic Chinese studied in Taiwan during the 1960s. Once they returned to Indonesia, the

country was still under New Order Regime which restricts the working opportunity for this

category of people. Thus, they prefer to conduct business activity particularly with Taiwan

because they already familiar with Taiwan. However, this category of people does not share

the external factors that endorse them to work with Taiwan business people.

On the context of Indonesian migrant workers, domestic and external factors also

inspire their decision to choose Taiwan as one of favorite destination for working overseas.

There are two domestic factors that endorse Indonesian migrant workers willing to work in

Taiwan. First, those migrant workers are looking for working experiences overseas. 120 They

are still young around the age of 20 until 35 years old thus they want to gain more working

experiences and opportunities abroad. Second, low-degree of education caused them to work

overseas as domestic helpers because this job does not need any specific degree of

education. 121 Indonesian migrant workers in Taiwan mostly only graduated from elementary

or junior high school, thus, make them difficult to find proper jobs in Indonesia. Moreover,

they also lack of several job skills that caused difficulties to earn better living. Therefore, in

order to preserve their life, these workers decided to work overseas as care-taker or house-

maid which do not need any specific skills or education yet still get better salary compared to

other Indonesian that also working as domestic helper in Indonesia.

On the other side, the external factor relates to the faster working placement

procedure in Taiwan. Job placement process in Taiwan is faster compared to other countries

such as South Korea or Japan. To go to Taiwan, Indonesian migrant workers spend only 3

120 Interviews, done on March 14 th , 2013 with the Head of Ikatan Pekerja Indonesia Taiwan (IPIT) in Taipei 121 Interviews, done on March 14 th , 2013 with the Head of Labor Department, Indonesian Economic and Trade Office (IETO) in Taipei

80 until 6 months for the preparation and placement of job applications. 122 In the meantime, the

job placement process to South Korea or Japan takes around 2 until 3 years, 123 which is longer than Taiwan. This short working process is one of Taiwan’s comparative advantages compared to other countries. In sum, there are two domestic factors and one external factor that encourage Indonesian migrant workers look for Taiwan on the purpose of working.

On the context of Indonesian students, there is one domestic factor and four external factors that explain the underlying reasons for students to choose Taiwan as a country destination for study. Domestic factor concerns toward the demands to transform university structure in Indonesia. In the future Indonesia will transform structure of the university which will increase the number of the academician who has doctoral degree and the number of professor to teach in the university. 124 To reach that goal, some universities in Indonesian send their lecturer to Taiwan to earn doctoral degree with reasonable costs yet good quality of education.

Meanwhile from the external factors point of view, Taiwan has several comparative advantages that win the heart of Indonesian student to study in Taiwan. First, Taiwan’s growing economy in the region will place this country as an important actor in the future.

Taiwan’s growing economy and influence in the future, however, not necessarily make discourse about Taiwan widely-known by the academic community in the region, especially in Indonesia. Thus, there is a need from the Indonesian students to study in Taiwan in order to have better understanding about Taiwan 125 . This mutual understanding will be beneficial in

the future when Indonesia have to deal with Taiwan in some issues.

122 Interviews, done on March 14 th , 2013 with the Head of Ikatan Pekerja Indonesia Taiwan (IPIT) in Taipei 123 Interviews, done on March 14 th , 2013 with the Head of Ikatan Pekerja Indonesia Taiwan (IPIT) in Taipei. In addition, I also got this information from my discussion with one of the Indonesian migrant workers that sit next to me during my flights from Taipei to Jakarta, Indonesia 124 Interviews, done on March 20 th , 2013 with the Director of Elite Study in Taiwan (ESIT) Program Office in Chungli 125 Interviews, done on March 17 th , 2013 with the Head of Perhimpunan Pelajar Indonesia di Taiwan (PPI Taiwan) in Taipei

Second, Taiwan provides international environment for students that make them comfortable while living and studying in Taiwan. 126 Even though Taiwan is Mandarin speaking country but it offers many English-taught programs that enable the student to study in English while in the same time improving their Mandarin for daily life. If compared to

Mainland China or Japan, both two countries require the students to take 1 until 2 years of language preparation before entering the university. Thus, if students want to study Master’s program, they have to spend 3 until 4 years together with the language preparation program.

Indeed, even though Mainland China offers English-taught program, some of the literatures are still in the original language of Mandarin characters. 127 Unlike China, Taiwan does not

require the international students to take Mandarin preparation program; it is required only

when the students attend the Mandarin teaching program.

Third, Taiwan has good quality of research equipment and professor. 128 As a

developed country in the Asia region, Taiwan is able to support the research activity of the

students by providing modern and high-tech research equipment. In addition, Taiwan’s

professors were graduated from Japan or the U.S., thus the quality of teaching also

comparable to other developed countries in the Asia region. The last external factors concern

about the education system in Taiwan that share similar characteristics with the US 129 thus the students do not necessarily go to U.S., in order to get comparable quality education.

In sum, environmental framework that consists of domestic and external factors explain the underlying reasons that encourage businessmen, migrant workers and students to enter Taiwan on behalf of their purposes. Domestic factors are the dominant reasons for

Indonesian migrant workers to work overseas, whereas external factors give more

126 Ibid. 127 Ibid. 128 Interviews, done on March 20 th , 2013 with the Director of Elite Study in Taiwan (ESIT) Program Office in Chungli 129 Interviews, done on March 17 th , 2013 with the Head of Perhimpunan Pelajar Indonesia di Taiwan (PPI Taiwan) in Taipei and Interviews, done on March 20 th , 2013 with the Director of Elite Study in Taiwan (ESIT) Program Office in Chungli

82 contributions toward Indonesian students’ decision to study abroad. The summary of environmental framework shows below:

Table 4-1 Summary of Environmental Framework Environmental Framework Category of People Domestic Factor External Factor Indonesian businessmen (run Unfriendly experience of Huge population of business in Taiwan) socio-political conditions in Indonesian in Taiwan Indonesia toward ethnic Chinese Indonesian businessmen Unfriendly experience of (doing business with Taiwan) socio-political conditions in ---- Indonesia toward ethnic Chinese Indonesian migrant workers 1. Wants to gain working Faster working placement experiences overseas procedure and process in 2. Low degree of education Taiwan and skills Indonesian students Demands to transform the 1. Taiwan will be an structure of the university in important country in the Indonesia future 2. Taiwan offers international environment for study 3. Taiwan has good quality of research equipments and professors 4. Taiwan share similar education system like in the U.S. Source: From the Author

1.2. Economic Framework

Economic framework relates to economic reasons that endorse people seeking opportunity abroad for business, working and studying. This framework focuses on maximum economic benefits that people could earn if they go to Taiwan rather than to other countries. Three categories of people consider economic framework as one of the important pushing factors that stimulate their willingness to look for better opportunity in Taiwan.

Indonesian businessmen, who are doing business in Taiwan, said that there is business opportunity in Taiwan due to a lot of Indonesian living in Taiwan. 130 Ideas to open

Indonesian store in Taiwan due to lack of Indonesian store before 2000 131 . Every time

Indonesian people want to buy Indonesian products they had to go to Taoyuan because there

was only one Indonesian store in Taoyuan. Massive population of Indonesian in Taiwan

made the store always crowded every weekend. This situation create uncomfortable situation

because people had to jostle with others in order to get Indonesian products. Therefore, there

is a high demand of Indonesian products that create business opportunity in Taiwan. Due to

the availability of business opportunity, Indonesian stores were flourished after 2000. The

new Indonesian store was established in Taipei in 2001, which later on developed into other

areas in Taiwan. 132

The second economic reasons concern over the number of capital to run business in

Taiwan. In order to run business in Taiwan, the businessmen do not need to prepare big amount of capital. Approximately, they have to provide NTD 500,000 as prove of investment capital. This amount is smaller compared to Hong Kong, thus for those businessmen that want to open Indonesian store with small capital, Taiwan is the best destination compared to

Hong Kong 133 . Indonesian businessmen open business in Taiwan based on the calculation of maximum economic benefit that they could earn compared to other countries that has similar characteristics with Taiwan, such as Hong Kong and South Korea. Furthermore, Indonesian businessmen that work together with Taiwanese business people also consider economic benefits as main important reasons to conduct business with Taiwan. According to them, the

130 Interviews, done on March 18 th , 2013 with the Head of Asosiasi Pengusaha Toko Indonesia di Taiwan (APIT) in Taipei 131 Ibid. 132 Ibid. 133 Ibid

84 size of Taiwanese enterprises that mostly work within Small and Medium Enterprises (SME) matches with the market and factories that owned by the Indonesian businessmen. 134

Economic framework not only influences Indonesian businessmen to conduct

business with Taiwan, but also affect the decision of Indonesian migrant workers to choose

Taiwan as a country destination for working. Based on the results of interview, there are two

main economic reasons that endorse Indonesian people to search for working opportunity in

Taiwan. First, high rate of unemployment in Indonesia create small number of working

opportunities for people who do not have proper education and skills. In 2009, the

unemployment rate was 22,2% between the age of 15-24 years old 135 . Thus this situation

forces those workers to seek job opportunity overseas.

Second, working as care-taker or domestic helper in Taiwan receive more salary

compared to other countries such Hong Kong that also employed a massive number of

Indonesian migrant workers as care-taker. Salary of being care-taker in Taiwan is NTD

15,840 or IDR 4,752,000 in Indonesian currency. 136 Meanwhile in Hong Kong domestic

helper profession receive around IDR 3,000,000 until 4,000,000 which means smaller than in

Taiwan. 137 Therefore, many Indonesian migrant workers prefer to go to Taiwan for working

instead of other countries because the salary benefit is more comparable.

Other category of people, Indonesian students also consider the maximum economic

benefit of studying in Taiwan compared to other countries such as Japan, Australia, or U.S.

According to them, there are two main economic reasons that attract the students to earn

degree in Taiwan. First, Taiwan offers many scholarships for International students

particularly Indonesian students. There are approximately 6 scholarship mechanisms

134 Interview with the President of Indonesian Federation of Taiwan Alumni Association (ICATI in Bahasa) on Thursday, April 4 th , 2013 in Jakarta 135 Central Intelligence Agency: The World Factbook: Indonesia, < https://www.cia.gov/library/publications/the- world-factbook/geos/id.html >, accessed on April 22 nd , 2013 136 Interviews, done on March 14 th , 2013 with the Head of Labor Department, Indonesian Economic and Trade Office (IETO) in Taipei 137 Ibid.

85 provided by both Taiwan and Indonesian government as well as university for Indonesian students that willing to continue their higher education in Taiwan. Moreover, the amount of scholarship consider as much compared to other countries that also offer scholarship, such as

China. 138

In addition, this sufficient amount of scholarship also complements with reasonable cost of tuition and living in Taiwan. Some Indonesian students are able to pay their own tuition and living cost due to reasonable cost of Taiwan. In addition, the inflation of tuition fees in Taiwan consider as small compared to Indonesia itself 139 . Therefore, Taiwan offers

good quality of research and professor but with reasonable cost for living and tuition fees.

These two economic reasons endorse Indonesian students to study in Taiwan instead of other

countries that also offer scholarship mechanisms. To exemplify, Indonesian students have

opportunity to apply scholarship given by Japan, U.S. or Australia, however, the cost of

living on those countries are more expensive than in Taiwan. Thus, they preferred Taiwan

where they can earn comparable quality of education but still able to have savings from

scholarship. This is one of comparative advantages from studying in Taiwan.

Overall, Economic framework that concern about the achievement of maximum

economic benefits contribute as one underlying reasons that endorse people to interact with

Taiwan. Based on the results of interview, three categories of people share two main

economic reasons as their consideration of coming to Taiwan. The summary of economic

framework shows below:

Table 4-2 Summary of Economic Framework Category of People Economic Framework Indonesian businessmen (doing business in 1. Business opportunity in Taiwan Taiwan) 2. Small amount of capital to run business Indonesian businessmen (doing business with Sizes of Taiwan’s enterprises

138 Interviews, done on March 17 th , 2013 with the Head of Perhimpunan Pelajar Indonesia di Taiwan (PPI Taiwan) in Taipei 139 Interviews, done on March 17 th , 2013 with the Head of Perhimpunan Pelajar Indonesia di Taiwan (PPI Taiwan) in Taipei

Taiwan/Taiwanese Business People) Indonesian migrant workers 1. High rate of unemployment 2. Bigger amount of salary in Taiwan Indonesian students 1. Taiwan offers sufficient amount of scholarship 2. Taiwan offers reasonable cost of tuition fees and living Source: from the Author

1.3. Cultural Framework

The last framework is cultural framework that concern about the influence of culture within people-to-people interactions. As argued by Wendt, ideas consist of private and socially share knowledge. Socially share knowledge closely related to cultural matter that influences interactions. This framework will explain the impact of culture that eventually stimulates Indonesian people to connect with Taiwan. Culture could be related to language and society’s beliefs and values.

Indonesian businessmen who are doing business in Taiwan treat Mandarin as important cultural reasons to do business in Taiwan. Taiwanese speaks Mandarin as their mother tongue thus makes communication easier. 140 Moreover, Mandarin also considers as

the second international language after English, thus more people are able to speak this

language. Mandarin is the advantage of Taiwan compared to other countries such Hong Kong

or South Korea that also have massive number of Indonesian businessmen and Indonesian

migrant workers. Hong Kong and South Korea do not treat Mandarin as their mother tongue,

thus made communication become more difficult compared to Taiwan.

Indonesian businessmen who are doing business with Taiwan also share similar point

of view about the use of Mandarin as means of communication. They argued that Taiwan as

Mandarin speaking countries provide comfortable communication tools to do business with

the Indonesian ethnic Chinese who also treat Mandarin as their mother tongue besides

140 Interviews, done on March 18 th , 2013 with the Head of Asosiasi Pengusaha Toko Indonesia di Taiwan (APIT) in Taipei

Indonesian language. 141 Thus, Mandarin is one of important cultural framework for both types of businessmen. Another cultural frameworks stem from the sense of ownership to the mother land in China. As mentioned before, Indonesian businessmen who run business with

Taiwan are mostly Indonesian ethnic Chinese. These ethnic Chinese originally come from

China (either PRC or ROC), thus they have feeling of ownership to their ancestor in China that encourage them to study in Taiwan and to do business with the Chinese people. 142

The last cultural framework relates to cultural experiences that those business people

achieved when they earned degree in Taiwan. Drawn from the previous explanations, those

Indonesian businessmen previously came to Taiwan for study about 3 until 4 years. During

this period of time, they learned business ethic and culture of Taiwanese society thus at the

end make them familiar with business ethic and culture of Taiwanese. 143 Once they graduated

from Taiwan school, they practice those business ethic and culture when they are doing

business with Taiwanese. In sum, culture in terms of language, experience and sense of

ownership toward ancestor influence Indonesian businessmen to conduct business with

Taiwan though under the absence of diplomatic relations.

Huge number of Indonesian migrant workers in Taiwan occurs due to high demands

to hire migrant workers by Taiwanese family. As mentioned on the previous chapter, Taiwan

has been transformed into ageing society when the population of elderly (people over sixty-

five-years old) reached ten-percent of total population. These elderly people find some

difficulties when they have to do their daily activities because of old-healthy conditions. Thus,

they need assistances from others to take care of their daily life. However, their children that

have an obligation to look after for them should work in the office due to the growing

economy and structural changes in the socio-culture life. Furthermore, Taiwanese family is

141 Interview with the President of Indonesian Federation of Taiwan Alumni Association (ICATI in Bahasa) on Thursday, April 4 th , 2013 142 Ibid. 143 Ibid.

88 widely-known holding the idea of filial piety toward their parents. Hence in order to fulfill the demand and conduct the idea of filial piety to their parents, the family employs care-taker particularly from Indonesia to take care the daily needs of the elderly.

Taiwanese family preferred to employ migrant workers from Indonesia to take care of their parents because Indonesian workers widely-known as a faithful and obey workers. 144

They are really tough and hard-worker when serving their Amma or Akong (term called for elderly people in Taiwanese language) compared to other female migrant workers from

Southeast Asian countries. Furthermore, these Indonesian migrant workers are able to speak

Mandarin that becomes one of valuable strength while working in Taiwan. 145 Indonesian migrant workers learn several working skills such as to take care elderly people and to speak

Mandarin, thus they can be a professional workers. Both the Indonesian government and the agents provide the language and skills training for the migrant workers.

From the above mentioned explanations, it sums up two things. First, beliefs toward cultural values of filial piety directly endorse Taiwanese family to hire care-taker in order to look after their old-parents. Second, Indonesian migrant workers who are able to speak

Mandarin also influence the decision of Taiwanese family to employ Indonesian migrant workers as care-taker. Thus, tribute to idea of filial piety and the use of Mandarin as means of communication explain the underlying cultural reasons of massive number of Indonesian working in Taiwan.

Indonesian students in Taiwan also share similar cultural point of view toward the use of Mandarin as means of communication in Taiwan. During the school year 2012/2013 there was 868 Indonesian students studied Mandarin language in Taiwan. 146 Taiwan is the

144 Interviews, done on March 14 th , 2013 with the Head of Labor Department, Indonesian Economic and Trade Office (IETO) in Taipei 145 Compared to other migrant workers such from Philippines, they are not able to speak Mandarin thus they cannot serve to be a care-taker for the elderly 146 Data are collected from Statistical Summaries provided by the Ministry of Education, ROC, Taiwan

89 alternative country to learn Mandarin besides PRC. Taiwan not only provides Mandarin living environment but also reasonable cost of living, thus attract the interest of Indonesian students to study Mandarin in Taiwan compared to PRC. Therefore, for the students, mandarin is also one of cultural framework that endorses them to study in Taiwan.

Overall, in terms of cultural framework all types of people consider Mandarin as the main cultural reasons that support Indonesian people to connect with Taiwan. Indonesian ethnic Chinese particularly, treat Mandarin is one of advantages to interact with Taiwanese business people. The summary of cultural framework shows below:

Table 1-3 Summary of Cultural Framework Category of People Cultural Framework Indonesian businessmen (doing business in Mandarin as means of communication Taiwan) Indonesian businessmen (doing business with 1. Mandarin as means of communication Taiwan) 2. Sense of ownership to the motherland in China 3. Familiar and experienced with Taiwanese culture and ethic Indonesian migrant workers 1. Beliefs of filial piety that create high demand of migrant workers 2. Mandarin as means of communication Indonesian students Taiwan offers Mandarin environment for study Source: from the Author

In sum, Indonesian businessmen, migrant workers and students come to Taiwan due to several ideas that narrow down into three main frameworks: environmental, economic, and cultural framework. These ideas or private knowledge will be very “thin” idea unless it mixes with the shared knowledge or culture 147 . Thus, Ideas combines with the influence of culture

will endorse people from one state to interact with others. These frameworks successfully

explain the underlying reasons that cause Indonesian people look for Taiwan in the purpose

of business, working and studying.

147 Alexander Wendt, Social Theory of International Politics (Cambridge: Cambridge University Press, 1999), pp. 141

2. Creation of Institutions and Norms

Drawn from the previous explanations, shared ideas either private or shared knowledge making up norms and institutions. On the first section of this chapter, it already addressed the shared ideas which done by Indonesian businessmen, migrant workers and students. This section will examine how shared ideas contribute to the creation of institutions and norms within Indonesia and Taiwan. Institutions and norms relate to the existence of association that built by those three types of people.

Therefore, this part will discuss the existence of institutions such Asosiasi Pengusaha

Toko Indonesia di Taiwan (hereafter APIT), Ikatan Citra Alumni Taiwan Seindonesia

(hereafter ICATI), Ikatan Pekerja Indonesia Taiwan (hereafter IPIT) and Perhimpunan

Pelajar Indonesia di Taiwan (hereafter PPI Taiwan). As argued by Wendt, institution exists due to share ideas of the people. Hence these institutions and norms are existed due to the consequence of private and shared knowledge or ideas. Institution plays important role in bridging the governmental relations and providing network sharing and information.

Furthermore, these institutions serve their role as independent agent either independent economic agent and/or socio-cultural independent agent. 148 They have strong strategic and

bargaining positions in terms of strengthening Indonesian and Taiwan relations particularly

on economic and socio-culture issues.

2.1. Asosiasi Pengusaha Toko Indonesia di Taiwan (APIT)

The first creation of institutions and norms is Indonesian Employers Associations

Store in Taiwan or Asosiasi Pengusaha Toko Indonesia di Taiwan (APIT). Indonesian

businessmen who are doing business in Taiwan created the institution called Asosiasi

Pengusaha Toko Indonesia di Taiwan or APIT. This association established in 2008 with the

148 I used the term independent agent for those institutions that help to promote Indonesia and Taiwan relations. The term independent agent means this institution promotes economic and socio-cultural relations between Indonesia and Taiwan but has independent status because their movement not based on the order of the government. The term will be used for those institution throughout the chapter

91 main aims to coordinate business activities among Indonesian businessmen in Taiwan. Due to a huge interactions and populations of Indonesian stores in Taiwan, it needs an association to coordinate the business activities thus will reduce the unfair business competition and stigma among the Indonesian businessmen. 149 So far APIT has 70 members that spread-out from the

north to the south of Taiwan.

The establishment of APIT also got support from the Indonesian government representative in Taipei. The Indonesian Economic and Trade Office in Taipei (hereafter

IETO) based on the request from one of the Indonesian businessmen, invited some of

Indonesian businessmen that has Indonesian store in Taiwan to create a businessmen institution or association. 150 Consequently, APIT was established in 2008 and had chosen its

Head of Association for period 2008 until 2013. The government supported and facilitated the establishment of APIT because this institution works as “social ambassadors” through its branches that set up in each city in Taiwan. The term “social ambassadors” emerged because this institution has two main programs: provide social assistances programs and passport services for the migrant workers. 151

The first program is providing social assistances to the Indonesian migrant workers

that got an accident or sick during their working time. Some of the migrant workers had

several serious illnesses such cancer or tumor; however they did not have sufficient money to

do a surgery. Other cases for example, some of Indonesian migrant workers got accidents

during their working time such finger cut-off accident but they did not have enough money

for the medication. Thus, APIT help them financially to do a surgery or medication in order

to get recovery and be able to work again. Through APIT’s branches that exist widely all

over Taiwan, they transfer the money from the head office to the branch office. Later on the

149 Interviews, done on March 18 th , 2013 with the Head of Asosiasi Pengusaha Toko Indonesia di Taiwan (APIT) in Taipei 150 Ibid. 151 Ibid.

92 branch office will give the financial aids to the victims. Due to of this activity, APIT called as

“social ambassador” that not only help the migrant workers but also reduce the burden of the

Taiwanese boss because their workers can start working normally again.

The second program is providing passport services for the Indonesian migrant workers. The migrant workers that require to extent their passport will use the passport services offered by the agent. However, the cost of passport services is too expensive around

NTD 3,000 – 5000 for those who live in Taipei and NTD 5,000 – 10,000 for those who live in Kaohsiung. 152 In fact the cost for the new passport services only NTD 750. 153 The cost becomes expensive because the migrant workers need to come back several times to the

IETO offices in Taipei for taking photo, fingerprint process, and interview. Therefore for those who live in Kaohsiung the cost will be double than in Taipei. In order to reduce the cost of passport services, APIT works together with the IETO provide passport services program with reasonable prices for the migrant workers. 154 Hence, those migrant workers that require to extent their passport only need to go to APIT branch offices and give the mandate of passport to APIT. On this case, APIT also works as “social ambassadors” both for the

Indonesian government and migrant workers.

Overall, the ideas that share by the Indonesian businessmen that doing business in

Taiwan contribute to the making up of institutions. This institution not only works to offer network and information services but also help the government to deal with some cases related to the migrant workers. Therefore, Indonesian businessmen that running business in

Taiwan serve two functions within Indonesia and Taiwan relations, as independent economic agent and independent social agent that can influence governmental behavior.

2.2. Ikatan Citra Alumni Taiwan Seindonesia ( ICATI)

152 Ibid 153 “Daftar Tarif Pelayanan Imigrasi”, Kantor Dagang dan Ekonomi Indonesia di Taipei, accessed on May 10 th , 2013 154 Interviews, done on March 18 th , 2013 with the Head of Asosiasi Pengusaha Toko Indonesia di Taiwan (APIT) in Taipei

The second institution that also emerges due to the shared ideas of the Indonesian

businessmen is Indonesian Federation of Taiwan Alumni Associations or Ikatan Citra Alumni

Taiwan seIndonesia (hereafter ICATI). This institution actually was built to gather alumni

that graduated from Taiwan universities. However, due to the member of this association are

ethnic Chinese that also doing business with Taiwan hence this association can also consider

as business association. ICATI was established around 43 years ago with the main aim to

strengthen the network among Taiwan’s alumni, both on the social and business activity. 155

ICATI serves as independent cultural agent and independent economic agent that help to promote the economic and socio-cultural relations between Indonesia and Taiwan. On the context of independent cultural agent, ICATI conducts several programs such as held the

Calligraphy Class which sponsored by Taipei Economic and Trade Office (hereafter TETO), provide assistances for Indonesian students that willing to continue their study in Taiwan, and promoter for the sister-city MOU between Singkawang, West Kalimantan with Taoyuan,

Taiwan. 156 ICATI activities always include the representative from TETO, thus ICATI build

strong socio-cultural network and information with Taiwan through its representative office

in Jakarta.

On the context of independent economic agent, ICATI served as a bridge for the

Taiwanese Investors that going to invest in Indonesia. 157 They create a bridge that has three main functions. First, ICATI built economic cooperation and network with Taiwan Business

Club in 2008 and TETO Economic Division. 158 These cooperation and network help to promote investment activity in Indonesia through the existence of Taiwan Business Club.

Second, ICATI also help to reduce the language barrier that occurred between the Taiwanese

155 “Profil” Ikatan Citra Alumni Taiwan seIndonesia (ICATI) < http://icati.org/profil.asp > accessed on May 10 th , 2013 156 Lawatan Ketua Umum, Ibu Rini Lestari, ke Kalbar Bersama Rombongan TETO & Taiwan Business Club accessed on May 12nd, 2013 157 Interview with the President of Indonesian Federation of Taiwan Alumni Association (ICATI in Bahasa) on Thursday, April 4 th , 2013 158 Ibid.

94 investors and local partners in Indonesia. ICATI’s member graduated from Taiwan universities thus made them able to speak fluent Mandarin. Third, ICATI also helps the

Indonesian government to promote better investment environment in order to attract the interest of Taiwanese investors to invest in Indonesia. 159

The main existence of ICATI is to reduce the language and cultural gap between

Taiwanese investors and local investment partners. In addition, ICATI’s members are mostly

Indonesian ethnic Chinese that also appealed the willingness of Taiwan’s investors to invest in Indonesia. The Taiwanese businessmen tend to give more favor toward the ethnic Chinese workers rather than the local Indonesian workers because of the sense of similar culture and characteristics (see figure IV.1.)

Joint venture Large-sized Taiwanese enterprises Large-sized Taiwanese enterprises

Sub contract Management staff

Management Staff Small-and-medium-sized Ethnic Chinese graduates from Taiwanese enterprises Taiwanese Universities, and other ethnic Chinese

Management-labor relations Management-labor relations

Local or Domestic Workers (Non-Chinese)

Source: Chen Jie, “Human Dimensions of Taiwan – Southeast Asia Economic Interdependence: A Preliminary Observation” in Samuel C.Y. Ku, ed., Southeast Asia in the New Century: An Asian Perspective (Kaohsiung: Center for Southeast Asian Studies, National Sun Yat-sen University, 2002), pp. 103

From the above figure, it shows that Taiwanese enterprises tend to recruit ethnic Chinese which is graduated from Taiwan universities or other ethnic Chinese to hold the position of

159 Ibid.

95 management staff. Similar culture and language is the main reason for the Taiwanese businessmen to employ and work together with the ethnic Chinese in Indonesia.160

Overall, the ideas about running business with Taiwan that shared by the Indonesian businessmen play a part to the making up institutions called ICATI. This institution served two main functions, as independent economic agent and independent socio-cultural agent that influence governmental relations in terms of economic and socio-cultural relations. ICATI’s member that graduated from Taiwan’s universities and run business with Taiwan directly promote Indonesia and Taiwan relations. Similar culture and language reduce the investment barrier between Taiwanese business people and local investment partners in Indonesia. Hence, culture mattes on terms of people-to-people interactions.

2.3. Ikatan Pekerja Indonesia Taiwan (IPIT)

The third institution that builds from the shared ideas of the people is Indonesian

Migrant Workers Association in Taiwan or Ikatan Pekerja Indonesia Taiwan (hereafter IPIT).

IPIT was established in 2008 as a response toward violations against the Indonesian migrant

workers from the Taiwanese employers. 161 There are two categories of violation against the migrant workers: labor case violations and non-labor case violations. 162 Labor case violations relate to the problem of payment of salary, taxes and savings procedure with agents; meanwhile non-labor cases include the case of sexual harassment. In order to reduce the burden and raise solidarity among migrant workers to against the violation, the Indonesian migrant workers formed IPIT. The establishment of IPIT also gets support from Taiwan

International Workers Association (hereafter TIWA).163

160 Interview with the President of Indonesian Federation of Taiwan Alumni Association (ICATI in Bahasa) on Thursday, April 4 th , 2013 and interview with the Head of Industry Department, Indonesian Economic and Trade Office in Taipei on March 13rd, 2013. 161 Interviews, done on March 14 th , 2013 with the Head of Ikatan Pekerja Indonesia Taiwan (IPIT) in Taipei 162 Interviews, done on March 14 th , 2013 with the Head of Labor Department, Indonesian Economic and Trade Office (IETO) in Taipei 163 Interviews, done on March 14 th , 2013 with the Head of Ikatan Pekerja Indonesia Taiwan (IPIT) in Taipei

IPIT serve as independent social agents that concern over the capacity building activity for the migrant workers. This institution has two main activities that help to build the capacity of the Indonesian migrant workers. 164 First, provide the training such language enrichment program (Mandarin and English), music, and computer learning. Second, provide a discussion forum to give solutions for the Indonesian migrant workers that have to deal with some violation problems. In order to solve the violation problems, IPIT also work together with IETO office. From these two programs, IPIT play as independent social agents which help to solve the problem of migrant workers by building a linkage between

Indonesian representative government and Taiwan’s non-governmental organization that focus on migrant workers issues.

Establishment of IPIT also influenced by the Indonesian culture called

“silaturahmi” 165 . Indonesian people holding the sense of brotherhood toward each other, thus wherever Indonesian people reside abroad they will gather each other into an institution in order to maintain the sense of brotherhood. The culture of silaturahmi is the main reasons that endorse Indonesian people to gather and to form institutions. Silaturahmi is being one of the socially shared knowledge that is both common and connected between individuals. 166

Hence, through holding on this culture ethic, Indonesian migrant workers formed institution

called IPIT.

2.4. Perhimpunan Pelajar Indonesia di Taiwan (PPI Taiwan)

The last institution that emerges due to the shared ideas of Indonesian people in

Taiwan is Indonesian Student Association in Taiwan or Perhimpunan Pelajar Indonesia di

Taiwan (hereafter PPI Taiwan). PPI Taiwan was established on May 2 nd , 2010 with four main aims: to strengthen the sense of brotherhood and unity among Indonesian students in Taiwan,

164 Ibid. 165 Ibid 166 Alexander Wendt, Social Theory of International Politics (Cambridge: Cambridge University Press, 1999), pp. 141

97 to actualize academic community and environment among Indonesian students, to perform actively as an Indonesian cultural ambassador abroad, and to strengthen international cooperation and partnership within people and society both toward Taiwan, Indonesia and international community. 167 The member of PPI Taiwan comprises all Indonesian students in

Taiwan without distinguishing ethnic, religion or races. 168 Hence, PPI Taiwan actually has a

lot of network from its member because it includes Indonesian students all over Taiwan that

also have various professional background or knowledge. 169

The establishment of PPI Taiwan was endorsed by the socially shared knowledge about “ gotong-royong ”. Gotong royong or communal work is the cultural heritage from

Indonesian predecessors about the idea of helping each other hand in hand to do some activities or to deal or solve any problems. Hence, in order to help solving each other’s problem and to maintain the sense of unity and brotherhood, Indonesian students create PPI.

This idea not only contribute to the establishment of PPI Taiwan but also other PPI in other countries where Indonesian students earning degree abroad. 170 Thus wherever Indonesian students studying abroad they will form an institution called PPI, for example, Indonesian students in France formed PPI France; Indonesian students in Russia created PPI Russia

(PERMIRA). Those PPI will connect and coordinate each other through PPI Dunia or

Overseas Indonesian Student Association Alliance (hereafter OISAA). In addition, PPI is the formal institution that legally recognized by the Indonesian government. The last symposium of OISAA was attended by the Indonesian President, Susilo Bambang Yudhoyono. 171

167 Anggaran Dasar dan Anggaran Rumah Tangga Perhimpunan Pelajar Indonesia di Taiwan Pasal 7 /the Statue of Indonesian Student Association in Taiwan, Article 7 168 There are several Indonesian student organizations in Taiwan, however some of them relied their basic principles based on religion such Muslim or based on ethnic. PPI Taiwan is the only student association that includes all elements of Indonesian student without distinguishing them from the religion, ethnic or race background 169 Interviews, done on March 17 th , 2013 with the Head of Perhimpunan Pelajar Indonesia di Taiwan (PPI Taiwan) in Taipei 170 Interviews, done on March 17 th , 2013 with the Head of Perhimpunan Pelajar Indonesia di Taiwan (PPI Taiwan) in Taipei 171 Ibid.

On the context of PPI Taiwan, this institution get fully support from the IETO offices

in Taipei. Support is mainly expressed in the form of budgeting activities which all PPI

Taiwan’s activity financed by IETO. Even though PPI Taiwan’s activity financially funded

by IETO, this institution does not immediately work under the command of IETO, it still

maintains its independent positions toward government. 172 PPI Taiwan held several main programs to fulfill its function as independent socio-cultural agent.

First, PPI Taiwan routinely conducts capacity building activity with migrant workers.

The capacity building activity always includes the Director of Labor Department IETO as the guest speaker with topics such immigration, employment, consular and how to solve problems related to the migrant workers. In addition, the capacity building also involves health counseling on the issues of HIV/AIDS. This kind of capacity building not only held in northern Taiwan but also in Central or Southern Taiwan. Second, PPI Taiwan also actively organized focus group discussion, seminar or public discussion that discusses various topics and invites professional guest speakers. This activity aims to increase the capacity building of

Indonesian students in Taiwan. Third, PPI Taiwan also involve within governmental research project between IETO and Taiwan.

Fourth, PPI Taiwan always participates and supports Indonesian Culture Exhibition or

Festival which held by Indonesian students to introduce Indonesian culture toward Taiwanese society. This activity can create mutual understanding between Indonesia and Taiwan both in present and future time. The last, PPI Taiwan provide information and networking for

Indonesian students that are going to study in Taiwan. In this way, PPI Taiwan also helps

Taiwan to improve the number of international students from Indonesia earning degree in

Taiwan. In sum, the emergence of PPI Taiwan can promote people-to-people interactions between Indonesia and Taiwan under the absence of diplomatic relations.

172 Ibid.

Overall, similar distribution of ideas about coming to Taiwan for the purpose of

business, working, and studying contribute to the making up institutions. These institutions

formed under the sense of unity and brotherhood to help each other and to improve

interaction within businessmen, migrant workers and students. Furthermore, those four

institutions work independently as economic and socio-cultural agent, hence they can

promote Indonesia and Taiwan relations without any fear of political interventions or

pressure that could occur from any sides as a consequent of one-China policy hold by

Indonesian government. 173 The existence of these institutions also forms the interest of

Indonesia to maintain its economic and socio-cultural relations with Taiwan. It proves through several MOU that occurred between two level governments on terms of economic and socio-cultural relations.

3. Economic and Socio-Cultural Interests between Indonesia and Taiwan

According to Wendt, shared ideas both private knowledge and socially shared knowledge making up norms and institutions that constitute state’s identities and interests. 174

The two previous sections of this chapter have already discussed about shared ideas and

making up institutions between Indonesia and Taiwan. Hence, this section will analyze the

third indicators of independent variable about economic and socio-cultural interest between

Indonesia and Taiwan. These interests stem due to the shared ideas and creation of

institutions by the Indonesian businessmen, Indonesian migrant workers and Indonesian

students. Furthermore, these interests cause three levels of interactions between Indonesia

and Taiwan that stem from people-to-people interactions.

First is unofficial interaction that purely consists of only economic and socio-cultural

interactions that do not include formal governmental exchanges. Second is semi-official

interaction that has average political implications. This level includes official governmental

173 Ibid. 174 Alexander Wendt, Social Theory of International Politics (Cambridge: Cambridge University Press, 1999), pp. 104

100 exchanges either from Taiwan or Indonesia. The last is official interaction that comprises of official government-to-government exchanges between Indonesia and Taiwan. This level give highest political implications because contain official government exchanges. In order to explain economic and socio-cultural interest between Indonesia and Taiwan as well as the level of interactions this section will be divided into two parts, economic interests and socio- cultural interest.

3.1. Economic Interests

Economic interests of Indonesia toward Taiwan stem from people-to-people

interactions that build from Indonesian businessmen together with Taiwanese investors.

Indonesia that adhere one-China policy principle will be difficult to define and to conduct its

economic relations with Taiwan. However, due to Indonesian businessmen that collaborate

with Taiwanese investors created massive economic interactions and networks, both

countries are able to maintain its economic relations. There are three level economic

interactions that use to measure economic interests between Indonesian and Taiwan.

First is unofficial economic interaction. On this level, interactions between Indonesia

and Taiwan purely built through economic activities such trade and investment conducted

either by Indonesian businessmen or Taiwanese business people. There are no official

governmental exchanges between the two countries on this level of interactions. Economic

activities on this level include but not limited to foreign direct investment from Taiwan to

Indonesia, recruitment of Indonesian workers to work at Taiwanese factories built in

Indonesia, trade through private firms, business or trade conference conducted by private

sector, seminar and/or fairs that not include government officials, and other activities that

only rely on purely economic interactions. So, the final outcome from those activities would

be to fulfill the economic interest between Indonesia and Taiwan.

101

The second level is semi-official economic interactions that comprise economic exchanges between officials either from Indonesia or Taiwan with Indonesian businessmen and/or Taiwan business people. Economic activities within this level were mostly conducted by independent economic agents such as ICATI and Taiwan Business Club that also invite governmental officials whether from Indonesian or Taiwan. From 1990 until 2012, there have been 6 semi-officials economic interactions between Indonesia and Taiwan.

Table 4-4 Semi-Officials Economic Exchanges between Indonesia and Taiwan, 1990-2012 Date Semi-Officials Economic Exchanges Main Aims May 1991 Jakarta-Taipei School was established To fulfill the needs of better education of Taiwanese Businessmen’s children that reside in Jakarta July 1995 Surabaya-Taipei International School To fulfill the needs of better education of was established Taiwanese Businessmen’s children that reside in Surabaya 2000s Taiwan reduce the amount of capital to To attract more investment or business invest or run business in Taiwan activity from foreign countries including Indonesia July 2011 Indonesia and Taiwan Business Day To discuss and to improve future economic organized by TAITRA was held in relations between Indonesia and Taiwan Taipei September MOEA Taiwan launched a business To facilitate the investment and business 2011 tour to Indonesia for the investment activities of Taiwanese investors in Indonesia and business activities July 2012 Hon Hai Chairman (Foxconn) Terry To survey the market for investment in Gou, visited Indonesia as the invitation Indonesia from the Indonesian government Source: Data collected randomly from reliable sources such Governmental Official Webpage and Indonesia and Taiwan Newspaper

The table above shows semi-official economic exchanges between Indonesia and

Taiwan. These activities mostly run by Taiwan business people that work together with

Indonesian businessmen. These also involved government officials either from Indonesia or

Taiwan. The outcome not only contributes to economic benefits but also average political

implications because involving some of government officials.

The third level is official economic interaction. This level of interaction includes

official economic exchanges that involve high-level of government officials such as Minister

102 or Deputy Representative between Indonesia and Taiwan. Official economic exchanges embrace two main activities: sign MOU to strengthen economic relations and government visit or exchange. From 1990 until 2012, there have been 9 official economic interactions in terms of trade and investment that conducted by both Indonesia and Taiwan government.

These official economic contact, mainly are driven to accommodate the investment and trade interests that stem from people-to-people interactions. The official interactions can be sum-up below:

Table 4-5 Officials Economic Exchanges between Indonesia and Taiwan, 1990- 2012 Date Official Economic Exchanges Main Aims 1990 Indonesia and Taiwan signed To give protection and non-discrimination Bilateral Investment Protection status for foreign investment in Indonesia, Agreement including Taiwanese investment January 1995 The Indonesian Chamber of To further strengthen the economic and trade Commerce in Taipei was renamed activity between Indonesia and Taiwan. This into the Indonesian Economic and ideas stem due to the increasing number of Trade Office (IETO) in Taipei investment and trade activities that stem from people-to-people interactions 1995 Indonesia and Taiwan signed To regulate the taxation system in order to Agreement for the avoidance of avoid double taxation that could stem from double taxation and the prevention of economic activities between Indonesia and fiscal evasion with respect to taxes Taiwan on income July 2010 Indonesia's Minister for Maritime To develop Morotai Island and to diversify Affairs and Fisheries visited Taiwan Taiwanese investment in Indonesia. Taiwanese to propose joint development in investment in Indonesia mostly concentrated in Morotai Island to President Ma Ying Java Island under the area of Jababeka Group Jeou August 2010 The Chairman of Indonesia To increase investment activities between Investment Coordination Board Taiwanese investors and Indonesian (BKPM), Gita Wirjawan, visited businessmen Taipei and Kaohsiung for investment purpose September- Taiwan Ministry of Economic To make a courtesy call on BKPM and to October 2010 Affairs, Dr. Yen-Shiang Shih made a visit Jababeka and Lippo Cikarang visit to Jakarta together with Export Processing Zone for assessment Taiwanese business delegation of investment. March 2011 Indonesian Minister of Marine To discuss the further implementation of jont Affairs and Fisheries visited Taiwan development over Morotai Project to participate in the "Forum for Cooperation in Morotai" and advocate bilateral cooperation toward development in the island May 2012 Indonesian Trade Minister visited To discuss the investment possibility of Taiwan Foxconn

103

December Taiwan-Indonesia signed To develop Morotai Island through investment 2012 memorandum of understanding on a activities that conducted by Taiwanese plan to jointly develop Morotai investors and local partner of Indonesian Island businessmen Source: Data collected randomly from reliable sources such Governmental Official Webpage and Indonesia and Taiwan Newspaper

Based on the table above, it shows that official governmental interactions between

Indonesia and Taiwan were mainly formed through the interests of Taiwanese investment and

Indonesian businessmen that would like to further increase investment and trade activities.

Economic activities that conducted through Indonesian businessmen and Taiwan business

people, give political implications toward government affairs. Their activities force both

governments to work together though under the absence of diplomatic relations.

The government works as economic facilitator and economic provider for the massive

interactions that emerge from people-to-people interactions. 175 The term economic facilitator

and provider refer to some activities such issuing visa for those who want to run business

both in Indonesia and Taiwan, formulating regulations to ensure investment activities,

searching local partners for Taiwanese investments, providing information about trade and

investment activities, signing MOU to lure investment and trade relations. 176 In sum,

Indonesia’s economic interest toward Taiwan stems and shapes from the interactions that

built by Indonesian businessmen and Taiwanese investors.

3.2. Socio-Cultural Interests

Indonesia’s socio and cultural interest toward Taiwan stem from the interactions that

built by Indonesian migrant workers and Indonesian students in Taiwan. Their huge

population and interaction in Taiwan also caused three different levels of interactions. On the

175 This statement also supported by Indonesian representative officials in IETO based on the interview with the Head of Industry Department, Indonesian Economic and Trade Office in Taipei, done in March 13rd, 2013 and interview with the Head of Investment Department, Indonesian Economic and Trade Office in Taipei, done on March 13rd, 2013 176 Ibid.

104 context of socio-cultural relations, interest not only forms through people but also from the existing institutions.

Unofficial socio-cultural interactions between Indonesia and Taiwan occur through

several socio-cultural activities done by Indonesian migrant workers and Indonesian students.

Indonesian migrant workers through its institution called IPIT usually conduct a discussion

forum to solve violation related to migrant workers. This discussion forum involves other

institutions from Taiwan such as Taiwan International Workers Association. Both institutions

create unofficial social interactions through their discussion forum. Furthermore, migrant

workers that work as care-taker also contribute to unofficial socio-cultural interactions both

for Taiwanese society and Indonesia.

In addition to Indonesian migrant workers, Indonesian students in Taiwan also build

unofficial socio-cultural relations with Taiwan. These students periodically held Indonesian

Cultural Festival or Exhibition in order to promote Indonesian culture to international

community particularly Taiwan. This event not only invites students from Indonesia to

perform but also students and faculty member of Taiwan’s university to enjoy the cultural

performance. This activity creates unofficial cultural exchanges between Indonesia and

Taiwan through Indonesian’s dance, music and drama performance.

The second level of interactions is semi-official interactions. On this level, socio-

cultural interactions not only built by Indonesian students but also conducted by Indonesian

businessmen under their own institution. From 1990 until 2012, there have been 6 semi-

official interactions between Indonesia and Taiwan:

Table 4-6 Semi-Officials Socio-Cultural Exchanges between Indonesia and Taiwan, 1990-2012 Date Semi-Official Exchanges Main Aims 2004 Taiwan through its Ministry of To encourage outstanding international students to Education provide Taiwan undertake degree studies in Taiwan so as to Government Scholarship for familiarize themselves with academic environment Indonesian students in Taiwan and promote communication, understanding and friendship between Taiwan and countries around the world

105

April 2010 ICATI together with Taiwan In order to realize MOU sister-city between Business Club and TETO Taoyuan and Singkawang, West Kalimantan representative visited West Kalimantan, Indonesia May 2010 The Elite Study in Taiwan (ESIT) To enhance education cooperation with Indonesia delegation visited Indonesia October 2010 The Ministry of Education Taiwan To strengthen cultural and educational interchange held the first Taiwan Higher between Taiwan and Indonesia Education Fair in Indonesia September- The second Taiwan Higher to facilitate Indonesian students with information October 2011 Education Fair took place in Aceh, of scholarship and university admission procedure Yogyakarta and Surabaya October 2012 The third Taiwan Higher Education to facilitate Indonesian students with information Fair held in Surabaya and Jakarta of scholarship and university admission procedure Source: Data collected randomly from reliable sources such Governmental Official Webpage and Indonesia and Taiwan Newspaper

The table above clearly describes several semi-official exchanges between Indonesia

and Taiwan in terms of socio-cultural relations. Exchanges mostly occurred due to the

interactions built from Indonesian students and Indonesian businessmen. On this context,

Indonesian businessmen under ICATI not only contribute to semi-official economic

exchanges but also semi-official socio-cultural exchanges. The outcome of these exchanges

will improve the number of Indonesian students in Taiwan, strengthen socio-cultural

interactions in the future, and create mutual understanding among the society.

The last level of interactions is official socio-cultural interactions that include

government-to-government exchanges between Indonesia and Taiwan. Under the absence of

diplomatic relations, it would be difficult for Indonesia and Taiwan to conduct formal

governmental exchanges; however, people-to-people interactions contribute to the official

socio-cultural interactions between the two countries. Furthermore, the existence of

institutions in Taiwan also helps the Indonesian government to have better understanding

toward Taiwan. During 1990 until 2012, there have been 7 governmental exchanges between

Indonesia and Taiwan on terms of socio-cultural issues. Detail exchanges sum-up below:

106

Table 4-7 Officials Socio-Cultural Exchanges between Indonesia and Taiwan, 1990-2012 Date Governmental Exchanges Main Aims December 2004 Indonesian and Taiwan signed To lift a ban on labor importation from MOU on labor importation Indonesia that had been started since August 2002. From this MOU, Indonesian migrant workers could start working in Taiwan again after the banned for two years 2010 The Aceh Government signed To rebuild Aceh’s government and professional MOU with Taiwan Ministry of resources after the Tsunami in 2004 Education to provide scholarship for the Aceh citizenship (Beasiswa Pemerintah Aceh) January 2011 the MOU on The Recruitment, To renew the MOU on labor importation that Placement and Protection of had been signed between Indonesia and Taiwan Indonesian Overseas Workers in 2004 between Indonesia and Taiwan has been approved May 2011 The Ministry of National To provide scholarship to students of related Education Indonesia and the universities, to facilitate the exchange program Ministry of Education Taiwan in education, to encourage joint research and signed MOU on Cooperation in international publication between Indonesia and the Field of Higher Education Taiwan. July 2011 IETO Office in Taipei set up the To further take over the Indonesian migrant establishment of Labor workers affairs. Before 2011, the labor Department department was under the Immigration Department. However, due to the needs and necessity to set up independent department, Labor Department was established in July 2011 January 2012 Taiwan's legislature has amended To give more opportunity for foreign workers to an act that allowed foreign stay and work longer in Taiwan workers to remain in the country for only nine years at the most for up to 12 years April 2012 The First Taiwan-Indonesia To disseminate the MOU on the cooperation of higher education summit took higher education which had been signed in May place in Taipei 2011 Source: Data collected randomly from reliable sources such Governmental Official Webpage and Indonesia and Taiwan Newspaper

The table above shows that official socio-cultural exchanges stem after the massive interactions lead by Indonesian migrant workers and Indonesian students in Taiwan. On the context of migrant workers, Indonesia signed MOU in 2004 and 2011. In 2004, Indonesia signed MOU to overcome the problem of ban Indonesian migrant workers. Moreover, in

2011 Indonesia renewed the MOU with Taiwan’s government. Furthermore in July 2011, the

IETO office set up Labor Department to undertake the migrant workers affairs. Those efforts

107 are in line with the dynamic interaction which emerged from the massive connection produced by Indonesian migrant workers in Taiwan.

The Indonesian government that adhere one-China policy will be difficult to conduct

official governmental relations in terms of socio-cultural relations. However, due to the

existence of Indonesia migrant workers in Taiwan, the Indonesian government is able to

conduct official governmental exchanges. On this manner, the Indonesian government serves

its basic function as economic and security provider for its citizen. In addition, the

government also works together with institution such IPIT, APIT and PPI Taiwan to

maximize the state’s function as economic and security provider toward Indonesian migrant

workers.

Similar case with the migrant workers, Indonesian students in Taiwan also shape the socio-cultural interests of Indonesia toward Taiwan. Indonesian government signed MOU on higher education cooperation in 2011 in order to improve the socio-cultural exchanges between two countries. Furthermore, both countries also worked to hold Indonesia and

Taiwan Higher Education Summit. Those efforts conducted to strengthen the socio-cultural exchanges between Indonesia and Taiwan that already well-established through the intense interactions of Indonesian students in Taiwan. Moreover, the Indonesian government representative in Taipei also works with PPI Taiwan to further discuss about the possibility of opening up the education attaché in IETO in the near future 177 . Thus, in this line, shared ideas of entering Taiwan in the purpose of study contribute to the making up institutions that eventually influence state-to-state interactions.

In sum, Indonesia economic and socio-cultural interest toward Taiwan stem and constitute from the process of distribution ideas and creation of institutions which built by

Indonesian businessmen, Indonesian migrant workers and Indonesian students in Taiwan.

177 Interviews, done on March 17 th , 2013 with the Head of Perhimpunan Pelajar Indonesia di Taiwan (PPI Taiwan) in Taipei

108

These three categories of people that serve as the promoter of ideas lead the interaction with

Taiwan which eventually encourages the Indonesian government to maintain its economic and socio-cultural relations with Taiwan. In addition, people-to-people interactions resulted in three different levels of exchanges: unofficial, semi-official and official exchanges.

109

Chapter V

Conclusion

1. Conclusion

As mentioned on the first chapter, the main aim of this thesis is to analyze the

underlying reason that caused Indonesia is able to nurture its economic and socio-cultural

relations with Taiwan even though under the absence of political diplomatic relations. In

order to analyze the underlying reason, this thesis employs constructivist approach that focus

on the role of people-to-people interactions between Indonesia and Taiwan. This thesis,

proposed one hypothesis to explain the underlying reason: due to the Indonesian people as the

promoter of ideas lead the interactions with Taiwan, Indonesia is able to maintain its durable

economic and socio-cultural relations with Taiwan despite under the absence of diplomatic

relations.

Drawn from the explanations on chapter 2 and chapter 3, this thesis already proved

the dependent variable that Indonesia maintains durable economic and socio-cultural relations

with Taiwan. In terms of economic relations, after the year of 1990s, Indonesia improved its

economic relations with Taiwan. It proved by the increasing number on investment and trade

activities among them. On the context of socio-cultural relations, Indonesia maintains its

relations with Taiwan through the existence of Indonesian migrant workers and Indonesian

students in Taiwan. Their existence creates massive and intense interactions which in the end

force the Indonesian government to have formal interactions with Taiwan, though under the

adherence of one-China policy.

This thesis proved the proposed hypothesis through the explanations on chapter four.

It proved that Indonesian people as the promoter of ideas lead the interactions with Taiwan thus made the Indonesian government maintains its economic and socio-cultural relations

110 with Taiwan. Ideas that narrow down into private knowledge and socially shared knowledge influence the Indonesian businessmen, Indonesian migrant workers and Indonesian students to conduct people-to-people interactions with Taiwan. Moreover, these distributed ideas contribute to the making up institutions. Those institutions served as independent economic agent, independent social agent and independent cultural agent that influence the work of the structure which is the government. The distribution of ideas together with the creation of institutions constitutes the interest of Indonesia toward Taiwan.

The economic interest of Indonesia toward Taiwan stem from people-to-people interactions that built from Indonesian businessmen together with Taiwanese investors, meanwhile Indonesia’s socio and cultural interest toward Taiwan stem from the interactions that built by Indonesian migrant workers and Indonesian students in Taiwan. During 1990 until 2012, there were both 6 semi-officials exchanges in terms of economic and socio- cultural issues. Meanwhile, in terms of economic official exchanges, Indonesia conducted 9 contacts with Taiwan; while 7 government exchanges in terms of socio-cultural issues. These contacts occurred after intense interactions conducted by Indonesian businessmen, Indonesian migrant workers and Indonesian students.

Under the absence of diplomatic relations, Indonesian government served as economic and security provider for the activities built by Indonesian businessmen, Indonesian migrant workers and Indonesian students. It is the basic function and the obligation of the state to protect their citizen interest wherever the citizen reside or living. On the context of economic and security provider, the government facilitates the activity of the people by conducting some activities such issuing visa, signing MOU that can strengthen the mutual interactions, provide better environment for economic activities, formulating regulations and other activities that categorized as the basic functions of the state.

111

The clear picture of Indonesia and Taiwan relations shows below (Figure V.1.):

Indonesia No Diplomatic Relations Taiwan

People-to-people interactions: 1. Indonesian Businessmen 2. Indonesian Migrant Workers 3. Indonesian Students

Ideas – Knowledge

Institutionalism – APIT,

ICATI, IPIT and PPI Taiwan

Constitute

Economic and Socio - Cultural Interests

Un -official exchanges Semi -official exchanges Official exchanges between Taiwan and between Taiwan and between Taiwan and Indon esia Indonesia Indonesia

At first Indonesian and Taiwan do not have official diplomatic relations. However, people in terms of Indonesian businessmen, Indonesian migrant workers and Indonesian students keep coming to Taiwan or keep in touch with Taiwan for business, working and studying activities. These people shared their ideas about private and socially shared knowledge that caused them to come to Taiwan. Moreover, in Taiwan, these people form some institutions to further strengthen their interactions with Taiwan. Furthermore, shared ideas that contribute to the making-up institutions, constitute the economic and socio-cultural interests of Indonesia. These interests that are eventually create three different levels of exchanges between Indonesian and Taiwan: unofficial exchanges, semi-official exchanges,

112 and official exchanges. The second and third level of exchanges not only consists of economic and socio-cultural interest but also contribute to the political implications in terms of government-to-government relations. Hence, due to the Indonesian people as promoter of ideas lead the interactions with Taiwan; Indonesia is able to maintain its durable economic and socio-cultural relations with Taiwan despite under the absence of diplomatic relations.

2. Theoretical Implications

Study on Taiwan and Indonesia relations mostly focus on the analysis of economic

diplomacy and interest (Leifer;2001, Ku;1995, Leong;1995, Lee;1990, Klintworth;1995,

Rich:2009), the shift on international order (Ku;1998), the development of cross-strait

relations (Chen;1996, Lin;2010), the factors of people-to-people particularly Taiwan

businessmen ( 台商 ) (Chen;2002), the policy of separation of politics and economics

(Ku;1998), and the PRC’s factor on Indonesia and Taiwan relations (Ku;2002, Irawan;2006).

However, analysis on the role of people from the Indonesian perspective has been the minor parts on the existing research of Indonesia and Taiwan relations, whereas people on the context of Indonesian businessmen, Indonesian migrant workers and Indonesian students create reciprocal interaction with Taiwan that help to promote Indonesia and Taiwan relations.

Therefore this thesis focuses on the analysis of people from Indonesian point of view to enrich theoretical discourse on the study of Indonesian and Taiwan relations. In the future, research on Taiwan and Indonesia relations could be measured through the role of other people such foreign spouse, Indonesian academic community and/or Indonesian non- governmental organizations that also promote Indonesia and Taiwan relations. Further research could also address the perception of Indonesian government and/or minister toward the dynamic relations between Indonesia and Taiwan.

113

3. Implications for Indonesia and Taiwan

This thesis has several implications for Indonesia and Taiwan. On the context of

Indonesia, Indonesia could have more intense relations with Taiwan in the near future

because population of Indonesian in Taiwan will increase. MOU between the two

governments will open more opportunity for Indonesian people to come to Taiwan either for

business, working or studying. Once these people return back to Indonesia, they will promote

Taiwan to other Indonesian society. Thus it produces the reciprocal interactions and mutual

understanding between Indonesia and Taiwan.

Furthermore, intense people-to-people interactions between Indonesia and Taiwan

also give political implications. To exemplify, Indonesia is able to conduct official

governmental exchanges with Taiwan though under the absence of diplomatic relations.

These official exchanges considered as one of political implications that forms through

massive people-to-people interactions between the two countries. Thus, in the future,

Indonesia could have more official governmental exchanges with Taiwan which could

improve their mutual understanding.

On the other side, Taiwan could improve its relations with Indonesia through the existence of institution that built by Indonesian businessmen, Indonesian migrant workers and

Indonesian students. These institutions have independent characteristics which do not work under the government command. Thus, they will be free from any political intervention that could stem from the adherence of one-China policy principle hold by Indonesian government.

114

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APPENDIX A: FIELD RESEARCH ACTIVITIES MARCH-MAY 2013

Date Field Research Activities

March 13 rd , 2013 Indonesian Economic and Trade Office (IETO) in Taipei: interview

and data collection on Investment Department

IETO in Taipei: interview and data collection on Industrial

Department

March 14 th , 2013 IETO in Taipei: interview and data collection on Labor Department

Ikatan Pekerja Indonesia Taiwan (IPIT) : interview and data collection

March 17 th , 2013 Perhimpunan Pelajar Indonesia (PPI) di Taiwan: interview and data

collection

March 18 th , 2013 Asosiasi Pengusaha Toko Indonesia di Taiwan (APIT): interview and

data collection

March 20 th , 2013 Elite Study in Taiwan: interview and data collection

April 2 nd , 2013 Lembaga Ilmu Pengetahuan Indonesia (LIPI): interview and data

collection on Pusat Penelitian Politik (Center for Political Studies)

April 4 th , 2013 Ikatan Citra Alumni Taiwan seIndonesia (ICATI): interview and data

collection

April 8 th , 2013 The Habibie Center Jakarta: interview and data collection

May 2 nd , 2013 Ministry of Foreign Affairs, ROC, Taiwan: interview and data

collection on Department of East Asian and Pacific Affairs

121