Chapter 7. Conclusion: The Sources of Cooperation
7.2.5 The Calculation of Costs and Benefits: Absolute Gains Matter
As explained above concerns over relative gains, shared identity, hegemonic leadership and bureaucratic politics cannot explain Indonesia’s participation and non-participation across cooperation cases. Therefore, we need to locate the reason of Indonesia’s varying cooperation elsewhere. Bradford and Sato cited the calculation of costs and benefits as the
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reason underpinning Indonesia’s reluctance to sign the ReCAAP.896 The calculation of costs and benefits in absolute terms is the final plausible explanation to consider.
The findings in this thesis confirm the neoliberal argument regarding the role of absolute gains calculation. Chapters Three, Four, Five and Six show that the calculation of absolute gains corresponded with negotiated outcomes. Indonesia only joined cooperation initiatives where the overall benefits exceeded the costs.
Indonesia participated in bilateral cooperation with the U.S., Japan and Australia, the BIMP EAGA MoUs on Sea Linkages and Transport of Goods, a sub regional information sharing cooperation, the ASEAN Counter-Terrorism Convention, the ISPS Code, the WCO SAFE Framework, the APEC TRP, two coordinated patrol arrangements with Malaysia and Singapore, bilateral agreements with the Philippines, India, and China, the MSP sub regional patrols, and the AMF and the ARF because the incentives offered by these initiatives exceeded the costs. Without having to do much Indonesia gained new equipment, funds to establish counter-terrorism centres and capacity building assistance in the form of training and exercises for its maritime agencies from bilateral cooperation with the U.S., Japan, Australia and China. Indonesia did not need to make significant adjustment for its maritime agencies to gain naval and aircraft surveillance support during patrols from Malaysia, Singapore, the Philippines and India.
The BIMP EAGA initiatives, the Exchange of Information Agreement, the ASEAN Counter-Terrorism Convention and the MSP agreement did not require Indonesia to make substantial changes at national level. Yet, these sub regional and regional initiatives enable Indonesia to receive enormous support from countries in the region in investigating terrorist attacks, and providing access to their finger print databases, lists of airline passengers, visa blacklists, and intelligence information and sharing burdens among them in dealing with armed robbery against ships and deterring maritime terrorism. The ISPS Code posed high implementation costs because Jakarta needed to allocate additional resources to install new security devices in its international ports, carry out ISPS Code training and exercises and review ports and ships compliance to the Code. Nevertheless, the payoff that Indonesia gained from making these additional investments was high. This
896 Sato (2007:6-7); Bradford (2004: 497)
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was because Indonesian ports and ships were not excluded from international trade, and the government received assistance to establish a Sea and Coast Guard. As the ISPS Code was one of the requirements demanded by marine insurance companies, compliance with the Code also provided the additional economic benefit of avoiding an increase in insurance premiums. Cooperation in the WCO SAFE Framework and the APEC TRP was even more straightforward for Indonesia because these initiatives provided high incentives and generated low costs. From both initiatives Indonesia gained capacity building programmes from other member states and secretariats of the WCO and the APEC to develop its own trade facilitation and recovery programme, while not having to do much more than what it already did.
Indonesia’s reluctance to join some maritime security cooperation arrangements also confirms the neoliberal argument regarding the importance of the calculation of absolute gains. Indonesia did not join three arrangements dealing with maritime terrorism: the SUA Convention, the PSI and the CSI; and three arrangements to address sea robbery: the RMSI, the ReCAAP and the DCA because these initiatives did not offer sufficient absolute gains. The Indonesian government deemed that participation in these initiatives was redundant because Indonesia could gain the benefits offered by the initiative including exchange of intelligence information, new equipment and capacity building assistance through its participation in other maritime arrangements. Some of these arrangements including the SUA Convention, the RMSI, the PSI and the CSI also brought high costs.
The SUA Convention regulates how Indonesia must deal with unlawful acts that occur in parts of Indonesia’s maritime jurisdiction and requires Jakarta to accept external authority over disputes settlement without offering tangible economic and security benefits. The RMSI was costly for Indonesia because of problems caused by the rejection of the agreement from some Parliament members and security risks posed by radical groups. The PSI and the CSI posed even higher costs in comparison to the SUA Convention and the RMSI. The PSI would compromise Indonesia’s rights as a coastal or flag state since under this initiative Jakarta would be subjected to other participants’ demands for access when an act of interdiction took place in Indonesian waters or was carried out against vessels registered under the Indonesian flag. In addition, when a false interdiction takes place the Indonesian government faces the risk of compensating businesses for any loss and delay suffered by them. Indonesia felt that bearing such costs were unnecessary because Jakarta can gain the incentives of cooperation offered by the PSI, particularly in term of new
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equipment and capacity building training and exercises, through bilateral cooperation with the U.S. The CSI required Indonesia to change its legislation to accommodate the presence of external authority in its ports, accept external authority over significant decision making in relation to port and container security and invest more resources to purchase new security devices that meet the cooperation standard. At the same time, the high costs of the cooperation were not met with sufficient benefits. The main advantage of the CSI is to ensure unimpeded access to U.S. ports. Indonesia can gain this benefit of cooperation by transshipping its containers bound to the U.S. through Singapore and Malaysia CSI ports, a practice that has been conducted for many years by Indonesian businesses.
Across the cooperation cases presented in Chapters Three to Six the calculation of absolute gains was not influenced by societal actors, with the RMSI the only exception. In the case of the RMSI, because of popular sentiment against the initiative, societal actors which included parliament members and radical groups rejected the agreement and this influenced the government’s assessment of the costs and benefits posed by the initiative.
Having surveyed the calculation of absolute gains in all cooperation cases discussed in this thesis it is concluded that Indonesia’s decision to participate in some cooperation arrangements and not to participate in others is consistent with the absolute gains calculation.