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Indonesia to intensify diplomacy, anticipate economic impacts of Middle East tensions

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A man walks past a banner depicting missiles launching from a representation of the map of Iran colored with the Iranian flag in central Tehran on Monday (15/4/2024). (Photo: AFP/Atta Kenare)

VOInews, Jakarta: Indonesia continues to make diplomatic efforts to defuse geopolitical tensions in the Middle East that have occurred recently, said Indonesian Minister of Foreign Affairs, Retno Marsudi. It was especially amid the recent tension between Israel and Iran in a past few days.

Minister Retno stated that she had carried out intensive communication with world leaders. Minister Retno also explained that in the last two days, she communicated by telephone and exchanged messages to emphasize the importance of restraint and defuse conflict tensions.


“...Two things we convey in all communications. With the parties directly involved, what we are asking for is self-restraint and de-escalation, the importance of de-escalation," she said in a press statement after attending a meeting with Indonesian President Joko Widodo on Tuesday (16/4/2024).


The leaders included the ministers of foreign affairs from Iran, Saudi Arabia, Jordan, Egypt, the United Arab Emirates, and the European Union. Besides that, ministers of foreign affairs from Germany and the Netherlands, as well as the Deputy Secretary of State of the United States are also contacted by her.


"Meanwhile with our other friends, for example with the foreign ministers of Germany, the Netherlands, and Middle Eastern countries, we are encouraging everyone, we use our influence to prevent escalation,” she continued.


Minister Retno Marsudi also explained that diplomatic efforts had been made in international forums, including at the UN Security Council, although they had not yet produced significant progress. Furthermore, Minister Retno added that all parties currently have begun to calculate the impact if an escalation occurs.


Government to mitigate economic impacts

Meanwhile, Indonesian Coordinating Minister for Economic Affairs, Airlangga Hartarto said the Indonesian government is preparing to mitigate the impact of Middle East tensions on the global economy. According to him, phenomena such as rising oil prices, global financial market uncertainty, and the rise in US dollar value should be mitigated.

“...Of course, what we have to mitigate is the shift of assets to safe havens. In this case, the US dollar, gold and nickel have also experienced increases. The exchange rate and stock price index have also weakened globally. However, compared to peer countries, Indonesia is still relatively safe," said Hartarto after attending the same meeting.

Minister Hartarto said further that the government will execute some economic policies to mitigate the impact. That includes fiscal and monetary integration, maintaining exchange rate stability.

"Of course, we need to implement several policies, including fiscal and monetary integration, maintaining exchange rate stability, maintaining the state budget and revenue, and monitoring increases in logistics and oil prices,” he continued.

Minister Airlangga also said that the government continues to carry out structural reforms, maintain investors' expectations, and strengthen competitiveness to attract long-term investment to the country.

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