Bambang Pamungkas
Jakarta, CNBC Indonesia – Indonesia’s bid to join the Organisation for Economic Co-operation and Development (OECD) has officially entered the crucial technical review stage, marking a significant milestone in its journey towards membership. Coordinating Minister for Economic Affairs, Airlangga Hartarto, confirmed that this phase involves an in-depth assessment by OECD teams and member countries, signifying a rigorous examination of Indonesia’s policy and regulatory landscape against international best practices. This development places Indonesia at the forefront of global economic diplomacy, positioning it as the first Southeast Asian nation to embark on such an extensive accession process.
The technical review is a multifaceted undertaking, designed to gather comprehensive information and data. It involves the distribution of detailed questionnaires to various Indonesian government agencies and stakeholders, covering an expansive array of policy areas. These questionnaires delve into the intricacies of national policies, regulations, and institutional frameworks, seeking alignment with OECD standards and instruments. Following this, fact-finding missions will be deployed, where OECD experts will conduct on-site visits, engage in dialogues with government officials, private sector representatives, civil society, and academics, to gain a firsthand understanding of the implementation and impact of existing policies. Concurrently, the OECD will undertake specific studies to analyze Indonesia’s conditions and identify areas for potential policy and regulatory refinement. The findings from these activities will then serve as the foundation for discussions at the respective OECD Committee levels, ultimately leading to recommendations for policy and regulatory improvements for Indonesia.
Minister Airlangga Hartarto, in an official statement released on Wednesday (June 3, 2026), underscored the significance of this phase, noting, "The results of these activities will then become discussion material at the OECD Committee level, which will produce recommendations for policy and regulatory improvements for Indonesia." This iterative process of assessment, discussion, and recommendation is central to ensuring that prospective members not only align with OECD standards but also internalize the principles of good governance, open markets, and sustainable development.
Understanding the OECD Accession Framework
The Organisation for Economic Co-operation and Development, often referred to as a "think tank" or a "rich-country club," is an intergovernmental economic organization with 38 member countries, founded in 1961 to stimulate economic progress and world trade. Its mission is to promote policies that will improve the economic and social well-being of people around the world. Membership is contingent upon a commitment to market economy principles, pluralistic democracy, and respect for human rights, alongside adherence to a wide range of OECD legal instruments and policy standards.
The accession process is notoriously rigorous and lengthy, typically spanning several years. It commences with a country expressing interest, followed by a formal invitation from the OECD Council, which Indonesia received in February 2024. This invitation initiated a structured roadmap for accession, outlining the various stages and policy reviews required. The technical review stage, where Indonesia currently stands, is arguably the most intensive, involving in-depth evaluations across virtually all government functions. This comprehensive scrutiny ensures that an acceding country not only possesses compatible policies but also demonstrates the institutional capacity and political will to implement and sustain them.
Broad Stakeholder Engagement: A National Endeavor
Indonesia’s accession process is not merely a government-led initiative but a comprehensive national endeavor involving a vast array of stakeholders. As the Chief Executive of the National Team for OECD Accession, Coordinating Minister Airlangga Hartarto is tasked with coordinating over 60 different entities. These include numerous government ministries and agencies, representing diverse sectors such as finance, trade, industry, environment, education, and labor. Beyond government, the process actively engages non-governmental actors, including prominent business associations like the Indonesian Chamber of Commerce and Industry (KADIN) and the Indonesian Employers’ Association (Apindo), ensuring that private sector perspectives on economic policies and regulatory frameworks are integrated. Labor unions, academic institutions, and various civil society organizations also play a vital role, providing diverse viewpoints and contributing to a holistic assessment of national policies.
Minister Airlangga emphasized the expansive scope of the reviews, stating, "The OECD accession process involves 25 OECD Committees with policy scopes in economic, governance, and social sectors, including: investment, trade, competition, fiscal policy, public governance, anti-corruption, environment, digital economy, health, education, and labor." Each of these committees conducts its own specialized review, comparing Indonesia’s existing policies and practices against the specific instruments, recommendations, and best practices developed by the OECD in their respective domains. This granular examination necessitates robust data collection, policy analysis, and a willingness to adapt national frameworks to align with international standards. For instance, the Investment Committee would review Indonesia’s investment climate, policies on foreign direct investment, and adherence to OECD Codes of Liberalisation. Similarly, the Competition Committee would assess Indonesia’s antitrust laws and their enforcement, while the Environment Committee would scrutinize environmental regulations and climate change mitigation efforts.
Indonesia’s Unique Position and Global Acclaim
Indonesia’s journey towards OECD membership has garnered significant international attention, primarily due to its status as the first country in Southeast Asia to undertake this process. This distinction highlights Indonesia’s growing economic influence and its commitment to global standards. According to Minister Airlangga, the OECD itself has noted the unprecedented enthusiasm from member countries regarding Indonesia’s candidacy. "The OECD even noted that the enthusiasm of member countries for Indonesia’s candidacy was the highest the organization had ever witnessed," he remarked. This high level of interest is manifested in numerous offers of cooperation and technical assistance from various member states, eager to facilitate Indonesia’s smooth accession.
This overwhelming support underscores Indonesia’s strategic importance. As a G20 member, the world’s fourth most populous nation, and Southeast Asia’s largest economy, Indonesia offers a dynamic market, a rapidly expanding middle class, and significant geopolitical weight. Its consistent economic growth, averaging above 5% in recent years prior to the pandemic, and its resilience in the face of global economic uncertainties, make it an attractive candidate for an organization seeking to broaden its global relevance and engage more deeply with emerging economies. The inclusion of Indonesia would diversify the OECD’s geographical representation, providing valuable insights from a rapidly developing, democratic nation in a crucial global region.
Strategic Coordination: Leveraging Momentum for National Interest
Recognizing the immense opportunity presented by this global spotlight, Minister Airlangga stressed the critical importance of effective coordination among all national stakeholders. "We must utilize this momentum so that more countries support and accelerate Indonesia’s membership," he asserted. This coordination is not merely administrative; it is strategic, aimed at ensuring that Indonesia effectively articulates its policy positions, addresses concerns raised by OECD committees, and leverages the technical assistance offered by member countries to its best advantage. It also involves managing the expectations of both internal and external stakeholders, ensuring that the accession process remains aligned with Indonesia’s long-term national development goals. The ultimate objective is to transform the technical reviews and policy recommendations into concrete reforms that genuinely benefit the Indonesian economy and its citizens, while solidifying its standing as a responsible and influential global player.
Indonesia’s Economic Vision: Downstreaming (Hilirisasi) at the OECD Ministerial Meeting
A critical platform for Indonesia to articulate its vision and engage with OECD members will be the OECD Ministerial Meeting (PTM) 2026, scheduled to take place in Paris on June 3-4, 2026. Coordinating Minister Airlangga Hartarto will represent Indonesia at this high-level gathering. A central tenet of Indonesia’s presentation will be its "hilirisasi" (downstreaming) policy, which the government champions as a key strategy for national economic transformation.
Hilirisasi refers to the national policy of increasing the added value of raw commodities by processing them domestically rather than exporting them in their raw form. This policy has been notably applied to minerals such as nickel, bauxite, and copper, as well as agricultural products like palm oil. Indonesia’s government views hilirisasi as instrumental in creating higher value-added industries, generating more sophisticated and skilled employment opportunities, strengthening the national economic structure, and enhancing resource sovereignty. For instance, by processing nickel ore into battery components, Indonesia aims to integrate itself into the global electric vehicle supply chain, moving beyond its traditional role as a raw material supplier.
Minister Airlangga is slated to be a keynote speaker in a session at the PTM that will delve into the delicate balance between industrial policy for open markets and welfare. This particular topic is highly relevant, as hilirisasi, while aiming to boost national welfare, might raise questions among some OECD members regarding its compatibility with free-market principles and global trade rules. Indonesia’s mission will be to demonstrate how its downstreaming policy, despite its interventionist elements, ultimately contributes to global supply chain resilience, fosters sustainable industrial development, and aligns with broader welfare objectives, rather than being a protectionist measure. The aim is to showcase how strategic industrial policies can be deployed to foster economic diversification and resilience, even within an increasingly interconnected global economy.
Diplomatic Outreach and Strategic Alliances
To ensure the smooth progression of the technical accession process and to garner crucial international support, Minister Airlangga will undertake a series of bilateral meetings during his visit to Paris. He is scheduled to meet with ministers from more than eight friendly nations, including key economic partners such as Australia, the United States, Japan, the United Kingdom, Finland, and Thailand. These bilateral engagements are vital for building consensus, seeking technical assistance in specific policy areas, and addressing any potential concerns that member countries might have regarding Indonesia’s policies. Such diplomatic efforts are essential to navigate the complex political dimensions of OECD accession, where the final decision requires unanimous agreement from all existing members.
Furthermore, Minister Airlangga will hold discussions with the leadership of Business at OECD (BIAC), which serves as the official voice of the business community within the OECD. BIAC plays a significant role in shaping OECD policy recommendations by providing private sector perspectives. Engagement with BIAC is crucial for Indonesia to demonstrate its commitment to a business-friendly environment, to understand the concerns of international businesses, and to foster partnerships that can facilitate economic reforms. This interaction is particularly important as Indonesian business associations are close partners with BIAC, creating a channel for continuous dialogue and collaboration.
Potential Implications and Benefits of OECD Membership
Should Indonesia successfully navigate the accession process, the benefits of full OECD membership would be substantial and far-reaching.
- Enhanced International Credibility and Governance: Membership would signify Indonesia’s adherence to the "gold standard" of policy-making and good governance. This enhanced credibility can attract greater foreign direct investment (FDI), reduce borrowing costs for the government and private sector, and strengthen Indonesia’s position in global economic negotiations. It would signal to investors and international partners that Indonesia operates within a predictable, transparent, and rules-based framework.
- Access to Best Practices and Policy Dialogue: As a member, Indonesia would gain unparalleled access to the OECD’s extensive research, data, and policy analysis across a myriad of sectors. This includes insights into cutting-edge policies in areas such as digital economy, climate change, education, healthcare, and public administration. Participation in OECD committees and working groups would facilitate peer learning and allow Indonesia to benchmark its policies against those of other advanced economies, fostering continuous improvement.
- Investment and Trade Facilitation: Adherence to OECD instruments, such as the Codes of Liberalisation of Capital Movements and Current Invisible Operations, would further open Indonesia’s economy to international investment and trade, while also providing protections for investors. This can stimulate economic growth, foster innovation, and create more competitive markets.
- Strengthened Fight Against Corruption: Membership would entail adherence to the OECD Anti-Bribery Convention and other anti-corruption instruments, reinforcing Indonesia’s ongoing efforts to enhance transparency and combat corruption. This would contribute to a more trustworthy business environment and stronger public institutions.
- Human Capital Development: Collaboration on education, skills development, and labor market policies with OECD experts could help Indonesia address its demographic challenges and ensure its workforce is equipped for the future economy.
- Environmental Sustainability: Adopting OECD environmental guidelines and participating in related initiatives would bolster Indonesia’s commitment to sustainable development and climate action, crucial for a country with vast natural resources.
Challenges and the Path Forward
Despite the significant enthusiasm and potential benefits, the path to OECD membership is fraught with challenges. The technical review demands rigorous policy adjustments and reforms across multiple sectors, some of which may require significant political will and institutional capacity to implement. Areas such as intellectual property rights, state-owned enterprise governance, certain aspects of labor laws, and environmental regulations may necessitate substantial overhauls to align with OECD norms. The process is not merely about ticking boxes but about institutionalizing reforms that are sustainable and effective.
The timeline for full accession can vary significantly, often taking between three to seven years, depending on the extent of reforms required and the political consensus among existing members. The June 2026 Ministerial Meeting represents a critical juncture, allowing Indonesia to showcase its commitment and progress. Following the technical reviews, a formal roadmap for accession will be finalized, detailing the specific steps and policy adjustments required. Only after all committees have endorsed Indonesia’s alignment with OECD standards, and the OECD Council unanimously agrees, will Indonesia achieve full membership.
Indonesia’s journey towards OECD membership is a testament to its ambition to integrate further into the global economic architecture and to uphold international best practices. It represents a strategic commitment to good governance, economic openness, and sustainable development, promising to reshape its economic landscape and bolster its international standing for decades to come.
