AFTER a gap of 19 years, Indonesia is again hosting the summit of the Asia-Pacific Economic Cooperation (Apec). As a giant in the world economy - encompassing approximately 55 per cent of global gross domestic product and about 44 per cent of world trade - Apec has the weight to be an influential global player.
Thus, the Apec summit in Bali from Oct 2 to 8 offers Indonesia an extraordinary platform to showcase its strengths, exert influence and project leadership.
But Apec is facing challenging times.
How best can this year's chair, Indonesia, show leadership?
Apec is unique because it alone brings together all the leading players in the broad Asia-Pacific region. Its 21 members include the US, China, Japan, several Asean countries, Australia and even a few Latin American economies.
The summit takes place at a time when Apec is confronted by persistent questions about its very relevance.
Does it still have a place in a region characterised by a large number of competing regional organisations such as Asean, Asean Plus Three, the East Asia Summit, the Shanghai Cooperation Organisation and so on?
The fact that some of these organisations emerged after the formation of Apec could suggest that their members found Apec wanting and so sought to create organisations that were smaller and perhaps more effective at addressing their concerns. After all, Apec has been roundly criticised as nothing better than an expensive talk-shop that has failed to achieve anything meaningful in its two decades of existence.
The challenge for Indonesia is to deliver something from this summit which demonstrates Apec's continued relevance.
Several developments have complicated Indonesia's task.
First, worsening geopolitical tensions in the Asia-Pacific region have raised concerns over the willingness of countries in the region to work together.
China and Japan are engaged in a stand-off over disputed territorial waters in the East China Sea and Japan and South Korea are also engaged in a dispute over an island which both claim. Closer to home, fellow Asean members such as Vietnam and the Philippines face a similar dispute with China. And the latter is proving to be far more assertive and uncompromising than before.
Second, the current instability in financial and currency markets has caught emerging economies such as Indonesia flat-footed, with some analysts even warning about a recurrence of a financial crisis similar to that of 1997.
The currencies of several emerging market economies have fallen sharply, as have equity and bond prices. Indonesia has been particularly badly hit, with the rupiah under continuing pressure.
As a result, these countries are looking for policy responses which can help overcome the immediate financial problems. They would also like to see a more fundamental reform of the international financial architecture.
The third development complicating Indonesia's task is the growing instability in the Middle East. With oil prices rising, Asia-Pacific nations are being reminded once again of the need to diversify their sources of imported energy to reduce their vulnerability to events in that troubled region.
Beyond the immediate concerns with the price of oil, there is also the need for an energy policy that balances the need to address climate change against the desire to maintain high economic growth.
Apec could make a difference here. Other regional organisations have not tackled the issue, and Apec is in the unique position of bringing together important players in the climate change arena such as the US and China.
The latter two countries are also critically important to any discussion about shale oil and gas. The sharp increase in shale gas production is very important in the Asia-Pacific region because natural gas prices are inordinately high.
Any arrangement that, for example, enables the US to export its surplus gas to Asia would help bring energy prices down and boost the competitiveness of Apec members.
What should Indonesia do?
Indonesia has set itself ambitious goals for the Apec summit. The foreign ministry has rightly said that a measure of Indonesia's success at the summit would be in obtaining "visionary and practical deliverables".
Indonesia has said that it wants to promote the Bogor Goals adopted when it hosted the 1994 summit. These aim to liberalise trade and investment in developing countries by 2020.
Another major Indonesian goal is to secure agreement on an Apec-wide "Infrastructure Investment Framework for Connectivity" as well as a proposed "Apec Guidelines on Delivering Bankable Projects". These are designed to develop the more robust private sector financing essential to ensure that the region's infrastructure needs are met.
But while such aims are commendable, Indonesia could probably do much better if it addressed issues of more immediate concern to member states. In this respect, there are two areas where Indonesia might be able to make a difference.
First, Indonesia could press the developed members of Apec, such as the US, harder on proposals to reform the international financial system so that the interests of developing countries in the region are better protected.
This is an important issue given the disturbing volatility in financial markets as global investors pull capital out of Asia-Pacific financial markets
Second, Indonesia could expand its proposal for connectivity to include the issue of oil and gas exports from energy surplus economies in the region to the energy importers. The US, for example, is still debating whether and how to export its surplus gas.
Indonesia gets an opportunity to make sizeable difference to Apec only about once in 20 years. It should seize this opportunity to ensure that Apec remains relevant to its members.
The writer is the president and CEO of PT Pertamina (Persero) and a member of the Apec Business Advisory Council.