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Public Diplomacy And Expanding Indonesia’s MSMEs Worldwide: The Opening Of Teguk Outlet In New York – OpEd

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Today, digital development allows entrepreneurs, especially MSMEs (Micro, Small, and Medium Enterprises), to promote their products in various ways through social media such as Tiktok and Instagram to engage consumers, mainly millennials and Gen-Z. Usually, some MSMEs entrepreneurs endorse influencers to promote their products. However, not all of Indonesia’s MSMEs can survive in the Covid-19 situation. One of Indonesia’s successful MSMEs is Teguk. Teguk is part of the F&B (Food and Beverage) business from MSMEs, established in 2018. 

Teguk sells various items such as coffee, tea, and chocolate. But not only drinks, Teguk also sells authentic Indonesian foods like cuanki, seblak and odading. The low price and palatable taste makes Teguk popular in Indonesia. Teguk has more than 170 outlets spread all over Indonesia’s provinces. MSMEs played a vital role in Indonesia’s domestic economy. According to the Ministry of Cooperatives and SMEs, in 2018, MSMEs contributed about 61,1 percent of the domestic economy. In 2020 MSMEs’ role in the domestic economy slightly increased by about 61,97 percent.  

Not only in Indonesia, but Teguk is also expanding its global market by opening a store in New York last September. However, Teguk in New York sells a different menu than Indonesia’s. Teguk CEO Maulana Hakim stated that the Teguk menu, which is sales in New York, is 80 percent different from Indonesia. Previously, several Indonesian MSMEs products had successfully entered the USA market. In December 2021, The Secretary General of the Ministry of Trade said that seven US companies bought up Indonesian MSMEs products with a total of US$ 175 million. It proves that Indonesian MSMEs are demanded in the USA. 

Even though US and Indonesian stores have different menus, the Teguk store in New York still represents Indonesian special drinks such as coconut series and cendol. This is part of Indonesia’s public diplomacy by non-state actors. According to the World Atlas report in 2019, Indonesia occupied the first rank as a coconut producer, with a total production of 17,13 million tons. Besides that, Indonesia also exported coconut to many countries. BPS (Statistics Center Bodies) also reported that Indonesia’s coconut exports reached US$819,26 million as of the third quarter of 2020, exported to the US, Netherlands, South Korea, China, Japan, Singapore, and Malaysia. Through the coconut series menu, Teguk indirectly has shown Indonesia’s nation branding as a country rich in coconut. 

Along with the development of globalization, the state is no longer the only actor that can influence foreign policy if, in the past, diplomacy could only be carried out by the Minister of Foreign Affairs, Diplomats, and Consulates. Now by way of public diplomacy, everyone can be involved in playing out diplomacy, either state and non-state actors who can influence public opinion (Snow, 2009).

According to Nye, the diplomacy concept is not only meant by hard power as if threat and force, but there are other ways to reach interest through soft power diplomacy, which relies on culture, values, and ideology to influence the public (Snow, 2009). Culinary is one part of cultural diplomacy to build the image of a country. 

Public diplomacy through the opening of Teguk outlets in New York is certainly different compared to various soft power diplomacy that the Indonesian government often intensifies at formal meetings between countries or through international organizations such as through rendang diplomacy, which is often a mainstay dish in entertaining state guests or batik diplomacy, which was used as the dress code for the UN Security Council session in honor of Indonesia, which at that time became the Presidency of the UN Security Council in May 2019. 

Despite the opening of Teguk in New York, this is an opportunity to introduce Teguk to foreign countries because New York is the top destination city in the world. The start of the recovery process after the Covid-19 pandemic around the world in early 2022 made travel restrictions and regulations even more relaxed, making people travel to various countries, including New York. According to NYC & Company, it is estimated that 8.2 million foreign tourists will visit New York. Of course, this number significantly increased compared to last year’s 2.7 million foreign visitors. The strategic location of the Teguk outlet in the middle of New York City and the beautiful design of the outlet will undoubtedly make anyone interested in tasting it. With this, people-to-people diplomacy will be achieved.

As an F&B business that started as an MSME and has now succeeded in opening an outlet in New York, Teguk is an example that Indonesian MSMEs have great potential to compete in the global market to represent Indonesia’s nation-branding. However, Indonesian MSMEs face various challenges, including the lack of government support for MSME actors. 

So far, MSME actors have needed help getting access to formal funding. According to the Universitas Indonesia Economics Professor Rofikoh Rokhim, it is not enough to finance MSMEs but also to collaborate with various financial institutions to expand the access of MSME actors. In addition, Rokhim also said that one of the sustainable ways by financial institutions is to provide credit for MSME actors.

The distribution of bank credit for MSME actors in Indonesia is still minimal. According to the Minister of SOEs, Erick Thohir, Indonesia’s banking credit distribution for MSMEs is still at 20 percent. Erick also said this number is much lower than other Asian countries such as Thailand, which reached 50%, Malaysia at 51%, Japan at 66%, and South Korea at 81%. Therefore, although public diplomacy is through the expansion of MSME products to various countries, the government must provide funding support for the advancement of Indonesia’s MSME sector so that it can compete in the global market as other countries do.

Reference

Snow, N. (2009). Rethinking Public Diplomacy. In P. M. Nancy Snow, Routledge Handbook of Public Diplomacy (pp. 3-9). New York: Routledge.

Nurul Faqiriah has a Bachelor of International Relations with a focused study on diplomacy, and works at the Department of International Relations, Universitas Islam Indonesia.

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