When Barack Obama visited Jakarta last November, he was met by a throng of excited crowds eager to catch a glimpse of the American President, who for a time called the bustling Southeast Asian city home. The international media heaped praise on Obama’s soaring rhetoric, but they largely missed another state visit to Indonesia just days before. In what the New York Times called “a not-so-subtle challenge to Mr. Obama,” the head of the Chinese National People’s Congress, Wu Bangguo, arrived with something a little more concrete: US$6.6 billion in infrastructure investments.
The contrast neatly encapsulates Indonesia’s foreign policy dilemma. Indonesia must balance lucrative economic ties with China against a strengthening strategic partnership with the United States. While Obama’s visit gave Indonesia diplomatic kudos, Wu’s bought the growing nation much needed dollars. Two-way trade between Indonesia and China more than doubled to US$25 billion a year between 2005 and 2009, on the back of a boom in exports from natural resources rich Indonesia to energy hungry China. Despite concerns among many Indonesians about the effect of freer trade with China on Indonesian jobs, especially the new ASEAN-China Free Trade Agreement, the Indonesian government is zealously courting Chinese investment.
At the same time, Indonesia is wary of China becoming too powerful. Indonesia knows that China is not yet large enough to control Southeast Asia. But it is alarmed by China’s recent assertiveness – especially in regards to its territorial claims in the South China Sea. Indonesia’s economy is growing and it is emerging as an active middle power on the global diplomatic stage. But it is still dwarfed by its northern neighbour. China’s US$5 trillion economy is 10 times the size of Indonesia’s, and in 2009 Beijing’s military expenditure was 20 times the size of Jakarta’s. As an archipelagic nation straddling the Indian and Pacific Oceans, Indonesia worries that a powerful China could one day use its military might to protect the Southeast Asian shipping lanes it relies on for much of its energy and natural resource imports— some of which lie in Indonesian territorial waters.
To assuage its fears, Indonesia is actively encouraging the United States to renew its focus on Southeast Asia. Indonesia was quick to welcome America’s offer to mediate in the South China Sea disputes. Jakarta knows that as long as America remains the hub of the Asia-Pacific security architecture, China won’t be able intimidate Southeast Asia. Both Indonesia and the United States believe that by developing bilateral and multilateral relationships they will be able to balance against a growing China and preserve the regional status quo. To this end, Indonesia strongly backed America’s involvement in the East Asia Summit and the ASEAN Regional Forum.
Despite America and Indonesia’s growing affinity — they are now the second and third largest democracies in the world after India— their relationship is not a natural fit. Indonesia is still too proudly independent to be beholden to the United States.
Thanks to memories of colonialism and Japanese occupation during World War II, Indonesia has long resisted domination by external powers. It was a founding member of the Association of Southeast Asian Nations (ASEAN) in 1967, whose raison d’être was to form a united front against the Cold War superpowers, America and the Soviet Union. For Indonesia, managing relations with the United States and an emerging China is a delicate balancing act. Jakarta does not want be forced to choose sides, and is quick to play down any suggestion of strategic competition developing between the superpower and its emerging challenger.
For now, Indonesia is happy to have the United States act as a counterweight to China in the region. But it does not want China to be contained or isolated. Indonesia wants to pursue an active and cooperative economic relationship with Beijing, but will still balance against China’s rising power. Indonesia recently took over as the chair of ASEAN, and has already thrown itself into the role with gusto. As the largest country in Southeast Asia, and with growing diplomatic clout, strategists in Jakarta sees the ASEAN chair as an opportunity to chart the tricky course between forging closer economic ties with China and ensuring America’s active role in the region.
If it succeeds, Indonesia will truly emerge as a key player in Southeast Asia’s regional security.
By Jessica Brown Research Fellow at the Centre for Independent Studies (CIS), an independent Australasian public policy think-tank. Opinion Asia
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