Indonesia’s choices and Australia

Australian Prime Minister Tony Abbott has labelled the Indonesian relationship as Australia’s most important relationship, full stop. This isn’t all diplomatic flummery

The notion is driven by the strategic understanding that getting the relationship with Australia’s closest neighbour wrong and failing to understand Indonesia’s growing influence in the region and the world will be costly to Australia’s interests in the long term. It should be added that Abbott surely also brings with his affirmation of the importance of the Indonesian relationship a significant measure of warmth and goodwill.

In human affairs there is always a little distance between precept and practice, but many in Australia and around the region, who wish the new Australian government well in its dealings with Asia, wonder how things could have gone so comprehensively wrong.

This week we launch the latest edition of East Asia Forum Quarterly on ‘Indonesia’s Choices’. It looks at Indonesia’s achievements, the economic and political choices it confronts going forward, and Indonesia’s role in the region and beyond. As Andrew MacIntyre and Maria Monica Wihardja, editors for this issue, observe, ‘Indonesia is an unambiguous economic success story. Sustained growth has lifted living standards, lowered the incidence of poverty, and underpinned social stability and political reform. By any measure, the past 15 years has been a period of extraordinary progress’.

Economic and political success has seen Indonesia’s regional weight and global potential grow significantly. Despite its 250 million people, it used to be a smaller economy than Australia’s; now in real terms it is bigger.

When Indonesia’s economy was smaller than Australia’s, and its security concerns remained inwardly focused, Indonesia had no cash to spare for air and naval forces, and little need for them as long as US primacy in Asia remained uncontested. It therefore never built the maritime forces without which an archipelagic nation can exercise little strategic weight — an internal economic as well as security weakness to which Djisman Simandjuntak alludes in his essay on gaining the velocity to escape the constraints on growth. As its economy grows Indonesia will have more money to spend on increasing its air and naval forces, and it will have more need for them.

For all the impressive gains, Macintyre and Wihardja note that there is a widespread sense, inside Indonesia, that the early pace of progress has fallen away; even that the country is now just marking time and waiting for whatever the 2014 electoral cycle might yield. There are worries about the infrastructural and educational bottlenecks to continuing growth. Mahendra Siregar, Herfan Brilianto, Djisman and others identify what needs to be done if they are to be dealt with.

‘Indonesia’s next president and next parliament will need to address these problems squarely, or economic momentum will ebb away’, MacIntyre and Wihardja point out. ‘The good news is that they will do so from within the context of a relatively established democratic system of government. The bad news is that Indonesia’s system of government is unwieldy, with authority and responsibility blurred between the executive and legislature, and between the national and local levels of government. Whatever the policy agenda, whoever the leaders, this is a difficult system to operate’.

In any case, already Indonesia has emerged as an active and effective player on the regional and even global diplomatic stage. Although it is likely the next president will be, either by temperament or necessity, more domestically oriented, Indonesia will remain pivotal to regional affairs. ‘Other countries — and none more so than Australia — need to recalibrate their mindsets about Indonesia. Even if Jakarta’s new-found pride and confidence periodically exceed its capacities, other countries — and, again, none more so than Australia — will find the costs of underestimating Indonesia increasingly painful’, MacIntyre and Wihardja conclude.

Hugh White, in this week’s lead from this issue of EAFQ, reflects on current problems in the Australia–Indonesia relationship over the spying scandal, despite all the well-motivated intentions for the relationship. The essence of his argument is that there is somewhat more to the problem than a new government in its early days on trainer wheels.

There is still a powerful current in thinking among Australia’s leadership that is innocent of the changes in Australia’s circumstance vis-a-vis Indonesia. That circumstance now prevents Australia from dictating the terms of the Australia–Indonesia relationship, as it perhaps once thought it could, to suit domestic political agendas and interests without taking into account Indonesia’s agendas and interests. Australia’s current government continues to dig its own grave over the offence it gave to Indonesia’s leadership by the way in which it handled the spy scandal, totally unnecessarily as President Obama’s handling of parallel issues with its European partners should have demonstrated emphatically. This is a problem for Australia, of course, that is not confined to Indonesia.

White concludes: ‘eventually, one way or another, the current crisis will pass and the relationship will return to “normal”. But it will not be without cost or consequences’.

That may be an optimistic conclusion.

Peter Drysdale is Editor of the East Asia Forum.