John McCarthy was Australia’s ambassador to Indonesia when militia lobbed Molotov cocktails into his embassy in Jakarta, physically assaulted him in Sulawesi and shot at his car as he drove across Dili. “It didn’t actually hit the car,” McCarthy told me, playing down the 1999 shooting encounter, which took place in the midst of bloody pogroms after the independence of East Timor. “It was just a sighting of a fellow taking aim and firing his gun.”
The bullet may not have hit his car but the former ambassador to Jakarta, New Delhi, Tokyo and Washington speaks with authority when he says Australian naval incursions, phone-tapping and related diplomatic furores have sunk the Australia-Indonesia relationship to its lowest point since 1999. Equally, when he says the relationship has the potential to recover quickly - because much bigger strategic imperatives are at play - it's a good time to sit up and take note.
The rise of China and China’s muscle-flexing on its maritime periphery are altering the strategic calculus of all nations across the Asia-Pacific. The force of rising China is acting to push Jakarta and Canberra closer together (and both of them closer to Washington) even as domestic political “irritants” are pulling them apart.
Indonesia has had a vexed relationship with China since new republics were established in both nations within three months of each other, in 1949. While sticking to an ostensible policy of "non-alignment", Sukarno steered Indonesia towards Beijing and his replacement, Suharto, swung hard the other way. Now in the democratic era, with presidential elections due in July, Indonesia’s foreign policy neutrality is under strain again.
Most pointedly, Indonesia’s policy of non-alignment is being challenged by armed Chinese maritime law enforcement vessels contesting the right of Indonesia to detain Chinese fishermen in the Natuna Islands region, which lie west of Singapore and 2000km south of mainland China. This year, in response, Indonesian leaders have broken with their tradition of public reticence to voice concerns.
In February, one day after a visit by US Secretary of State John Kerry, Foreign Minister Marty Natalegawa warned China against attempting a repeat of the Air Defence Information Zone which it established last year in the East China Sea, prompting protests from the US, Japan and Australia. “We have firmly told China we will not accept a similar zone if it is adopted in the South China Sea,” said Natalegawa.
The same month the commander of the Indonesian Armed Forces (TNI), General Moeldoko, returned from visiting Beijing to advise he would increase air, land and maritime forces around Natuna in order to “anticipate possible infiltration as a result of instability in the South China Sea”.
And last month a senior defence strategist, Commodore Fahru Zaini, warned against China’s "map warfare", as others have called it, by which China is hardening previously amorphous claims to a vast expanse of the South China Sea. "China has claimed Natuna waters as their territorial waters,” he said. “This dispute will have a large impact on the security of Natuna waters.”
This series of public comments shows that Indonesia has altered its public stance if not its underlying strategy. “I would characterise this as the public expression of undeclared policy on China,” says Greta Nabbs-Keller, who wrote her PhD thesis on Indonesia-China strategic relations and is director of a consultancy called Dragonminster.
China has been put on notice that the harder it pushes its territorial claims the more Indonesia will stretch its famously malleable policy of non-alignment in the opposite direction. "I explained that we are a sovereign country, we will protect our territory, and we will do whatever is necessary to protect our sovereignty,” Commander Moeldoko said this month, recounting his earlier exchanges in Beijing.
Like Australia, Indonesia’s policy is to engage with China wherever and whenever it can, including welcoming Chinese investment, while strengthening regional ties and pushing back when China’s demands are deemed unacceptable. It’s a hedging policy that will wax and wane with China’s actions, especially around the Natuna Islands.
Last week 20 Asia-Pacific nations including China, the US and Indonesia signed a code of conduct to improve communication to prevent naval encounters accidentally erupting into conflict. The code was proposed a decade ago, by Australia.
Former ambassador McCarthy says this is the kind of constructive response to evolving strategic imperatives that should force Jakarta and Canberra to transcend the domestic issues that regularly flare between them.
“You could argue that we could have a reversion in our relationship with Indonesia to the sort of pattern that was extant in the 1960s and 1970s,” says McCarthy, referring to an era when global and regional strategic concerns trumped local political ones. “I think you could see a reversion to this as tensions increase in the East China Sea and South China Sea," he says. “We have to concentrate on serious issues which reflect national interest rather than play games, with the Australian side showing how tough we are and the Indonesian side allowing national sensitivities to weigh too heavily."
John Garnaut is Fairfax's Asia-Pacific editor.