Thursday, July 7, 2016

The future of Australia-Indonesia relations - How will Australia’s domestic political deadlock affect ties between the two nations?


Results from the 2 July Australian federal election still remain unclear. At this stage it seems likely that the Coalition will form either a majority or minority government. But what does a domestic political deadlock have to do with Australia’s nearest neighbours?

Both major parties, the Liberal/Nationals Coalition and Labor, had very little to say about foreign policy throughout the election campaign. However, the Coalition placed greater emphasis on the bilateral relationship with Indonesia.

Its platform focused on deepening this through ‘economic diplomacy’, which includes continuing talks on a comprehensive economic partnership agreement, and looking towards negotiating a free trade agreement in the future.

In contrast, Labor barely mentioned Indonesia as its policy proposals have focused on development and foreign aid. In its national platform, Labor recognised that Indonesia ‘provides scope for increased trade and economic activity as well as deepening social and cultural ties.’

There is not a great deal of policy distinction between the major parties as economic engagement provides the key focal point. Indeed, it is often observed that there is a strong degree of consistency in Australia’s foreign policy approach irrespective of which party is in government.

In the context of a possible minority government, Nick Xenophon has been a notable critic of Indonesia, particularly in relation to the Bali Nine executions. But it does not seem likely that minor parties or independents would have the influence to significantly shape or alter Australia-Indonesia relations over the next three years. Yet, the re-emergence of Pauline Hanson in the Senate may concern Southeast Asian states, and in particular, her anti-Islam rhetoric may cause a headache for Australia and Indonesia relations.

Arguably, the most important unresolved issue that will impact on bilateral relationship is who will be Prime Minister.

Malcolm Turnbull’s long-term continuation in the role currently looks dubious, even if he does manage to pull off a slim Coalition majority victory. In terms of Australia’s relationship with Indonesia, this is likely to matter as Turnbull has been much better received in Indonesia than his predecessor, Tony Abbott. In a speech delivered in March 2016, Turnbull declared it ‘a personal foreign policy objective’ to strengthen ties with Indonesia.

In November 2015, Turnbull’s first trip as Prime Minister was to Jakarta as part of a five state tour. This was viewed as a strategy to mend relations after a long series of scandals, beginning with the Julia Gillard-led Labor government’s ill-advised decision to stop live cattle exports in 2011.

In 2016, there has been a notable calming of bilateral tensions. However, the government have been almost exclusively focused on domestic politics. Australian leaders know, at least on the surface, the importance of the bilateral relationship, as this is demonstrated in political rhetoric and symbolic acts of recognition, such as the first prime ministerial visits (it is valuable to recall that Prime Minister Abbott’s first overseas trip was also to Jakarta). The Indonesia and Australia bilateral relationship is also not short on high-level dialogues, forums and summits. And yet despite this, the relationship has suffered repeatedly.

Following the live cattle export scandal, the Abbott government oversaw allegations of Australia spying on Indonesian President Yudhoyono and his wife, the Bali Nine executions, and Indonesia’s dissatisfaction with the Coalition’s boat tow-back policy and people smuggling payments.

What these incidents have in common is a willingness of political leaders to sacrifice the long-term interest of maintaining a good bilateral relationship for domestic political interests, often through impulsive and reactive decision-making and rhetoric. This is especially the case when leaders are threatened by a lack of electoral legitimacy, which has happened in both Australia and Indonesia.

Getting the right balance between domestic and international priorities in the ‘two-level’ game of politics is necessary for maintaining the current period of diplomatic calm. Indonesia and Australia’s relationship is stronger when there are overlapping strategic or security concerns. This is evident, for example, in the counter-terrorism security cooperation that developed after the Bali Bombings of 2002. Since 2014, the threat of ISIS has once again made counter-terrorism a top priority for both states.

However, in other areas, interests appear to clash. The most significant of these areas is, and will continue to be, asylum seekers. For the major Australian parties, the domestic interest in maintaining ‘border security’ has become paramount, while Indonesia views Australia’s unilateral policy as threatening its maritime sovereignty and undermining a regional solution.

A key question is whether strengthening trade and economic engagement will work in improving relations. Indonesia is projected to become the world’s fifth largest economy by 2030. As a neighbouring state with a large population and a growing middle-class, Australia looks to Indonesia as an expanding market, and yet developing stronger trade and business links has long been a significant challenge.

There are risks in presenting Indonesia merely as a ‘market’: barriers to trade are deep and there is a narrative in Indonesian civil society that Australia is exploitative, which economic diplomacy runs the risk of confirming. Economic diplomacy needs to reassure Indonesians that developing stronger economic links is for mutual benefit.

A ‘good relationship’ should not be taken-for-granted by either state; it needs to be actively cultivated across various levels of engagement.

Dr Rebecca Strating is a lecturer of Politics at La Trobe University. She teaches and researches Southeast Asian politics and international relations and will be speaking at a panel in Melbourne on 7 July: Indonesia at the Crossroads.


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