What Australia Needs from Indonesia

By John McCarthy AO, Former Australian Diplomat

Australia-Indonesia Relations have enjoyed rare stability in recent years. But John McCarthy writes Australia needs much more – a strong and activist Indonesia that contributes to a multipolar region.

The visit to Australia this week of Indonesian President Joko Widodo – known as Jokowi – should give us pause to reflect on how Australia and Indonesia stand with each other and what the future holds.

Truth be told, the relationship has become a mite boring. Never mind. In this business boring is good.

Until a few years ago, much of the political energy each country had for the other was channelled into crisis management.

We watched with alarm Indonesia’s internal tribulations in the sixties. From the seventies until the nineties Indonesia’s actions in East Timor caused periodic eruptions. And then there were the terrorist incidents targeting Australians early in the century, particularly the Bali bombings in 2002.

And until a few years ago the sheer difference in our systems involved lengthy ruptures. We saw that in 2013 when the news broke that Australia had tapped the phone of then President Yudhoyono, his wife and members of his cabinet. Often it was because of consular issues – mainly connected with Bali – of which the executions of drug traffickers Andrew Chan and Myuran Sukumaran in 2015 were the most prominent.

This welcome monotony in the relationship owes something to serendipity, and perhaps something to a greater maturity of outlook in both nations. Jokowi’s essential pragmatism may also be a factor. He is the only Indonesian President since independence with a business background.

If this lack of fireworks continues, we should be diverted less by the need for crisis management and be able to focus more on what we want from the relationship.

According to the most recent Lowy Power Index, Indonesia is projected to be the world’s fifth biggest economy in PPP terms by 2030. Indonesia’s middle class is now over 50 million.

We must heed these things. As of 2021, each ranked as the other’s 13th largest trading partner. As a destination for Australian foreign investment, Indonesia ranked 27th; it was the 38th largest source of foreign investment for Australia.

Australian business has always been risk-averse about Indonesia. But other countries make money there. We need to do something about it.

Partly given the openings created by the 2021 Indonesia-Australia Comprehensive Economic Partnership Agreement, opportunities exist across the board – but particularly in health care, food and agriculture, education, and resources and energy services.

Then there is the role we would like to see Indonesia play in terms of regional security.

Indonesia has tended to be first among equals in Southeast Asia, particularly so when former president Suharto’s authority was at its height and the gifted Ali Alatas was foreign minister.

However, historically Indonesia has not always used its natural agency as a big country with an intelligent leadership as effectively as it might.

Its foreign policy has sometimes been clothed in the nebulous rhetoric of non-alignment or subsumed under the carapace of ASEAN solidarity. It has even been called a “small, big country” for having fallen short of its promise in the international domain.

Although Jokowi is known as a domestic president, he has done better than that.

He has displayed gumption in protecting Indonesia’s fishing interests from Chinese incursions off the Natuna islands.

In an ASEAN summit in 2019, he was a prime mover in asserting ASEAN’s role in maintaining peace and stability in the region in the face of increased competition between the United States and China.

As host of the G20 summit in Bali in 2022, Jokowi used his role to facilitate a meeting between Presidents Biden and Xi Jinping. He also brokered a concluding G20 statement on Ukraine despite obvious differences of approach in the group.

The question now – when the future of Asia is more at issue than at any time since the Pacific War – is what role does Indonesia play in regional security issues?

Many Indonesians do not much like China. They see the American presence as a counterweight to it.

But they acknowledge China’s rise and want China’s economic input.

Indonesia has accepted the Quad and AUKUS as facts of life – albeit with qualifications. Only last week, Jokowi urged these groupings to be “supporters of efforts to build peace and stability in the region” espousing “engagement not containment”.

Indonesia will never be a quasi-ally of Australia’s – and we should not seek that.

But we need of Indonesia more than fence-sitting neutrality. We need Indonesian heft.

We need Indonesia to use that heft to work with its fellow Southeast Asians to bring China and America back from the brink. This will involve more than engagement. It will involve activism. We need it as a strong pole in a multipolar region.

If Jokowi and his successors take such an approach, Indonesia would no longer be a small, big country, but a large, big one. In past generations, Australia might have regarded such a prospect with dismay. Today, we should welcome it.

John McCarthy AO is Senior Adviser at Asialink and former Australian Ambassador to the US and several Asian countries.