Indonesia is key to Australia’s regional vision

The fanfare that greeted Joko Widodo – known as Jokowi – on his final trip as Indonesia’s president to Australia was well founded.

Over the past decade, Jokowi’s government has injected a new level of maturity and ease in the historically often temperamental Australia-Indonesia relationship.

Pragmatic and active engagement at senior levels of both governments has become the norm – crisis management is the exception. Even Indonesia’s concerns with AUKUS did not fundamentally derail this.

But as the Jokowi presidency enters its twilight, the search for depth in bilateral ties continues. Economic ties with our neighbour of 275 million people are anaemic. People-to-people links are underdone. And public attitudes in both democracies are largely indifferent to each other.

Above all, Australia will need to do more to convince Indonesia that it shares common ground strategically with its largest neighbour despite our markedly different outlooks on the region.

We’re a world away from Indonesia occupying the place it did in Australia’s strategic imagination circa 1995. Keating-era mythologies about the pre-eminence of the partnership have ossified into platitudes. But Australia has moved on from that era in profound ways.

Indonesia will remain a hedger of China even as Australia becomes ever more the balancer.

For Indonesians, the evidence of our divergence is plain to see from Canberra’s hardening views of China, intention to project force at greater distance, and decisive moves to bolster America’s balancing role in the region.

A cold acknowledgement has set in on both sides of the Torres Strait that Indonesia will remain a hedger of China even as Australia becomes ever more the balancer.

The differences in our regional strategies are not merely tactical. They are epistemic.

Indonesia is wary of China. But it does not view China as an existential threat. On balance, and despite standing up to Beijing in its territorial dispute over the Natuna Islands, Jakarta views US-China competition rather than Chinese unilateralism as the root of regional instability.

It follows that US-anchored minilateral coalitions such as the Quad and AUKUS are more often seen to contribute to the polarisation of the region.

Strategic returns

Many in Australia would gladly settle for a version of benign coexistence with Indonesia that allows both countries to agree to disagree and move on with their respective ventures. The high bar of bilateral success is often touted as Indonesia’s tolerance (with qualifications) for Australia’s quest for nuclear-powered submarines.

It’s tempting to think of Australia’s Indonesia diplomacy as the political premium we pay for getting on with the job of balancing China elsewhere in the region.

Critics point to India’s China-driven strategic congruence with the United States or the Philippines’ status as a US ally and its geography on the front lines of a potential flashpoint with Taiwan as reasons for why those countries offer more worthwhile strategic returns for Australia today.

By contrast, Indonesia’s strategic value to Australia is often defined only narrowly: in terms of the need to maintain maritime security and stable relations with the nation framing our northern approaches.

But discounting the broader strategic value of Indonesia for Australia would be mistaken for several reasons.

For one, it masks how Indonesia itself has changed under Jokowi. The country has historically fallen well short of its potential as a major power. But Jokowi – aided by his impressive foreign minister Retno Marsudi – has in recent years been a surprisingly activist leader on the global stage. Defence Minister Prabowo Subianto, a contender to replace Jokowi in 2024, has similarly played an unusually international role.

Indonesia has started to fill the diplomatic void in a region that is if not quite Sino-centric, certainly increasingly post-American. Data from the Lowy Institute Asia Power Index shows China, Japan and Indonesia each leads the US with a higher tempo of top-level diplomatic activity regionally.

Retno leads the international response on the Myanmar crisis, the region’s most protracted diplomatic and humanitarian impasse. But Indonesia’s role is not limited to South-East Asia. 

Jokowi notably held the G20 together in Bali last year by securing consensus on the “adverse effects” of Russia’s invasion of Ukraine – a diplomatic coup, given rife divisions among the world’s most important economies. He also deserves credit for starting to defuse US-China tensions by facilitating talks at the G20 between Joe Biden and Xi Jinping.

Indonesia, in other words, is not just relevant to Australia because it is proximate to us. It is relevant because it has growing global clout. It may not be the most aligned country for Australia. But on the basis of its heft alone, there is a good case for why its position on a range of issues should count for as much any of our leading strategic partners.

Continuity in outlook

In a “bazaar world order” we will need friends like Indonesia as much as we do India – both leaders of the disparate but increasingly salient Global South. And unlike the infamously yo-yo fluctuations of Philippine external policy – breathing hot and cold on its US alliance – we can at least count on a modicum of continuity in Indonesia’s approach to the world.

As the late Allan Gyngell was fond of saying, statecraft is the art of managing differences between states, so our country always has options. Fleshing out a broader common agenda with Indonesia will help us create space and more options.

Australia would be wise to see the broader strategic significance in both offers made by Jokowi this week: on lithium and visas.

Indonesia seeks our support for Indonesia’s nascent electric vehicle industry by obtaining lithium from Australia. This would start to unlock greater economic complementarity curiously missing between our two economies. It would also dovetail with efforts to diversify supply of Australian commodities through a China-plus-one strategy.

The second initiative, on visas, seeks to ease requirements for Indonesians travelling to Australia. Personal bonds between leaders in both governments are important in managing differences. But so too will be sustained people-to-people engagement. 

Indonesian officials at the highest levels see promise in Foreign Minister Penny Wong’s articulation of Australia’s search for a “strategic equilibrium” – balancing our deterrence objectives with restoring regional partnerships outside the US alliance framework.

Jakarta is quite prepared to work with this Australian dichotomy. So must we be.