Indonesia: Low Profile, High Stakes

As the world’s most populous Muslim-majority country, the largest country in Southeast Asia, and the closest Asian nation to Australia, Indonesia is at great liberty to pick sides in this theater of geopolitics. However, throughout its modern history, it has refused to do so. Now, as the world begins to wake up to Indonesia’s vast potential, nearly seventy years of non-alignment will be tested.

In 1955, the Javanese city of Bandung hosted a conference of 29 Asian and African states, and became one of the birthplaces of non-alignment. The nations agreed upon ten principles, including a commitment to refrain from serving preeminent global powers and a desire to settle international disputes peacefully and diplomatically. Since then, Indonesia has been largely successful in maintaining its independence. Current President Joko Widodo’s foreign policy has included the preservation of good relations with both the West and China. Indonesia has arguably moved closer to both sides under his leadership, but this trend may prove untenable.

A Balancing Act

In December 2021, Indonesia became the first Southeast Asian country US Secretary of State Antony Blinken visited on his tour of the region, and for good reason: Indonesia holds the presidency of the G20 this year. Indonesian Foreign Minister Retno Marsudi emphasized the two nations’ shared value of democracy along with continued security and economic cooperation. As a testament to that commitment, the annual Garuda Shield joint military exercises are expanding this year to include soldiers from twelve more countries, including Australia and Japan.

Indonesia’s other major partner, China, has not taken a liking to growing military activity in the South China Sea region, which it almost entirely claims as part of its territory. In June 2020, Indonesia refused China’s offer to negotiate maritime boundaries and conducted a military exercise the following month near the Natuna Islands, just beyond Chinese-claimed waters. China has demanded that Indonesia stop drilling for oil and natural gas in the region, but Indonesia has doubled down by making plans to turn the Natuna Islands into a special economic zone. It remains to be seen how China will respond.

Still, both sides have refrained from centering their relationship around this dispute. In fact, 2021 saw China increase its investment into Indonesia by 11 percent, becoming the second-largest source of foreign direct investment behind Singapore. As of September 2021, over 80 percent of COVID-19 vaccines in Indonesia were produced in China. In addition, numerous infrastructure projects in Indonesia are part of China’s Belt and Road Initiative, including a high-speed railway between Jakarta and Bandung. Even though China and Indonesia may not be the best of friends, China has contributed to Indonesian development in a way the US has been unable to do as of yet. It is true that Indonesia has not risen to the levels of the “global maritime fulcrum” Joko Widodo promised it would become upon his ascendancy to the presidency. Still, the country is certainly playing a balancing act by engaging with the world’s two main powers on different fronts, but not fully committing to either.

In terms of other important neighbors, there may also be hope for re-engagement with Australia following the election of Anthony Albanese as prime minister. Even though Australia is geographically better positioned than any other major economy to partner with Indonesia on a strategic level, making inroads in the region has not been a focus of previous administrations. Over the past decade, Indonesians’ trust in Australia fell from 75 to 55 percent. The sentiment was shared by the Indonesian Ministry of Foreign Affairs, which criticized the AUKUS security pact between Australia, the United Kingdom, and the United States, specifically Australia’s acquisition of nuclear-powered submarines. Albanese, however, pledged $140 million in infrastructure and climate resilience support to Indonesia within two weeks of taking office. Even with security concerns and an increased belief that Indonesia is developing fast enough to not need Australia, the relationship can be reset if this new administration can help Indonesia deal with pressing issues like climate change. In that sense, Indonesia’s attitude towards Australia is similar to its attitude towards China.

Internal Struggles

All this jockeying for influence comes at a time when Indonesia has no shortage of ambition. As Jakarta sinks beneath the burden of climate change, a change of capital is being planned; Indonesia’s government hopes to eventually relocate its capital to a new city called Nusantara, on the more central island of Borneo, in a $35 billion project. However, much of that cost will be passed on to public-private partnerships and investors. As a result, debate has ensued over how big of a role China will play in the construction of the new capital. A nearby planned green industrial area is already mainly supported by Chinese and Emirati investors.

However, concern over China’s level of influence goes beyond a desire to remain non-aligned; as of 2018, nearly half of Indonesians held a negative view of China. These sentiments date back to years of intolerance towards Chinese Indonesians, which have notably flared up during times of discontent. In fact, the May 1998 riots, which resulted in the resignation of longtime dictator Suharto, were characterized by widespread violence against ethnic Chinese. Suharto’s own rise to power came through a 1965 coup suspected to have been incited by Chinese-supported communists, despite the ties of non-alignment that had historically bound China and Indonesia. While anti-Chinese sentiments originated from the ethno-nationalists’ perception that Chinese culture was incompatible with Indonesian values, these sentiments are gaining influence today through humanitarian issues, such as China’s treatment of Uyghurs, who are predominantly Muslim. These attitudes have not trickled upwards into the higher echelons of government, which has appreciated China’s vaccine diplomacy, but public perceptions have soured over the past few years, likely due to the Xinjiang issue and concerns over Chinese immigrants taking jobs away from ethnic Indonesians. If the latter trend continues, there could be pressure for Indonesia to align itself with Australia and the US or, perhaps more likely, to forge its own path.

As lecturer I. Gede Wahyu Wicaksana argues in East Asia Forum, though, Indonesia’s foreign policy under Joko Widodo, better known as Jokowi, has been ambiguous rather than independent. Non-alignment for the sake of non-alignment may not necessarily be the best option for Indonesians. In fact, recent developments have pointed to legacy-building as Jokowi’s ultimate goal, with Nusantara at its center. For months, there has been speculation that Jokowi will attempt to run for a third term, which is currently forbidden by Indonesia’s constitution. While he has repeatedly tried to shut down the narrative, it is not hard to see why there are concerns, especially since those attempts have not been crystal-clear. Jokowi is a widely popular leader, garnering nearly 70 percent approval as of May 2022, but just 20 percent want him to try to remain in power. Some of his cabinet members have voiced support for the 2024 elections to be delayed, citing the setback of the COVID-19 pandemic.

Indonesia is the world’s third-largest democracy by population — just behind the United States — but it is arguably a fragile one. Indonesians have been electing their presidents for less than two decades, and democratic backsliding has already taken a foothold in Southeast Asian nations, such as Thailand and  the Philippines. A more authoritarian Indonesia would certainly add tension to its relations with Western democracies, but it remains a distant possibility for now.

Big Decisions

Given all of the geopolitical issues that Indonesia faces, can the country continue to keep a low profile on an international level? If Indonesia truly wants to be seen as a leader in Southeast Asia, that may no longer be possible. In order to prevent other countries from thinking that they have the upper hand, Indonesia will need to use clear and pointed rhetoric when standing up to perceived security threats like the AUKUS deal and China’s claims over the South China Sea. November’s G20 summit in Bali provides a valuable opportunity for Indonesia to make its perspective known. On the global stage, Indonesia will have the world’s attention as it voices concerns and reactions to issues that may not directly involve it, such as Russia’s war in Ukraine.

Furthermore, greater international visibility will enable Indonesia to bring local issues such as renewable energy and climate change to the fore. While the country is still largely dependent on coal, the Nusantara project and the establishment of emission reduction targets suggest that the government has recognized the need for change. As demonstrated recently, more powerful nations are starting to see how investing in Indonesia can be a mutually beneficial process. It seems inevitable that the larger Southeast Asian and South Pacific power struggles will be magnified once Indonesia’s time chairing the G20 is over, but Indonesia is truly a wildcard: an agent in its own right. Voices both inside and outside Indonesia are calling for greater clarity, whether with regards to perceived Chinese overreach, military partnership with the West, or the future of democracy. These upcoming months appear to be an opportune time for that clarity.