TIM LINDSEY and DAVE MCCRAE. Australian-Indonesia: strangers next door

At the weekend, Prime Minister Malcolm Turnbull will meet with President of Indonesia Joko Widodo (Jokowi) on the margins of the Australia-ASEAN Special Summit. Although Turnbull seems to have built the positive personal relationship with Jokowi that eluded Tony Abbott, managing the bilateral relationship won’t be any easier for Turnbull than his predecessor.

The fate of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) illustrates the difficulties Turnbull faces. The signing of this agreement, under negotiation for almost a decade, was originally expected to provide the fresh “announceable” development that such meetings between leaders demand.

Although the signing may still happen, its likelihood has been descreasing for some months, all the more so as senior Indonesian ministers told the press on Tuesday that talks remain deadlocked.

Even if a deal is finally signed off, implementing it will be just as hard as its negotiation – maybe even more so. For all Jokowi’s repeated rhetoric of Indonesia being “open for business”, in reality his country remains strongly protectionist.

In part this is due to a tradition of populist mistrust of foreign capital, stoked by increased nationalism since the presidential elections of 2014. It is also partly because of a too-often corrupt and obstructionist bureaucracy, and a result of wealthy oligarchs’ capturing much of the political process and a good slice of the media too.

Jokowi’s promises count for little if these oligarchs choose to stymie deregulatory reform. The gap between his reformist policy announcements and the wicked problems foreign investors still face on the ground remains enormous.

Of course, the difficulty of developing bilateral economic ties cannot solely be attributed to Indonesia’s challenging business environment. Australia’s business underperformance in Indonesia is also a result of the persistent popular misunderstandings of the country that led Australians to ignore our shared geography and miss out on the benefits of Indonesia’s 5% growth and much-predicted boom.

This creates a vicious circle. As Dave McRae and Diane Zhang argue in their contribution to our newly published volume on Australia–Indonesia relations, Strangers Next Door?: Indonesia and Australia in the Asian Century, Australia’s shallow economic ties with Indonesia leave nothing to counterbalance popular security fears about Indonesia. The Indonesian diaspora in Australia is surprisingly tiny given their home country’s enormous size and close proximity.

Popular anxiety about Indonesia in Australia was also aggravated by the rise of racial and religious identity politics evident in the Jakarta gubernatorial election last year, which saw the Christian ethnic Chinese incumbent Ahok imprisoned for blasphemy.

In fact, Indonesian Islam’s growing social and moral conservativism could become even more problematic for our relations with Indonesia. Having finally managed to legalise same-sex marriage, Australians will react badly if the Indonesian legislature’s current plans to amend its Criminal Code to criminalise homosexuality are successful. This has the potential to trigger an international tide of criticism against Indonesia, which will probably only strengthen anti-foreigner sentiment.

Fear and anxiety works both ways. Australia’s popular reputation in Indonesia is also often poor. A persistent perception of Australia as firmly “white” feeds nationalist suspicions of its supposed neocolonial motivations in dealing with Indonesia.

Papua will therefore continue to be a major fault line in the relationship, sitting at the intersection of powerful and often conflicting ideas about human rights and national sovereignty in the two countries. Many Australian activists who lobbied for democracy in Indonesia and self-determination for East Timor now see Papuan independence as a similar cause, infuriating Indonesian leaders.

Indonesian suspicions about Australian ambitions also dovetail neatly with nationalist scepticism of Australia’s significance to Indonesia, given the latter’s economic and geopolitical “rise”. This is manifest in the frequent comments of Indonesian opinion-makers to Australians that, “You need us more than we need you,” or, as Indonesia rises, “You need to show us why you matter.” As then DFAT secretary Dennis Richardson wrote in 2012, a wealthier and more confident neighbour makes it “increasingly difficult for Australia to gain the attention of Indonesian decision-makers, to the extent that we think our interests might warrant”.

There are plenty of other human rights and criminal law issues on which Australians and Indonesians frequently do not see eye to eye, including the death penalty and drugs sentencing. Asylum-seeker policy is another obvious fault line.

Amid this turbulence, bilateral ties have grown incrementally broader and, in a range of respects, warmer, since Indonesia democratised in 1998. Turnbull’s regular meetings with Jokowi and the annual “2+2” defence and foreign ministers meeting, which will accompany the ASEAN summit this weekend, are each part of the wide range of government cooperation has developed. Nevertheless, the two-way tensions, fears, and misunderstandings signal that bilateral ties face a bumpy ride ahead.

In fact, there is a real risk that as the Asian Century rolls on, Australia and Indonesia may find themselves largely going their separate ways.

Preventing this from happening, and deriving some benefit for Australia from Indonesia’s fast-moving transformation, will be a huge challenge for Turnbull, regardless of his personal rapport with Joko Widodo. IA-CEPA would be a nice start, but don’t hold your breath.

Tim Lindsey and Dave McRae are the editors of Strangers Next Door?: Indonesia and Australia in the Asian Century, published by Hart Publishing in February.

This article first appeared in the Lowy Institute’s The Interpreter

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One Response to TIM LINDSEY and DAVE MCCRAE. Australian-Indonesia: strangers next door

  1. Andrew Farran says:

    Just because we are neighbours doesn’t assure compatibility or mutual potential. The differences between Australia and Indonesia as societies are profound and highly sensitive. The relationship will not be advanced far from top down no matter how sophisticated the artificial institutional structures evolved for the purpose.
    Indonesia is not resolved within itself which means that its domestic systems contain anomalies which defy credible legal process and the rule of law as we know it.

    Our legal system does not permit Australian business to function effectively within Indonesian practice. The best that can be achieved is an even, one for one, bargain, equal both ways. Once it is stretched it breaks down. Some investors learned this in the 1960s. What’s changed? If anything, because of arbitrary religious pressures and governmental feebleness, the tensions have increased. Indonesia is not a mature society by any standards. It will be a long wait before it is.

    Meanwhile, pragmatism, not far fetched political architecture, should guide policy. At the inter-governmental level it is to be hoped that Indonesia and other Southeast Asian countries will participate in multilateral arrangements in accordance with general understanding of their obligations.

    ASEAN itself has become a joke. A former Indonesian foreign minister, Marty Natalegawa, has recognised its serious short-comings and is content for the time being that it simply exists. Today in Sydney we are treating with courtesy representatives of counties led by people who should be fronting the International Criminal Court or other criminal courts for serious fraud. There is hardly one among them that has clean hands. The pity is that we are not an exemplar of good government either.

    I recall the high hopes held for regional arrangements when ASEAN was formed in the 1970s. As with much else in the international sphere what we now see, in all regions, is more than a little disappointing.

    Sent from my iPhone

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