Indonesia and Australia

Apr 10, 2019

On 17 April Indonesia goes to the polls. Shortly thereafter Australia will do the same. We will again need to think about  Indonesia.          

In the Indonesian presidential election, the odds favour the incumbent, Joko Widodo, known as Jokowi, over his opponent the controversial former General Prabowo Subianto who is running against Jokowi for the second time.

This election takes place as a new generation of leaders emerges which has been nurtured politically since the fall of President Suharto. These figures include Prabowo’s running mate, the billionaire businessman Sandiaga Uno and some young governors and mayors.

If Jokowi wins, he will not be the neophyte of five years ago, grappling with the byzantine practices of the Jakarta political class. As a quintessential politician, he will be guided by the currents of the time –as he showed with his determination to execute Chan and Sukumaran and with his hands off approach to the blasphemy case against his former protégé and Governor of Jakarta, Basuki Tjahaja Purnama (Ahok). But he will be less cautious in his internal political dealings and may be more prepared to take risks.

Economic policy probably won’t change much. He will continue to emphasize as priorities, infrastructure growth and education, skills and productivity. On economic reform generally, he will be impeded by the continuing power of vested interests and lack of fiscal space. Overall growth will probably chug along at about 5%.

But while long term forecasts on Indonesian growth, for example that Indonesia will the 4th biggest economy in PPP terms by 2040 may not be borne out precisely, they should not be too wide of the mark . This means that in two decades the Indonesian economy could be roughly the same size as Japan’s.

Political Islam will continue be a force which Indonesian leaders ignore at their peril. This is why Jokowi abandoned Ahok and why he chose as his running mate the elderly conservative cleric Ma’ruf Amin.

Jokowi has never focused much on external issues beyond economic questions. But irrespective of his personal interests, his government will have to think hard about China.

Indonesia’s approach to China is different to ours.  It is less concerned about alleged security threats from China and formally favours strategic equidistance between the United States and China. It is more worried about Chinese economic penetration in Indonesia derogating from its sovereignty and the presence of Chinese labour –views linked to historic ethnic tensions.

If against the odds, Prabowo wins, an unhappy fact that the world is getting used to problematic leaders might blunt the shock. There will also be certain constants shaping our policy towards Indonesia, for example our economic relations; our common security interests; and the role of Islam .

But problems would arise from Prabowo’s unpredictability. He is a political chameleon with few principles. For western countries, particularly Australia, his questionable human rights record would be an issue in receiving him.

Post elections in both countries, Australia should focus on several things.

The officials currently managing Indonesia policy are very good at their jobs. But the personal relationship at the top is crucial, as Paul Keating showed with President Suharto, John Howard in his latter years as Prime Minister with President Yudhoyono, and Malcolm Turnbull with Jokowi.

If we are effectively to further our interests, we have to keep our dealings with Indonesia on an even keel. We should not make avoidable mistakes, EG. the cattle ban or the Jerusalem episode, which interrupt the flow of the relationship

We need to embrace the emerging leadership of Indonesia which is likely to be less Jakarta-centric than before. Our widened representation in Indonesia, including offices in Bali, Surabaya and Makassar will help. .

Having at last concluded an Economic Partnership Agreement, we cannot impede its ratification process, as Labor suggests it might.

We should also take two pages out of the book on our relations with India.

As espoused by Labor, we need an examination of economic opportunities in Indonesia akin to that undertaken in the report on India concluded last year by former DFAT Secretary, Peter Varghese.

We should also put in place a well funded science, technology and innovation program like the Australia-India Joint Research Fund. The program highlights the excellence of Australian research, we learn from it, and in the education sector balances our thirst for earning income from foreign students’ fees.

We will doubtless continue to cooperate successfully with Indonesia on Islamist terrorism. But we could show prudent pragmatism by better engaging the more radical side of political Islam in Indonesia, including by developing programs to bring its leadership to Australia.

We deal effectively with Indonesia on security issues. But in an era of increased global and regional uncertainty, the perspectives of our biggest neighbour on regional change assume more importance.

Finally, it is time yet again to press for a long-term effort to educate the Australian public about Indonesia. When only 24% of Australians realise Indonesia is a democracy and when 30% of Australians think Bali is an independent state, we have a problem.

John McCarthy has served as Australian Ambassador to Vietnam, Mexico, Thailand, USA, Indonesia, Japan and High Commissioner to India.  

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