The relationship between our two countries is now back on a more normal diplomatic footing for the moment but we need to do better than that if we are to make the most of our proximity to this gigantic nation of 270 million that considers itself now ‘rising’.
The president of Indonesia was out of the country before many Australians even knew he had arrived.
Joko Widodo (known as Jokowi) touched down Saturday and was back in Jakarta by Sunday evening after a series of meetings in Sydney, including dinner with Prime Minister Malcom Turnbull at his home at Point Piper. This flying visit was in stark contrast to the four days originally planned for November last year, which had included an address to the Australian parliament. Compared to the original plan, this weekend drop-in was Jokowi-lite.
It is therefore also hardly surprising that their announceables lacked much punch. The Australian had foreshadowed the two countries would agree to cooperate in joint patrols in the South China Sea but this did not eventuate, perhaps because of backlash when this was reported in Jakarta.
Full restoration of bilateral military ties was announced by the two leaders, but that is old news. The apology made in Jakarta on 8 February by Australian army Chief Lieutenant General Angus Campbell had already ended tensions over supposedly offensive training materials used in language training programmes involving Indonesian Special Forces soldiers in Perth. In fact, Wiranto, Indonesia’s Coordinating Minister for Politics, Law and Security, had intervened in the row back in January. He made it clear then that the suspension of ties applied only to a few language courses.
Likewise, the renewed commitment to conclude negotiations this year for an Indonesia-Australia Comprehensive Economic Partnership Agreement (IACEPA) announced by the president and the prime minister was just that: a renewed commitment.
Indonesia is, in fact, currently renegotiating all its bilateral trade agreements, with the aim of strengthening its ‘national interests’. This is really shorthand for increasing its capacity to protect domestic business, a position that reflects reality on the ground in Indonesia. Although Jokowi repeatedly asserts that Indonesia is open for business and wants foreign investment to fix its crumbling or absent infrastructure, in reality Indonesia remains a very challenging destination not least because of bureaucratic red-tape and poor law enforcement. This is particularly true for investors who might find themselves competing with one of Indonesia’s politically powerful konglomerat, or tycoons.
In any case, as every lawyer knows, an agreement to agree is not enforceable, and it will be very difficult to draft an IACEPA that will make both countries happy. Progress so far has, unsurprisingly, been slow, and that is unlikely to change, not least because Australia has limited leverage with Indonesia when it comes to trade negotiations.
Turnbull and Jokowi agreed that the Australia-Indonesia trade relationship is underdone. Their announcement that a new Australian Consulate General will open in Indonesia’s second city, Surabaya, is therefore welcome, as are decisions to lift tariffs for some imports and improve access for Australian cattle exporters.
These are not game-changers, however. Despite its population of 270 million, Indonesia is only our 13th largest trading partner and two-way trade is worth only $15.3 billion, less than with Thailand ($20.8 billion) and Malaysia ($19.2 billion), let alone Singapore ($28.5 billion), despite the smaller size of these economies. The two leaders did not mention that Australia invests over ten times more in New Zealand ($99.93 billion) than it does in Indonesia ($8.4 billion), despite Indonesia being the 16th largest economy in the world – and on track, if rating agencies are correct, to be in the top 10 by 20130 and the top 5 by 2050.
Part of the problem is that we do not export much that Indonesia wants and Indonesia doesn’t sell much that we want. Both our economies are commodities-based and opportunities for business partnerships across the Arafura Sea have historically been limited. They still are.
It also needs to be acknowledged that Indonesia’s clunky investment procedures and institutionalised corruption pose serious obstacles for foreign investment. Like so many of Jokowi’s election promises, his claims that he would quickly fix these problems once in office have proved over-ambitious, so don’t bank on IACEPA transforming things in a hurry, even if it is signed this year.
Jokowi’s visit was rushed and lacked much spark but this is not because he has any particular animus towards Australia or because he doesn’t want good relations with us. Rather it reflects the fact that, unlike his predecessor, Susilo Bambang Yudhoyono, he does not see the bilateral relationship as being a special one or a big priority. Jokowi is a domestically-focused president with limited interest in foreign affairs. His main focus seems to be business and as a trading partner we are just not in the league of Indonesia’s major trading partners, Japan, the United States, China or the European Union – or even Singapore, Thailand and Malaysia.
The speed of the visit also reflects the fact that Jokowi’s is a weak presidency. An outsider to elite politics in Jakarta, he is the first president of Indonesia not to lead his own party and has struggled to consolidate power and maintain workable coalitions in the national legislature. Jokowi has faced a series of political challenges to his authority and doesn’t like to be out of the country for too long.
He is, for example, currently dealing with a major campaign by Islamist hardliners to prevent the incumbent governor of Jakarta, the ethnic Chinese Christian Basuki Tjahaja Purnama (known as Ahok), from being returned to office. Conservative Muslim leaders accuse Ahok of blasphemy and he is currently on trial for that offence. The second round of the gubernatorial elections is now scheduled for 19 April.
Ahok was Jokowi’s deputy and close advisor when Jokowi was governor of Jakarta. This means the gubernatorial race is widely seen in Indonesia as a proxy battle between Jokowi and two of the most powerful men in Indonesia – Prabowo Subianto (who Jokowi defeated in the presidential elections in 2014, and who supports Anies Baswedan for governor) and Yudhoyono (whose son, Agus, was knocked out in the first round elections). For many, it is also a rehearsal for the next presidential elections in 2019.
The Jakarta election is therefore a high stakes game, combing elite rivalry with Islamist rabble-rousing and growing anti-Chinese racist sentiment. This toxic brew led to huge rallies of about 700,00 people on the streets of Jakarta on the eve of Jokowi’s first planned visit to Australia in November last year, protesting against Ahok and, by association, Jokowi. It is easy to understand why Jokowi cancelled his trip at the last moment and why he could only manage a quick drop-in this time.
It is good that with his poisonous relationship with Tony Abbott now history, Jokowi seems to have developed a warm friendship with Turnbull of the sort that could enable them talk directly when the next problem arises between our countries, as it inevitably will.
We should not, however, read much more than that into Jokowi’s whistle-stop to Sydney. In the atmosphere of increased nationalism that has prevailed in Indonesian politics since the 2014 elections, Jokowi has proved very sensitive to perceived slights to his country’s dignity, historically a common cause of tensions in the Australia and Indonesia relationship.
It is also good that the relationship between our two countries is now back on a more normal diplomatic footing for the moment but we need to do better than that if we are to make the most of our proximity to this gigantic nation of 270 million that considers itself now ‘rising’.
Yes, business and security ties are vital but they are likely to continue to be slow to develop, unpredictable and often difficult. We should therefore be investing a lot more on cultural diplomacy than the utterly derisory sums we currently spend. We need more ‘soft power’ engagement to underwrite the relationship, give it ballast and make it less contingent on the personality of whoever is currently occupying the presidential palace in Jakarta or the revolving door at the Lodge.
But don’t hold your breath on this one. Like their predecessors, Jokowi and Turnbull dutifully announced that people to people links matter but, as usual, there was not even a hint of any new funding to back that up.
Tim Lindsey is Redmond Barry Distinguished Professor and Malcolm Smith Professor of Asian Law at the University of Melbourne Law School where he directs the Centre for Indonesian Law, Islam and Society.