Independent Strategic Analysis of Australia’s Global Interests


As an emerging maritime power, Indonesia will encounter a variety of considerations in deciding how it will project its power in the region. In the lead up to his election, Indonesian President Joko Widodo promised to strengthen Indonesia’s maritime security and develop diplomatic ties.

What’s Next for Jakarta Governor-Elect Anies Baswedan?

Anies will look towards fulfilling his policy promises to prove his worth as a presidential candidate. The success of religious tensions in propelling him into power could also be utilised again.

Indonesia: Economic Developments and Future Prospects

Although the Indonesian economy continues to enjoy strong growth, and may even become the world’s fourth-largest by 2050, investment is desperately needed to improve infrastructure, which is necessary for future growth. Good progress has been made in introducing reforms to help small businesses and the country’s growing middle class has the potential to be a significant future driver of the economy.

Indonesia: Comprehensive Tax Reform on the way

Legislation for tax reforms will likely be finalised by July to pave the way for an information exchange programme targeted at tax evasion from multinational corporations.

Saudi King Salman on Landmark Visit to Indonesia

The visit will likely see billions of dollars poured into improving Indonesia’s oil refining capacity but it also raises the issue of the influence of Wahhabism and the “Arabisation” of Islam in Indonesia.

Jokowi to Visit Australia

The developing bilateral free trade agreement will likely be discussed during the President’s quick visit to Sydney. Indonesia will also be looking to secure more investment and tourism from Australia.

Indonesia: Outcome of Governorship Election will have Impact beyond Jakarta

The outcome of the election could mean either a humiliating defeat for hardline Islamic groups or a boost to their legitimacy within the political sphere.

Indonesia: Ahok Leading Governorship Polls despite Blasphemy Allegations

While support for the embattled Ahok is rising, his opponents are likely to remain vocal against his candidacy. It could also indicate, though, that the public may be taking some of those groups less seriously than before.

Indonesia: Increasing Tensions amid Political Jockeying

The protests, counter protest and arrest of individuals suspected of treason are a result of increasing political manoeuvring in the country.

Warming Relations for Indonesia and Singapore

Bilateral relations between Indonesia and Singapore have the potential to strengthen over the coming years as trade and investment grows. This may facilitate resolutions to a number of disagreements that have placed a strain on the relationship.

Australia-Indonesia Trade Relationship: Good, but could (and can) be Better

The Indonesia-Australia Comprehensive Economic Partnership Agreement is the key to improving the depth of the trade relationship. Addressing incorrect perceptions of each other will also be crucial.

What is Behind the Protests Which Postponed Jokowi’s Australia Visit?

It is unlikely that Busiki “Ahok” Tjahaja Purnama, the incumbent governor of Jakarta, will be charged over the alleged blasphemy that spawned the protests, but the racist undertones seen in the rally and election campaign are concerning.

Indonesia’s Tropical Landscape Finance Facility: A Catalyst for Environmental Sustainability and Long-Term Food Security?

Indonesia must promote green growth, investment and sustainable ecological management to meet its commitments to the Paris Climate Agreement and safeguard long-term food security.

Governance and Political Challenges in Indonesia

The Indonesian parliament continues to be dominated by secular-nationalist parties but the emphasis on nationalism could undermine the prospect of greater ethnic Chinese representation in the parliament. Other challenges include elevated levels of government corruption (either real or perceived) and a flawed taxation system. At the same time, matters are complicated by the efforts of the Indonesian National Armed Forces to increase their influence in domestic politics through greater involvement in internal security matters.

Jokowi to Visit Australia: What to Expect?

President Joko Widodo will be looking to expand investment and Prime Minister Malcolm Turnbull will be keen to see Indonesia ease the restrictions on cattle imports. While the focus will be on economic relations, both countries will stand to benefit from closer co-operation in counter-terrorism.

Big Plans for Tourism Expansion in Indonesia

The Indonesian Government has ambitious plans to expand the tourism sector by developing ten new tourist destinations by 2019, but it is not certain that it will actually have the funds needed to achieve those plans.

Indonesia’s Bid for a UN Security Council Seat

It appears likely that Indonesia will win its bid for a seat on the United Nations Security Council despite growing opposition to human rights abuses in West Papua.

Exporting Philippine’s War on Drugs into Indonesia

Ramping up Indonesia’s “war on drugs” could be seen as an opportunity for the military to become further involved in domestic issues.

Malaysian Prime Minister Faces Mounting Public Pressure

While public pressure against him slowly grows, the PM will use his party’s strong rural support base and new security legislation to retain control.

Indonesia: Widodo Gives Annual State of the Nation Address

Although it revealed little that was new in the government’s outlook for the short term, the Address confirmed that the acceleration of development and economic reforms will continue to be the Jokowi Administration’s primary domestic focus.

Indonesia to Introduce Tax Havens

The Widodo Government is trying to encourage Indonesian businesses to move their overseas assets back to, and keep them within, Indonesia, but the optimistic targets and hoped-for revenues will probably not be achieved.

Indonesia: Human Rights Activist Faces Prosecution

The defamation charges against Haris Azhar are a move to protect officials allegedly involved with drug trafficking. Whether they succeed will depend on the willingness of President Widodo to tackle the suspected corruption within the National Police, the National Narcotics Agency and the military.

Indonesian Police Arrest Suspected Militants Planning Singapore Attack

The arrest of the six suspected militants fits a broader pattern of Islamist radicalisation and offers sobering lessons that any successful anti-radicalisation policy should incorporate.

Assessing the Jokowi Administration: A Narrative of Reform versus Élites

Jokowi is constrained by the limits imposed on him by the élites, so his political capital is largely dependent on realising his vision for economic reform and growth. His vision of Indonesia as a Global Maritime Fulcrum has been hampered by his inexperience in security and foreign policy matters. In simply being an outsider elected to the highest office in the land, he has, however, broken new ground.

New Zealand and Indonesia Talk Trade and Security

In reaching an agreement on the export of breeding cattle, fisheries management and potentially greater participation in the dairy industry, the two countries’ leaders may have set the stage for closer trade, investment and security co-operation between Indonesia and New Zealand.

Indonesia Hostage Crisis: How A Three-Way Security Challenge Could Help ASEAN

In light of the recent hostage crisis in the Sulu/Sulawesi Seas, the framework for trilateral maritime policing is an important step in response, but as the agreements come to fruition the potential for overall deepening in future ASEAN and regional maritime co-operation can realised.

Environmental Impact of the 2015 Forest Fires: A Wakeup Call for Indonesia

Jakarta remains slow to act on its promises to protect the forests of Indonesia that were given in the wake of last year’s forest fire season.

Beijing and the Natuna Islands: Some Cautious Sabre-Rattling from Jokowi

Jakarta’s increased defence expenditure has projected a hard power response to China’s ongoing maritime incursions in the seas around the Natuna Islands, but it also masks underlying problems at the heart of its naval and coast guard assets and which threaten a truly effective response.

The Natuna Islands, China and the Jokowi Pushback

A cohesive response from Jakarta has created a rare pushback in its maritime dispute with Beijing over the waters surrounding the Natuna Islands and potentially signalling a new heading in Jokowi’s regional foreign policy.

High Price of Beef Driving Indonesian Shift on Imports

Indonesia’s shift in attitude to its beef imports shows an increased willingness to take economic and biosecurity risks to service its domestic price pressures.

Indonesia’s Calm Strategy against Terrorism

Indonesia continues to rely on its de-radicalisation programme as a means of counter-propaganda while focussing on security through closer co-operation with regional neighbours.

Counter-Terrorism Challenges in Indonesia and Beyond: Sidney Jones

Relative to its size, Indonesia has a jihadist movement that is very small and, for the most part, quite unsuccessful. Renowned counter-terrorism expert and director of the Jakarta-based Institute for Policy Analysis of Conflict, Sidney Jones, discusses with FDI some of the potential security challenges confronting Indonesia, both from existing local groups and fighters returning from Syria, and the status of Jemaah Islamiyah, before looking further ahead and highlighting a possible longer-term problem that could evolve on the Bangladesh-Myanmar border.

Jokowi Announces Indonesian Palm Oil and Mining Moratorium

The temporary ban has been welcomed by environmental activists, though it remains to be seen if it will be enforced.

Indonesian Sovereignty Challenged by China?

An incident involving a Chinese fishing boat in Indonesian waters has raised concerns over the security of its Exclusive Economic Zone, but it is unlikely that the incident will provoke a rash response from Jakarta.

Indonesia Seeking to Boost Investment from South Korea

Early signs of greater South Korean investment in Indonesia look promising, although investors could face an uphill battle in the long term unless President Widodo manages to implement economic reforms.

Indonesia and Malaysia: Prospects for Closer Co-operation

Indonesia and Malaysia are becoming increasingly important to political developments in South-East Asia. Both countries can play an important role in delegitimising, and offering a counter-narrative to, extremist groups in the region.

Indonesian Water Security: Improving but Still Subject to Shocks

Indonesia is not water scarce as it has enough water to satisfy the needs of its population and economy. Uneven distribution, poor management and a lack of infrastructure, however, have left parts of the country with insufficient access to water. Without considerable investment, water security in Indonesia will remain tenuous and subject to rapid deterioration.

Indonesia: Struggling with Palm Oil Revenue and Defence Cuts

The announcement of spending cuts by the Indonesian Government highlights concerns over the slowing economy, reduced earnings from an important export and the implications that the cuts may hold for the defence force.

Food Security in Indonesia: A Continued Reliance on Foreign Markets

Indonesia has long sought to restore its self-sufficiency in key agricultural commodities and has embarked on an infrastructure development programme that could go some way to boosting market access for domestic producers. This is unlikely to be enough to guarantee future food security and it will continue to depend on foreign markets.

Indonesia: More Economic Plans Announced

Despite the President’s announcement to reform the Indonesian economy it will take a long time before any substantial changes can be effected.

Indonesia’s Role in the US-ASEAN Summit

Indonesia will likely take a leading role in the US-ASEAN summit especially in regard to counter-terrorism, but may struggle to procure any unified ASEAN response to the South China Sea Dispute.

Indonesia: A Security and Stability Analysis – Part Two

16 February 2016 | Indian Ocean, Indonesia

The security implications of economic inequalities, food insecurity, natural disasters and the circumstances of Papua and Aceh provinces, along with any future external security threats that may develop, all have the potential to negatively affect the continuing stability and prosperity of Indonesia.

Indonesia: A Security and Stability Analysis – Part One

11 February 2016 | Indian Ocean, Indonesia

Over the last 15 years, Indonesia has experienced rapid economic growth and grown to be one of the more vibrant economies in South-East Asia. Its ongoing prosperity and stability could, however, be challenged by a number of factors in the coming years.

Headwinds and Some Good News for the Indonesian Economy in 2016

While the Widodo Government continues to focus on reforms, external factors that act against the Indonesian economy continue to discourage investors.

Indonesia: Chinese-Japanese Competition Heats Up in Asia

16 December 2015 | Indonesia SWA Articles

Following its lost bid to build a high-speed rail link in Indonesia, Japan has won another to build a similar link in India. At the same time, Indonesia has offered it a conciliatory US$13 billion worth of investment in 2016. Background China recently won a bid over Japan and France to build a railway link...

Indonesia: Will anything come of the Paris conference?

9 December 2015 | Indonesia SWA Articles

It is likely that the Indonesian government will prioritise economic development over any major commitment to tackle climate change.   Background Indonesian President Joko Widodo is in Paris attending the United Nations climate talks with more than 150 world leaders. Anticipating the conference, Indonesian Foreign Minister Retno Marsudi emphasised Indonesia’s support for reducing emissions but...

Is a Major Corruption Crackdown on the Way in Indonesia?

25 November 2015 | Indonesia SWA Articles

While the released tapes will likely see Setya step down from his office as well as increased pressure to eradicate corruption in the country, any large-scale reforms remain a while off. Background Corruption in Indonesia’s political power structure has been pulled into the spotlight after a video recording that purported to show Setya Novanto, the...

Will Indonesia Take China to the International Criminal Court?

18 November 2015 | Indonesia SWA Articles

While unlikely, the challenge could go ahead if China refuses to clarify its stance on Indonesia’s Exclusive Economic Zone. Background Indonesian Chief of Staff Luhut Panjaitan announced on 11 November that Indonesia could take China to the International Criminal Court (ICC) if territorial claims in the South China Sea are not resolved through dialogue. In...

Indonesia: Obstacles Ahead for the Trans-Pacific Partnership

11 November 2015 | Indonesia SWA Articles

Rushing through the reforms needed to implement the TPP before the next presidential election will prove difficult for the Jokowi Government but failing to do so could see Indonesia sidelined in a future regional TPP grouping. Background As noted and analysed in a recent Strategic Weekly Analysis, Indonesian President Joko “Jokowi” Widodo announced that his...

Indonesia Looks to Join the Trans-Pacific Partnership

4 November 2015 | Indonesia SWA Articles

The benefits to Indonesia of joining the Trans-Pacific Partnership remain unclear although it may help to push through much-needed economic reforms. Background During his recent visit to Washington, Indonesian President Joko “Jokowi” Widodo announced that his country will join the Trans-Pacific Partnership (TPP) free trade deal. Following his meeting with US President Barack Obama, Jokowi...

Jokowi’s Washington Visit: Long Term Aspirations for a US-Indonesia Partnership?

28 October 2015 | Indonesia SWA Articles

The trip to Washington may be a step towards a longer term prioritisation by Indonesia of investment and defence ties in its relationship with the United States. Background Indonesian President Joko “Jokowi” Widodo arrived in Washington on 25 October and held bilateral talks with US President Barack Obama the following day. The three-day visit, which...

Indonesia Calls for Greater Beijing-ASEAN Co-operation

21 October 2015 | Indonesia SWA Articles

Joint peace patrols between the China and ASEAN navies will give weight to Indonesia’s pursuit of a mediatory role in the South China Sea dispute. Background In a three-day meeting that began on 16 October, Chinese and ASEAN defence officials gathered in Beijing to discuss closer co-operation on security and defence matters. Announcing the visit...

Malaysia to Help Fight Indonesian Fires

14 October 2015 | Indonesia SWA Articles

Malaysia has pledged assistance to Indonesia in fighting the fires raging in Sumatra and Kalimantan. Although useful from an environmental perspective, it will do little to prevent more haze next year. Background Malaysian Prime Minister Najib Razak has had a two-day visit with Indonesian President Joko Widodo, on 11-12 October. According to a press release...

China and Japan Compete for Investment Opportunities in Indonesia

7 October 2015 | Indonesia SWA Articles

While China may have won the bid to build a high-speed railway link in Indonesia, it will have to continue to compete with Japan to secure future investment opportunities. Background China recently won a bid over Japan and France to build a railway link between Jakarta and the city of Bandung. The winner for the...

Indonesia as a Contributor to Regional Security

29 September 2015 | Indonesia

Download PDF Jarryd De Haan Research Analyst Indian Ocean Research Programme   Key Points Indonesia is looking to expand the capabilities of its navy in coming years through the Minimal Essential Force goal. Jakarta will likely focus on defence diplomacy through bilateral relations and seek to maintain a mediatory role in the South China Sea...

Indonesian Government to Address Haze Problem

23 September 2015 | Indonesia SWA Articles

There are hopes that recent talk from Jakarta of a toughening stance against the companies that engage in forest burn-offs will translate into action, but an ineffective judicial system will be a significant hurdle. Background Thick haze has set in over Indonesia, Singapore, Malaysia and southern Thailand due to the annual burning of land for...

Indonesia: Widodo Drums up Business in the Gulf Region

16 September 2015 | Indonesia SWA Articles

President Joko Widodo’s discussions with officials in the Gulf States during his visit there probably included a push for further investment in Indonesia. Promising reforms may help encourage investors, but reforms need to be effective for any longer term results to ensue. Background Indonesian President Joko Widodo began his Middle Eastern tour on 11 September....

Social and Demographic Issues in Indonesia

27 August 2015 | Indonesia

Download PDF   Mervyn Piesse Research Analyst Indian Ocean Research Programme   Key Points The majority of the Indonesian population will continue to live in the west of the country. This region will continue to experience slower population growth than the more sparsely populated east. As the fertility rate remains above replacement level, the population...

Indonesia: Unlocking Geothermal Energy Potential

26 August 2015 | Indonesia SWA Articles

President Joko Widodo has advocated the development of geothermal energy but several obstacles continue to block efforts to fully develop the sector. Indonesia will need to harness both its geothermal potential and to expand its non-renewable energy sector. Background During his keynote speech at the 2015 Indonesia International Geothermal Convention and Exhibition (IIGCE) held 19-21...

Indonesia: President Appoints New Economic Ministers and Outlines 2016 Budget

19 August 2015 | Indonesia SWA Articles

Replacing key economic ministers with trusted and experienced officials could enhance Joko Widodo’s political standing but it will not overcome the external economic pressures that are hurting the Indonesian economy. Background President Joko “Jokowi” Widodo, unimpressed by a lack of co-ordination among his government’s economic ministries and under pressure from the Indonesian Democratic Party of...

Indonesian Navy to Take Greater Role in Protecting Coral Reefs

12 August 2015 | Indonesia SWA Articles

Protecting reefs that are recognised internationally for their ecological significance could provide a boost to the Indonesian President’s maritime doctrine and assist in securing marine food security. Background The Indonesian Minister for Maritime Affairs and Fisheries, Susi Pudjiastuti, has called upon the Navy (TNI-AL) to increase its assistance in protecting the country’s 5.1 million hectares...

Indonesia’s National Characteristics: Challenges and Opportunities

6 August 2015 | Indonesia

Download PDF Mervyn Piesse Research Analyst Indian Ocean Research Programme   Key Points The population of Indonesia is expected to exceed 300 million by mid-century. This population will likely be wealthier and more urbanised than it is currently. Such growth could place additional strain on food and water security. To ensure unemployment levels remain manageable,...

Turkey Seeks an Indonesian Foothold in South-East Asia

5 August 2015 | Indonesia SWA Articles

Joint efforts to stem the flow of foreign fighters to Islamic State could further co-operation between the two countries but suspicions of Turkish assistance to suspected Uighur militants could stall the relationship. Background After visiting China, Turkish President Recep Tayyip Erdoğan paid a three day visit to Indonesia from 30 July in an effort to...

El Niño Brings Prolonged Dry Conditions to Indonesia

29 July 2015 | Indonesia SWA Articles

  Meteorologists expect El Niño weather conditions to delay the rainy season in Indonesia, potentially leading to food, water, economic and environmental problems. Background The Indonesian National Agency for Disaster Management (Badan Nasional Penanggulangan Bencana, or BNPB) has declared that most of the country’s 34 provinces are experiencing drought and warns of an increased risk...

Indonesia Seeks to Increase Exposure to Islamic Finance

22 July 2015 | Indonesia SWA Articles

Boosting its Islamic finance sector will open Indonesia to new avenues of international investment and better protect it from international financial volatility. Background Indonesia is competing with Turkey to host the World Islamic Infrastructure Bank (WIIB), an initiative of the Saudi Arabian-based Islamic Development Bank (IDB). The WIIB, which is on track to be established...

Religious Intolerance Remains High in Indonesia

8 July 2015 | Indonesia SWA Articles

Recent reports suggest that Indonesia still has a long way to go in improving levels of religious tolerance. Draft legislation, if passed and enforced, might provide an opportunity for such an improvement. Background The latest quarterly report by the Indonesian Komisi Nasional Hak Asasi Manusia (National Commission on Human Rights, or Komnas HAM) indicates that...

Indonesia Formalises Involvement in Asian Infrastructure Investment Bank

1 July 2015 | Indonesia SWA Articles

Indonesia hopes to secure funding for its infrastructure development programme but, in the absence of greater bureaucratic reform, it is unlikely to fully benefit from the promises of the China-led institution. Background At a ceremony in Beijing on 29 June, officials representing the 57 founding members of the Asia Infrastructure Investment Bank (AIIB) gathered to...

The US-Indonesia Relationship Ahead of Widodo’s Washington Visit

3 June 2015 | Indonesia SWA Articles

Regional security challenges could push Joko Widodo to further develop his foreign policy position before his visit to Washington, but narrow economic interests will also be at the forefront of Jokowi’s mind. Background It was announced in March 2015 that Indonesian President Joko “Jokowi” Widodo would visit the United States at some point in June...

Indonesia Sinks Chinese Ship but Keeps Relationship on Even Keel

27 May 2015 | Indonesia SWA Articles

Even after sinking a Chinese fishing vessel, Jakarta has avoided souring the bilateral relationship by maintaining its lenient stance towards Beijing. Background Indonesia marked National Awakening Day, 20 May, by sinking 41 foreign ships accused of illegally fishing in its territorial waters. Among the destroyed vessels was the 300 gross tonne Gui Xei Yu 12661,...

Oil and Gas Contractors Expected to Cut Investment in Indonesia

6 May 2015 | Indonesia SWA Articles

Indonesia will need to make its foreign investment laws more attractive if it is to benefit from the technical knowledge and experience of international operators. Background The Indonesian Petroleum Association has estimated that oil and gas contractors will cut their planned capital expenditures by an average of about 20 per cent due to the decline...

Water Privatisation: Jakarta Latest City to Rule for Remunicipalisation

29 April 2015 | Indonesia SWA Articles

The annulment of a contract between Jakarta’s public water operator PAM Jaya and two private water operators earlier this year has left the management of the city’s water supply and sanitation networks in limbo. Background The Coalition of Jakarta Residents Opposing Water Privatisation (KMMSAJ) filed a lawsuit against Jakarta’s administrators in 2013 regarding the privatisation...

Kokang Conflict Strains Sino-Burmese Relations but Benefits the Military

29 April 2015 | Indonesia SWA Articles

The Burmese military benefits after the government blames China for the continuing Kokang conflict. Background Sino-Burmese relations have, generally, been close since the repression of Burmese pro-democracy riots in 1988. Throughout the next two decades, Western sanctions were instituted against the country leaving it dependent upon Chinese investment and trade. With Burma’s gradual transition towards...

Cabinet Reshuffle Likely to do Little for Indonesian President’s Popularity

15 April 2015 | Indonesia SWA Articles

Elitist interests take precedence over concerns about popularity, limiting the impact that a future cabinet reshuffle could have on Joko Widodo’s political standing. Background Recent public opinion surveys indicate that Indonesians want President Joko Widodo to reshuffle his cabinet and fire some under-performing ministers. Widodo became president with an approval rating of 75 per cent,...

Renewed Anti-Terrorism Laws in Indonesia and Malaysia

8 April 2015 | Indonesia SWA Articles

Recent attempts to confront religious radicalisation in these countries have proved problematic and could, moreover, be open to misuse. Background The Indonesian Government has controversially clamped down on Islamic websites that allegedly promoted radicalism. Malaysia, meanwhile, has passed new anti-terror legislation that allows for indefinite detention without trial. The responses of both countries have come...

Indonesia: Joko Widodo Seeks Security and Investment from East Asia

1 April 2015 | Indonesia SWA Articles

Staying true to the well-established Indonesian “free and active” foreign policy, President Widodo is courting both Japan and China for security and investment. Background A Memorandum of Understanding signed by President Joko Widodo and Japanese Prime Minister Shinzo Abe outlined a commitment by the two countries to increase co-operation in peacekeeping, disaster relief and the...

Indonesian Investment Climate Remains Tenuous

25 March 2015 | Indonesia SWA Articles

Challenges to conducting business in Indonesia will make it difficult for foreign investors to remain in the country. Background The Indonesian Investment Co-ordinating Board (Badan Koordinasi Penamaman Modal: BKPM) recently revoked 6,541 business permits granted to foreign investors between 2007 and 2012. The permits were worth a total of 300.9 trillion rupiah ($29.5 billion), close...

Popular Support for Joko Widodo Declines

11 March 2015 | Indonesia SWA Articles

Voters are beginning to question the Indonesian President’s commitment to reducing corruption, potentially worrying investors. Background President Joko “Jokowi” Widodo was inaugurated in October 2014 with a clear mandate to tackle corruption in a country with a reputation for graft. He also promised to address past human rights abuses and reform the police. He was...

Sumatran Ports the First to Undergo Modernisation

18 February 2015 | Indonesia SWA Articles

The construction of ports in Sumatra could rectify some of the logistical problems that restrict Indonesia’s economic growth but is unlikely to significantly affect well-established international shipping routes. Background As part of President Joko Widodo’s maritime development programme, work has commenced on the construction and expansion of five ports in the west of the country....

Malaysia-Indonesia Relationship Stronger After Presidential Visit

11 February 2015 | Indonesia SWA Articles

The Malaysia-Indonesia bilateral relationship is on a firmer footing after Indonesian President Widodo’s visit to Kuala Lumpur, although relations could still be damaged by a lingering trust deficit. Background In his first bilateral trip abroad since taking office in October 2014, President Joko “Jokowi” Widodo arrived in Malaysia on 5 February for a two day...

President Jokowi Seeks Opposition Support

4 February 2015 | Indonesia SWA Articles

By reaching out to his main political rival, Indonesian President Joko “Jokowi” Widodo could ensure that his anti-corruption credentials are preserved. Background President Widodo is facing increasing pressure from his political allies after postponing the inauguration of new police chief, Commissioner-General Budi Gunawan. Members of the President’s Great Indonesia Coalition, including some of his main...

Indonesia: Efforts to Improve Investor Sentiment Overshadowed by Corruption

28 January 2015 | Indonesia SWA Articles

Attracting investment by simplifying the business licence application process could be jeopardised by conflict between the Corruption Eradication Commission and the police. Background In a bid to rectify the bureaucratic inefficiencies that negatively affect investor sentiment, the Indonesian Investment Co-ordinating Board (BKPM) opened the first branch of its one-stop integrated service (PTSP) on 26 January...

The Indonesian Maritime Doctrine: Realising the Potential of the Ocean

22 January 2015 | Indonesia

Download PDF   Mervyn Piesse FDI Research Analyst Indian Ocean Research Programme   Key Points President Joko “Jokowi” Widodo has outlined an ambitious maritime doctrine that may become the centrepiece of his five-year term. The doctrine seeks to boost economic growth by improving connectivity between the islands of the Indonesian archipelago. Increasing domestic connectivity will...

Coal Will Continue to Power Indonesia

21 January 2015 | Indonesia SWA Articles

Given the cost of alternative sources of electricity generation, and a high dependency upon the resource, coal is likely to remain a major energy source in Indonesia for the foreseeable future. Background As part of President Joko “Jokowi” Widodo’s modernisation programme, the Indonesian Government is aiming to make electricity available to 90 per cent of...

Indonesia: Cheaper Oil May Not Result in Reduced Current Account Deficit

21 January 2015 | Indonesia SWA Articles

Cheaper oil is unlikely to significantly reduce the Indonesian current account deficit as commodity export prices remain weak and imported foreign materials will be required for infrastructure projects. As the infrastructure will ultimately be used for productive ends, an increase in the deficit could, in the long term, actually be beneficial. Background After the Indonesian...

Fighting Corruption in the Indonesian Energy Sector

26 November 2014 | Indonesia SWA Articles

By promising to weaken the “migas mafia”, Indonesian Energy Minister Sudirman Said has demonstrated that he is committed to fixing the graft-ridden oil and gas sector. Background Indonesia needs to boost its level of oil and gas exploration if it is to avoid a looming energy crisis over the coming decade. Relying upon energy imports...

Indonesia’s New Government: Fears Megawati Could Dominate as Transition Team Formed

10 September 2014 | Indonesia SWA Articles

The composition of a transitional governance team has sparked fresh fears that PDI-P leader Megawati Soekarnoputri may dominate the incoming government once it is sworn in next month. Background  As Indonesia prepares to swear in a new government, speculation continues to mount that former president and Indonesian Democratic Party - Struggle (PDI-P) chairwoman, Megawati Soekarnoputri,...

Widodo Urges Indonesian Clerics to Stand up to Islamic State

3 September 2014 | Indonesia SWA Articles

With the IS seeking to expand its influence in Indonesia, incoming President Joko Widodo has urged local Muslim leaders to do more to halt the spread of radical Islamist teachings. His comments underline the precarious security situation facing Indonesia, although the country’s moderate Islamic democracy should make containing the threat far easier than in other...

Can the Islamic State Expand into Indonesia?

27 August 2014 | Indonesia SWA Articles

With the Islamic State (IS), also known as ISIL, attracting extremists across Indonesia, there are growing fears that the group could revitalise the militant Islamist movement there. Consequently, Jakarta has appealed for increased international support and co-operation to help combat the terrorist organisation. Background Indonesia needs international support and co-operation to help combat the Islamic State...

Indonesia Must Do More to Fight HIV/AIDS Scourge

20 August 2014 | Indonesia SWA Articles

  A recent report claims that Indonesia is losing the fight against HIV, with a dramatic rise in incidences over the past few years. While Jakarta has implemented a number of impressive programmes, a shift in attitude is sorely needed to address the growing crisis. Background Experts have warned that Indonesia is losing the fight...

Prabowo’s Latest Challenge Signals Difficult Times Ahead for Indonesian Parliament

6 August 2014 | Indonesia SWA Articles

The latest challenge by defeated presidential candidate Prabowo Subianto could signal difficult times ahead for Indonesia’s parliament, especially if opposition members try to undermine president-elect Joko Widodo. Background Having earlier lodged a challenge in the Constitutional Court, defeated presidential hopeful, Prabowo Subianto, now looks set to contest the result in parliament, too. Members of his...

Back in Business: Indonesian Mines to Resume Production after Deal is Struck

30 July 2014 | Indonesia SWA Articles

A deal between the Indonesian Government and mining company Freeport will see many of Indonesia’s largest mines resume production. While the news is a win for the government, the outlook for mining companies once president-elect Joko Widodo takes office in October is not yet assured. Background Indonesia has reached a deal with PT Freeport Indonesia,...

Indonesian Democracy Takes Major Step Forward as Jokowi Declared Winner

23 July 2014 | Indonesia SWA Articles

  With the announcement that Joko Widodo has won the recent presidential election, Indonesia’s young democracy has taken a major step forward. Despite the prospect of some unrest, the election marks the first transfer of power between two directly-elected presidents and bodes well for the future.  Background Indonesia’s democracy has taken a major step forward...

Indonesia Faces Period of Economic Uncertainty as Election Results may be Challenged

16 July 2014 | Indonesia SWA Articles

South-East Asia’s largest economy faces a period of uncertainty after both candidates, Joko Widodo and Prabowo Subianto, claimed victory in last week’s election. Official results will be announced on 22 July but a protracted dispute, including a possible constitutional challenge, now appears likely. Such a situation would further erode confidence in Indonesia’s already shaky investment...

Indonesia in 2020: Future Challenges for the New President

11 July 2014 | Indonesia

Download PDF   Andrew Manners Research Analyst Indian Ocean Research Programme   Key Points Indonesia’s new president, likely to be Joko Widodo, faces a range of challenges in his first term, including: food, water and energy security; the need to upgrade vital infrastructure; addressing corruption; improving health and education; and increased environmental concerns. The key...

Indonesian Presidential Candidates Vow to Improve Struggling Education System

9 July 2014 | Indonesia SWA Articles

With Indonesia's education system ranked as one of the worst in the world, both presidential candidates, Joko Widodo and Prabowo Subianto, have promised to extend the compulsory length of education to 12 years of schooling. While the initiative is an important first step, addressing the country’s education system will prove a major challenge for Indonesia’s next...

Indonesia: Jokowi Faces Fierce Battle as Presidential Election Looms

2 July 2014 | Indonesia SWA Articles

  With the gap closing between Joko Widodo and Prabowo Subianto, the presidential election scheduled for 9 July will be fiercely contested. While Widodo is still expected to claim victory, it will not be by much, especially with outgoing President Susilo Bambang Yudhoyono now throwing his support behind Prabowo. Background Indonesia’s presidential election will be...

Indonesia May Acquire Drones and Modernise Military to Protect Natural Resources

25 June 2014 | Indonesia SWA Articles

Presidential frontrunner Joko Widodo has said that he intends to employ drones as a means of protecting the country’s territory and safeguarding its natural resources. Regardless of the success of its indigenous drone programme, challenges such as illegal logging and fishing, piracy and counterterrorism mean that drones will be a favoured option.   Background Presidential...

Indonesia: Presidential Debate Dominated by Protectionist Promises as Investor Uncertainty Continues

18 June 2014 | Indonesia SWA Articles

With the latest presidential debate between Prabowo Subianto and Joko Widodo dominated by nationalist rhetoric, Indonesia’s foreign investment climate will remain shaky. Electoral jockeying aside, the danger is that such sentiment could significantly hamper South-East Asia’s largest economy in the longer term.   Background Indonesian presidential hopefuls Prabawo Subianto and Joko Widodo traded nationalist rhetoric and...

Pirates Release Ship, but Indonesia still Worst for Piracy

4 June 2014 | Indonesia SWA Articles

  The recent hijacking of an Indonesian-bound ship has once again highlighted the growing problem of piracy in Indonesia. As the world’s leading hotspot for attacks, Indonesia will need to step up its efforts to tackle piracy if it is to show the rest of South-East Asia that it has the capacity to defend its...

ASEAN, Indonesia Aiming to Establish Historic Economic Community by 2015

28 May 2014 | Indonesia SWA Articles

Further integration as part of the proposed ASEAN Economic Community (AEC), set to be launched in 2015, will mean that the grouping, already home to some of the world’s fastest-growing economies, mayexperience stronger economic growth in the future if the AEC is successfully implemented. Background At the recent World Economic Forum in Manila, Indonesia’s new...

Indonesian Presidential Race Down to Two Contenders; Jokowi Firms as Favourite

21 May 2014 | Indonesia SWA Articles

  With the Golkar party unable to form a coalition to nominate its own candidate, the presidential race will be a two-way battle between Joko Widodo and Prabowo Subianto. Joko is still the favourite, but the country’s fragmented parliament and his party’s large coalition will make it difficult for him to govern once elected. Background...

Indonesia to Upgrade Naval Presence amid Growing Tensions in South China Sea

14 May 2014 | Indonesia SWA Articles

  With tensions in the South China Sea growing, Indonesia has announced plans to increase its naval influence in the region. Background Indonesia will upgrade its naval presence in Southeast Asia, as territorial disputes over a number of islands in the South China Sea continue to escalate. On 8 May, the Indonesian Navy (TNI-AL) confirmed...

Indonesia Eases Foreign Investment Restrictions but Investor Sentiment Will Remain Shaky

7 May 2014 | Indonesia SWA Articles

Amid weaker foreign investment growth, Jakarta has announced it will ease some important investment restrictions. But investor confidence will likely remain shaky, especially with nationalist sentiment increasing ahead of the presidential election scheduled for July.  Background Indonesia has eased a number of investment regulations in a bid to attract much-needed foreign capital. The overhaul, announced...

Australia Eyes Record Cattle Exports to Indonesia as Partnership Moves Forward

30 April 2014 | Indonesia SWA Articles

Rising demand and improving agricultural ties could see Australian live cattle exports to Indonesia reach record levels in 2014, as the future finally starts to brighten. Background Rising demand and a relaxation of import quotas could see live cattle exports to Indonesia reach record levels this year. More than 270,000 head of cattle are set...

Wait and See: Uncertainty to Continue Ahead of Indonesia’s Political Transition

23 April 2014 | Indonesia SWA Articles

The results of Indonesia’s recent parliamentary elections, which indicate that a weak coalition government and further political dysfunction are likely, will do little to boost investor confidence. Background As Indonesia heads towards its biggest leadership transition in nearly a decade, political and economic uncertainty is likely to continue following the recent parliamentary election. While official...

Indonesia Pays “Blood Money” to Save Maid in Saudi Arabia; Pressure Mounts to Reform Kafala Employment System

9 April 2014 | Indonesia SWA Articles

  The recent case of an Indonesian maid saved from death row in Saudi Arabia has once again highlighted the plight of domestic workers in the Gulf, as pressure mounts to reform the controversial kafala system.  Background Jakarta has stepped in at the eleventh hour to help save the life an Indonesian maid on death...

Indonesia Facing Population Crisis as Calls for Better Planning Initiatives Intensify

2 April 2014 | Indonesia SWA Articles

Indonesia is facing a population crisis and will struggle to provide for its people unless better family planning policies are implemented. Background Indonesia is headed towards a population crisis and will struggle to feed, educate and provide sufficient jobs for its people unless better planning measures are implemented. That is the consensus after new data...

To the Bitter End: Indonesia Pushes Ahead with Mining Laws as Investor Climate Weakens

26 March 2014 | Indonesia SWA Articles

A recent deal may pave the way for mining operations to resume in Indonesia following months of disruption. But, as Indonesia pushes ahead with its controversial ban on raw mineral exports, critics continue to question its long-term value. Background As Indonesia’s mining sector continues to falter following a controversial ban on raw mineral exports, a...

The Man Who Would Be King: Jokowi the Man to Beat as Megawati Makes Long-Awaited Nomination

19 March 2014 | Indonesia SWA Articles

Indonesian opposition leader Megawati Soekarnoputri has finally announced that she will nominate Jakarta’s popular mayor, Joko Widodo, as her party’s candidate for the July presidential election. The PDI-P and Joko, however, must overcome a number of challenges before they can lead the country.  Background Former president and leader of the Indonesian Democratic Party of Struggle...

Indonesia Presidential Election: Uncertainty Likely to Linger as Megawati Stays Silent

12 March 2014 | Indonesia SWA Articles

Though opposition leader Megawati Soekarnoputri has yet to choose her party’s presidential candidate, fuelling uncertainty ahead of the election in July, she is still expected to eventually nominate Jakarta’s popular mayor, Joko Widodo. Background The outlook for the 2014 Indonesian presidential election is still unclear, with Democratic Party-Struggle (PDI-P) leader and former president, Megawati Soekarnoputri,...

Indonesia to Ratify ASEAN Transnational Haze Pollution Treaty

5 March 2014 | Indonesia SWA Articles

  Though Indonesia seems ready to finally ratify a regional haze agreement, first introduced in 2002, other measures will be needed to effectively fight the problem.  Background As the annual haze from forest fires again heaps misery on millions living in South-East Asia, hopes are high that Indonesia may finally ratify the ASEAN Agreement on...

Indonesia, Jordan to Boost Ties as Jakarta Continues Diplomatic Push

5 March 2014 | Indonesia SWA Articles

The agreement between Indonesia and Jordan to boost ties, while relatively inconspicuous, indicates that Jakarta will continue to pursue its growing foreign policy ambitions, especially as it aims to extend its influence beyond South-East Asia. Background Indonesia and Jordan have agreed to boost ties, after King Abdullah II ibn Al Hussein visited the South-East Asian...

Saudi Arabia Moves to Protect Indonesian Workers, But Wider Reforms Still Needed

26 February 2014 | Indonesia SWA Articles

  Although the kafala labour system is not without some merit, it still grants employers substantial power over their employees. It will require further reform if human rights abuses are to be prevented. Background Saudi Arabia has agreed to upgrade and guarantee the rights of nearly one million Indonesian maids working in the Kingdom. The...

Jakarta: Luxury Property Booming, but Challenges Ahead

19 February 2014 | Indonesia SWA Articles

  Luxury property sales continue to boom in Jakarta, with the city experiencing the highest price increases in the world in 2013. Despite this, however, Indonesia’s housing market faces a number of challenges, including the possibility of a future housing bubble and ongoing property insecurity.  Background Jakarta was ranked as the hottest high-end real estate...

Indonesia Starts Importing Beef from Japan: Implications for Australia?

12 February 2014 | Indonesia SWA Articles

  Indonesia has begun importing beef from Japan as a means of overcoming its heavy reliance on Australian livestock. But the move is unlikely to change much, especially given Japan’s small output and the continued unsuitability of other markets.  Background Indonesia has started buying beef from Japan in a bid to diversify its imports, ABC...

Going Nowhere: Indonesian Mining Exports at a Standstill as Investment Climate Worsens

5 February 2014 | Indonesia SWA Articles

Indonesia’s controversial ban on exports of unprocessed minerals and the introduction of a new export tax have brought its mining industry to a standstill. Although Jakarta claims that the changes will eventually add long-term value, it is by no means a certainty. Background Indonesian mining exports have come to a standstill following a controversial ban...

Indonesia Enjoys Record Investment, but Slower Year Predicted for 2014

29 January 2014 | Indonesia SWA Articles

Although Indonesia enjoyed record investment in 2013, uncertainty ahead of the elections combined with tighter monetary policies, mean that Indonesia’s economic growth is likely to slow somewhat in 2014. Background Despite investments reaching a record high in 2013, tighter monetary policy and investor uncertainty ahead of elections in July should see Indonesia’s economy slow somewhat...

Some Progress, but Corruption Remains Endemic in Indonesia

18 December 2013 | Indonesia SWA Articles

A recent report by Transparency International reveals that corruption remains an endemic problem in Indonesia. Though encouraging signs are beginning to emerge, corruption will remain a major issue for investors in Indonesia in the future. Background                                                                    Corruption remains endemic in Indonesia, with a recent survey by Transparency International ranking the South-East Asian country at 114 out...

Indonesia Looks to Attract Much-Needed Foreign Investment, but Nationalist Sentiment Remains

4 December 2013 | Indonesia SWA Articles

  Indonesia may revise foreign investment rules as a means of attracting foreign capital, especially in vital infrastructure projects such as airports. But, with nationalism on the rise ahead of the 2014 elections, the move could be delayed for some time yet. Background Indonesia is looking to revise its foreign investment rules and regulations as...

Indonesian Natural Gas Could Boost Stuttering Economy, but Challenges Remain

20 November 2013 | Indonesia SWA Articles

Indonesia has continued to push ahead with its plans to begin extracting shale gas. But, although the country has significant potential, a number of challenges, including high costs, corruption and a nationalist regulatory framework, may deter investors.     Background As Indonesia’s markets continue to stutter amid falling commodity prices and a widening current account deficit,...

Bali Democracy Forum a Success, but Reforms Needed in Indonesian Democracy

13 November 2013 | Indonesia SWA Articles

While the sixth annual Bali Democracy Forum was hailed a success and continues to grow, Indonesia may soon need to reform its own democratic system, especially if it is to remain a leading example for the region. Background Indonesia last week hosted the sixth annual Bali Democracy Forum, an international meeting aimed at developing democracy...

Indonesian Wage Protests Continue Ahead of Government Income Announcements

6 November 2013 | Indonesia SWA Articles

Wage protests have continued in Indonesia, with tens of thousands of workers striking across the country. But, with the economy looking more uncertain, local governments are unlikely to heed protesters’ demands when they announce income levels in the coming weeks.  Background Indonesia’s wage wars have continued, with tens of thousands of workers going on strike...

Indonesia’s Wage Wars: Protests Continue but Government, Employers Unlikely to Budge

30 October 2013 | Indonesia SWA Articles

Thousands of workers have protested in Jakarta, demanding a major raise in the minimum wage and an improvement in social welfare. But, with Indonesia’s economy slowing and its productivity remaining low, the government and employers are unlikely to grant such concessions. Background Thousands of Indonesian workers took to the streets of Jakarta on 24 October,...

Playing the Long Game? Indonesia May Relax Mineral Export Ban but Investment Concerns Remain

23 October 2013 | Indonesia SWA Articles

Indonesia may relax a controversial 2014 ban on raw mineral exports. Any relaxation, however, is likely to have a limited impact on the Indonesian mining sector as investment concerns remain. Background Indonesia may relax a controversial ban on raw mineral exports that was due to come into force in 2014. According to theJakarta Globe, a...

A Breath of Fresh Air? Indonesia, ASEAN Agree to Adopt Haze Monitoring System

16 October 2013 | Indonesia SWA Articles

Indonesia and ASEAN have agreed to adopt a new haze monitoring system aimed preventing smog and prosecuting those responsible for forest burning. The move indicates that Indonesia, the region’s worst air polluter, is finally starting to take the issue seriously. Background Indonesia and ASEAN have agreed to adopt a new haze monitoring system in an...

China Strengthens Ties with Indonesia, ASEAN as Obama Stays Grounded

9 October 2013 | Indonesia SWA Articles

China has strengthened its ties with Indonesia and ASEAN following a visit to the region by President Xi Jinping. While Xi’s trip was hailed a success, US President Barack Obama was forced to cancel his Asian trip, prompting observers to question Washington’s so-called “Asian Pivot”. Background China has strengthened its ties with Indonesia and ASEAN...

Indonesian Food Self-Sufficiency in Doubt as Australian Cattle Quotas Lifted

2 October 2013 | Indonesia SWA Articles

Jakarta looks set to increase its beef imports from Australia only a few weeks after it announced plans to buy Australian farmland to ease beef supply issues. The move has thrown into question its plans for beef self-sufficiency, but is also a sign of improving agricultural ties between the two countries. Background Only a few...

Indonesia’s Economy Steadies, but Reforms Still Needed for the Future

25 September 2013 | Indonesia SWA Articles

Indonesia’s economy has steadied somewhat following news that the US Federal Reserve would not start cutting its stimulus package, which has helped buoy emerging markets. But, with cuts still expected in the future, Jakarta must continue with its economic reforms. Background Indonesia’s economy has steadied somewhat, with its stock market climbing five per cent and...

Indonesia to Buy Australian Farmland, but Doubts Linger over Food Self-Sufficiency

18 September 2013 | Indonesia SWA Articles

Indonesia plans to buy one million hectares of Australian farmland as it aims to solve its beef supply problems and become food self-sufficient by 2014. But doubts linger over whether it can meet this ambitious goal. Background Indonesia says it plans to buy one million hectares of Australian farmland in a bid to solve its...

Indonesia Relaxes Mining Restrictions in Bid to Ease Investor Concerns

11 September 2013 | Indonesia SWA Articles

Indonesia has said it plans to relax a number of mining restrictions that have scared off foreign investors and hampered the mining industry. Though details so far are vague, a relaxation of these rules could ease investor concerns and boost the country’s mining sector.  Background Indonesia says that it plans to relax a number of...

Indonesia to get Apache Helicopters from the United States

4 September 2013 | Indonesia SWA Articles

The recent US agreement to sell Apachehelicopters should help Indonesia to fight piracy, which has been increasing in the archipelago. But analysts have also suggested that the move is part of Washington’s so-called “Asian Pivot” and underlines the US goal of deeper engagement with South-East Asia.  Background The US has agreed to sell eight Apache...

Indonesia Unveils Measures to Revive Struggling Economy

28 August 2013 | Indonesia SWA Articles

Indonesia has unveiled new measures to revive its struggling economy and reduce its current account deficit. But it remains to be seen whether such policies will be enough, especially amid the current global economic turbulence. Background Indonesia has unveiled measures aimed at boosting investor confidence and reviving its struggling economy. The move includes new import...

France Looks to Boost Relations with Indonesia, ASEAN

14 August 2013 | Indonesia SWA Articles

French Foreign Minister Laurent Fabius has visited Indonesia in an effort to boost relations with Indonesia and ASEAN. The first visit by a French foreign minister to Indonesia in 17 years, the trip underscores France’s ambition to more actively engage the region in the future. Background French Foreign Minister Laurent Fabius visited Indonesia on 1...

Inflation Rising as Economic Growth Slows

7 August 2013 | Indonesia SWA Articles

Indonesia’s inflation rate has risen to 8.18 per cent, its highest level in nearly four-and-a-half years. While the increase was largely expected, given the recent cut in fuel subsidies, there are signs that South-East Asia’s largest economy may be beginning to slow. Background The inflation rate in Indonesia has risen to its highest rate in...

Piracy on the Rise in Indonesia: Can Australia Help?

31 July 2013 | Indonesia SWA Articles

According to a new report by the International Maritime Bureau, piracy is on the rise in Indonesia, despite a decrease in attacks globally. Now the country with the biggest piracy problem in the world and significantly lacking in naval capabilities, Indonesia should look towards Australia for assistance. Background A recent report by the International Maritime...

Indonesia Vows to Tackle Haze from Forest Burn-offs

24 July 2013 | Indonesia SWA Articles

Indonesia plans to ratify a regional treaty in an effort to stop haze from forest burn-offs. Critics have said that the treaty does not go far enough and, as Indonesia aims to become a global economic power, it may be forced to get tougher on the burn-offs. Background Indonesia plans to ratify a regional treaty...

Aspects of Indonesia’s Foreign, Defence and Trade Policies: Current Developments and Future Expectations

23 July 2013 | Indonesia

          Download PDF           Gustavo Mendiolaza                                       FDI Research Analyst                                                   Cherika Hardjakusumah FDI Research Assistant Key Points Indonesia’s developing economy presents unique opportunities, but if Indonesia is to become one of the world’s ten largest economies by 2025, it will need to further expand its economic reach. Under President Susilo Bambang Yudhoyono, Indonesia...

Chinese Investment Difficulties in Indonesia

17 July 2013 | Indonesia SWA Articles

Despite great progress in Indonesian-Chinese investment ties since the 1990s, difficulties remain in the direction and security of investments, impeding an otherwise prosperous trade relationship. Background Indonesia’s successful transition from authoritarian to democratic rule, accompanied by the waning of the New Order ideology, has modernised Chinese-Indonesian relations. This can be seen most clearly in China’s...

Indonesia Fuel Subsidy Cut Faces Problems, Should Strengthen Economy Long-Term

10 July 2013 | Indonesia SWA Articles

Indonesia’s plan to cut fuel subsidies is already running into problems, with concerns growing about compensation and corruption. In the long-term, however, the politically unpopular reforms should strengthen Indonesia’s economy.  Background Indonesia’s cut in fuel subsidies has already run into problems, with government authorities scrambling to compensate those most affected by the controversial move. Home...

Food Prices Set to Rise Following Indonesia’s Fuel Subsidy Cut

3 July 2013 | Indonesia SWA Articles

The food security of millions of Indonesian families may be at risk, with the prices of key goods predicted to rise on the back of Indonesia’s recent fuel subsidy cut. Background In a move which promises to strengthen long-term economic growth, the Indonesian government recently cut fuel subsidies, causing a 44 per cent increase in...

Indonesia’s Fuel Problems the Tip of the Iceberg

26 June 2013 | Indonesia SWA Articles

Though not enough to improve Indonesia’s long-term economic outlook on its own, President Susilo Bambang Yudhoyono’s decision to reduce fuel subsidies is a necessary step in boosting the country’s future economic prospects. Background On 17 June, the Indonesian parliament approved a cut to long-standing fuel subsidies in a change that will raise the cost of...

Indonesian Interest in Australian Cattle Farms a Twist on Food Self-Sufficiency Push

8 May 2013 | Indonesia SWA Articles

  Recent interest from Indonesian public sector investors in owning and investing in Australian cattle farms could signal that the government is compromising on its controversial food self-sufficiency laws.  Background A delegation of senior officials from Indonesia’s investment board, the BKPM, will visit Australia early in June to discuss opportunities to invest in Australia’s cattle...

Reducing Disaster Risks In Indonesia Now a Major Issue for Australia

1 May 2013 | Indonesia SWA Articles

The risks of substantial natural disasters are rising in Jakarta. Although the risk of loss of life has been reduced, the economic costs of lowering it are increasing. Investment from the Australian aid programme aimed at reducing the risks from disasters should be a priority.  Background Natural disasters in Indonesia are following a global trend:...

Australia Seeking to Deepen Relations with Indonesia

13 March 2013 | Indonesia SWA Articles

At the recent Indonesia-Australia dialogue, Foreign Minister Bob Carr stressed the importance of deepening relations with Indonesia and building stronger cultural and people-to-people ties. Background At the Indonesia-Australia dialogue, Foreign Minister Bob Carr said relations between Australia and Indonesia are at a ‘near historic high’ but stressed more needed to be done to deepen the relationship. The annual conference,...

Indonesia on Track for another Growth Year

30 January 2013 | Indonesia SWA Articles

The World Bank forecasts the Indonesian economy to grow by 6.3 per cent in 2013. The figure is boosted by a growing and increasingly affluent middle class, whose demand for motor vehicles has caught the eye of the Australian automotive industry.    Background Indonesia’s economic growth looks set to continue in 2013, with the country’s economy...

Indonesian Counterterrorism Arrests Highlight Successes and Challenges

31 October 2012 | Indonesia SWA Articles

The recent arrest of eleven terrorist suspects demonstrates the success of Australian-Indonesian counterterrorism co-operation since the 2002 Bali bombings, while highlighting some of the challenges that lie ahead. Background Following several days of raids across four provinces in late October 2012, the Indonesian National Police special counterterrorism unit Densus 88 arrested 11 men suspected of...

Indonesia, Malaysia Continue Corruption Fight

10 October 2012 | Indonesia SWA Articles

Both Indonesia and Malaysia are continuing their efforts to tackle corruption. While much remains to be done, Indonesia in particular is making progress.  Background Officials in both Jakarta and Kuala Lumpur have recently stressed their countries’ commitment to fighting corruption. Indonesian authorities announced that the Transportation and Trade Ministries had made the greatest strides in...

Indonesia to Expand Arms Sales to Africa and Middle East

29 August 2012 | Indonesia SWA Articles

Indonesia is seeking to capitalise on interest from Iraq and Uganda in purchases of Indonesian defence products, which, if successful, will contribute to the target of US$7.6 billion in defence sector earnings. Background The Indonesian defence industry could receive a sizeable boost if plans for exports to Iraq and Uganda go ahead. Earnings from the...

China, Indonesia Begin Missile Talks

8 August 2012 | Indonesia SWA Articles

Background China and Indonesia have started talks on the ambitious local production of C-705 anti-ship missiles, as part of Indonesia’s efforts to achieve independence in weapons production. The defence co-operation reflects strengthening ties between the two countries, amid heightening tension in the South China Sea involving China and a number of Indonesia’s ASEAN neighbours. Comment...

Indonesia and the Failed States Index Report

11 July 2012 | Indonesia SWA Articles

Background The annual Failed States Index (FSI) report has once again been released by the Fund for Peace (FFP) and Foreign Policy magazine. The report analyses countries by looking at social, economic, political and military indicators. Last year, Indonesia ranked at 64 out of 178 countries. In the 2012 edition, Indonesia has moved up one...

FPI: Rising Radical Movement in Indonesia

20 June 2012 | Indonesia SWA Articles

  Background As the world’s largest Muslim country and third-largest democracy, it is interesting to see how Indonesian democracy is coping with the country’s increasingly dynamic social conditions. One recent phenomenon is the emergence of more radical Islamic movements, the most well-known of which is Front Pembela Islam (Islamic Defenders Front or FPI). Comment FPI...

Indonesia Must Choose Its Direction In 2012

30 April 2012 | Indonesia

Download PDF Yasmi Adriansyah FDI Associate Key Points Though progress has been made, corruption is still the biggest challenge confronting Indonesia. The coalition government headed by President Susilo Bambang Yudhoyono will come under increasing strain as the 2014 general election draws closer. The protection of Indonesian migrant workers abroad is becoming a more pressing concern...

The Cocos Islands Plan and Indonesia’s “Dynamic Equilibrium”

26 April 2012 | Indonesia SWA Articles

Background In March 2012, the Australian Government hinted at “a longer-term option” to host United States’ aerial surveillance assets in the Cocos (Keeling) Islands. While Beijing is likely to view this plan as part of recent moves by Washington to contain China, Jakarta fears that the bilateral plan will inevitably pose challenges to Indonesia’s strategic...

The ADF in Indonesia: Lessons from Operation Padang Assist

2 April 2012 | Indonesia

Download PDF   Sergei DeSilva-Ranasinghe FDI Senior Analyst   Key Points The ADF’s support to Indonesian authorities during Operation Padang Assist was an important confidence-building measure in strengthening relations between Australia and Indonesia. Modern disaster relief interventions require extensive inter-force military co-operation, including collaboration with non-military civilian agencies and foreign governments. The success of ADF...

2+2 Dialogue Signals New Era of Indonesia-Australia Co-operation

21 March 2012 | Indonesia SWA Articles

Background Foreign Minister Bob Carr and Defence Minister Stephen Smith met with their Indonesian counterparts Marty Natalegawa and Purnomo Yusgiantoro, in Canberra on 15 March, for the inaugural Australia-Indonesia Foreign and Defence Ministers’ (“2+2”) Dialogue. Comment In a joint communiqué, Mr Smith said, ‘Australia and Indonesia are working to expand defence and security co-operation and...

Indonesia Attempts to Improve Energy Security

14 March 2012 | Indonesia SWA Articles

Background Indonesia is an increasingly important member of the “Asian tiger economies”; with a six per cent growth rate in 2011, it has grown to be the largest economy in South-East Asia. In January 2012, that status was further bolstered as credit agencies raised Indonesia’s credit rating to investment grade for the first time since...

Indonesia: A Weakening of the Corruption Eradication Commission?

14 March 2012 | Indonesia SWA Articles

Background On 11 March 2012, the Indonesian House of Representatives drafted a Bill to limit the range of the Corruption Eradication Commission (KPK, or Komisi Pemberantasan Korupsi) and to monitor its work. It has raised questions as to how the proposed changes would affect the KPK if the bill passes through Parliament. The anti-corruption watchdog...

Change in South-East Asia: Indonesia and Burma

23 February 2012 | Indonesia

Change in South-East Asia: Indonesia and Burma Speech Given to ‘Left-Right Think Tank’, 21 February 2012 Leighton G. Luke, Manager, Future Directions International Indian Ocean Research Programme   We live in interesting times, ladies and gentlemen – and in an interesting corner of the world. Tonight I am going to talk to you about two...

Indonesia Urged to Combat Fundamentalists

1 February 2012 | Indonesia SWA Articles

Background In a report released on 26 January, the International Crisis Group (ICG) has warned that acts of vigilantism among Muslim extremists in Indonesia are increasingly turning into terrorism.  Comment While Indonesia’s 210 million Muslim faithful are typically peaceful moderates, religious fundamentalism, which was formerly suppressed under the “New Order” regime of former president Suharto,...

Indonesian Military Expansion Strengthens China Partnership

25 January 2012 | Indonesia SWA Articles

Background China’s Defence Minister, General Liang Guanglie, met the Indonesian ambassador to China, Imron Cotan, in Beijing on 16 January 2012, to discuss increasing military co-operation between the two countries. Comment The meeting occurred on the same day Indonesian Defence Minister, Purnomo Yusgiantoro, declared that, after ten years of limited military spending, Indonesia was now...

Indonesia to Increase Defence Spending

16 November 2011 | Indonesia SWA Articles

Background Indonesia has announced that it will increase next year’s military budget by 35 per cent. The increased attention to defence is regarded as long overdue. Much of Indonesia’s military hardware is out of date, while regional powers such as China are ramping up their military development. The United States will most likely be heartened...

Indonesia on Drought Alert

28 September 2011 | Indonesia SWA Articles

Background Indonesia is on drought alert, with concerns of significant water supply disruptions throughout Greater Jakarta. The Cisadane River in the Tangerang municipality is flowing at reduced rates after rain has failed to materialise in recent months. Around 100,000 people are facing a food crisis in Eastern Indonesia as a result of the drought. Comment...

Indonesia Proposes Foreign Debt Restrictions

7 September 2011 | Indonesia SWA Articles

Background Bank Indonesia (BI) has flagged the idea of setting rules to limit local private companies’ exposure to foreign debt. BI Governor Dr Darmin Nasution has spoken of a possible need for regulation, to prevent firms that do not have foreign currency revenue streams from borrowing in foreign currencies. Comment The comments come as Indonesian...

US Seeks Increased Trade with Indonesia

27 July 2011 | Indonesia SWA Articles

Background During bilateral talks between the United States and Indonesia, US Secretary of State Hillary Clinton has called on Indonesia to cut tariffs in an effort to promote trade between the two countries, thereby deepening the relationship.  Comment Following the second Joint Commission Meeting (JCM) of the US-Indonesia Comprehensive Partnership on 24 July 2011, Secretary...

Indonesian Beef Price Rises, while Export Ban gives Northern Australian Farmers Power to Negotiate

15 June 2011 | Indonesia SWA Articles

Background The ban on cattle exports to Indonesia will hit the Indonesian hip pocket and highlights the insecure state of Indonesia’s beef industry. Almost all of the beef Indonesia imports comes from Australia. The export ban will hasten Indonesia’s desire to obtain self-sufficiency, to such an extent that when the ban is lifted there may...

China, Indonesia Launch Joint Special Forces Training Initiative

15 June 2011 | Indonesia SWA Articles

Background The first-ever training exercise involving Chinese and Indonesian Special Forces units will conclude on 17 June. With a focus on counter-terrorism and hostage rescue operations, the exercise, Sharp Knife 2011, represents a further deepening of Sino-Indonesian military relations. When considered alongside the US-Indonesia CARAT naval exercises of May 2011, the Sino-Indonesian exercise confirms Jakarta’s...

Indonesian Terror Suspects Arrested

15 June 2011 | Indonesia SWA Articles

Background In a busy weekend, the Indonesian police anti-terror unit arrested a total of eight persons suspected of terrorist involvement. The arrests highlight the efforts being made by Jakarta to combat Islamist extremists, who have threatened to target the state itself. They came as the country prepares for the verdict against Islamist cleric and accused...

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