Indonesia Seeking Closer South Pacific Engagement

17 July 2019 Jarryd de Haan, Research Analyst, Indian Ocean Research Programme

Background

Indonesia, in collaboration with New Zealand and Australia, hosted the 2019 Pacific Exposition in Auckland, between 12 and 14 July. The event was aimed at boosting Indonesia’s engagement with the South Pacific region in trade, investment and diplomacy. It was attended by delegations from nineteen Pacific countries and territories. On the opening day of the event, Indonesian Foreign Minister Retno Marsudi said that her country will seek to establish diplomatic relations with Niue and the Cook Islands and pursue trade deals with Fiji and Papua New Guinea.

Comment

Following the expo, Indonesia’s potential for new exports to the South Pacific reached approximately US$70 million. While that figure is relatively small, among the smaller Pacific countries it could be seen as a significant step towards opening Indonesian trade with the region. Indonesian exports to Pacific countries, other than Australia and New Zealand, have grown marginally from US$261 million in 2013, to US$299 million in 2018. The vast majority of those exports were to Papua New Guinea, which received approximately 71 per cent of Indonesian exports to the region. The remaining Pacific Island countries, therefore, are mainly untouched as potential markets for Indonesia. There are, however, only limited opportunities to develop those markets. Most Pacific Island countries experience slower GDP growth rates (under five per cent) than South-East Asian countries and have significantly smaller populations.

It is unlikely, therefore, that Indonesia sees the South Pacific as a priority for economic engagement, but the region does hold some significance in a geopolitical sense. While relatively little of Indonesia’s trade goes directly to Pacific countries, the bulk of its maritime trade to North and South America passes through the Pacific region. Maintaining maritime security in those waters, therefore, is a high priority.

Additionally, the Indonesian Government, like Canberra and Wellington, has concerns over the growing influence of China in Pacific Island countries. China has become a significant contributor to development assistance in the region, and, while Australia probably still leads in the amount of actual aid given, China’s aid programme lacks any transparency, inflaming suspicions about its intentions in the region. In continuing to pursue its foreign policy of “a thousand friends and zero enemies” and strengthening its diplomatic links to the Pacific, Indonesia hopes to offset some of China’s influence.

There are, however, obstacles to Indonesia’s relationship with the Pacific, the most visible of which is concern from Pacific countries surrounding Indonesia’s treatment of the situation in West Papua. Vanuatu, a vocal supporter of West Papuan self-determination, was invited to the Pacific Expo, but did not send a delegation. Instead it sent its resident high commissioner. While other Pacific leaders have not been as vocal on the subject as Vanuatu, they have consistently expressed concerns on the issue through the Pacific Islands Forum. Following the Pacific Expo, New Zealand Foreign Minister Winston Peters signalled that Indonesia may be working towards allowing some foreign journalists access to West Papua. It is unclear, however, if Indonesia will actually commit to such an arrangement and, if it does, how much access any foreign journalists would actually have.

Although the Pacific Expo did not see any significant outcomes, it does indicate recognition of the region’s importance to Indonesia. While it is unlikely that the island states of the South Pacific will become a priority, neither can they afford to be ignored in Indonesia’s broader foreign policy strategies.

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