Indonesia’s defence forces suffer from a lack of modern equipment. The government is currently weighing up options for further upgrades from the United States and Russia.
The energy sector faces significant challenges in attracting foreign investment, as the Indonesian Government is moving towards nationalising the industry. There is a push to bring defence down to the people, and which is largely supported by the public, with a focus on the equipping of a more localised military force, as opposed to expenditure on aircraft and submarines. Australia has arguably gone backwards in its understanding of its giant neighbour and needs to develop a deeper awareness of the shifting geopolitical realities in the region.
The Indonesian Government has begun easing restrictions as daily cases continue to increase. While it is difficult to gauge the impact of that move, prospective presidential candidates are already vying to benefit from perceptions of government incompetence.
The Indonesian central government must enact strong nationwide policies if it is to stem the spread of COVID-19.
The bilateral relationship will endure through close economic ties but is unlikely to expand significantly beyond that sphere.
If approved, Indonesia’s claim on the Eauripik Rise north of Papua could become a source of short-term friction in the South Pacific. It is unlikely those claims will have long-lasting ramifications, however, given that the Indonesian Government is in a good position to negotiate on them.
Palm oil exports from Indonesia and Malaysia may become more vulnerable targets for retaliatory measures from India and China in the future.
The visit to Australia by President Joko Widodo brought some optimism from both sides as to the future of the bilateral relationship. The priority now will be to improve the economic side of the equation, in the hope that other aspects of the relationship will follow. Working more closely to address shared concerns over maritime security may help to expedite that process.
The economic impact of the coronavirus will be most felt through a drop in the number of tourist arrivals, as well as falling copper prices. Chinese-Indonesians are again being targeted by misinformation campaigns that could increase tensions in the short term.
After France and Indonesia sign the Defence Co-operation Agreement, most of the progress in the partnership will be seen in intelligence sharing, training, exports and manufacturing.