Indonesia, and to a lesser extent India, have jurisdiction over the major maritime choke points of the Malacca Strait, the Six-Degree Channel and the Sunda Strait, through all of which large volumes of maritime trade pass. Both have been made uneasy by China’s expansionist maritime activities and its ambivalence towards international law. As custodians of vital maritime choke points, India and Indonesia have a duty to ensure that the rules-based order is maintained in those waters.
Building the new capital has been delayed until Indonesia’s economy recovers from the COVID-19 pandemic. That, however, could take several years, although the government will still likely push for construction to begin before the end of Jokowi’s term in office.
The discussions are part of an effort by the US to bring together a collective stance against China’s activities in the South China Sea. In the short-term future, however, it is unlikely that Washington will actually become the driving force behind such a coalition.
The timing of Indonesian Defence Minister Prabowo Subianto’s visit to India highlights shared concerns about China. It is becoming more apparent that closer strategic co-operation is increasingly in the interests of both countries.
Indonesia in 2020 and Beyond: Bill Sullivan – Part Two: COVID-19, Economic Reform, Foreign Relations, 2024 Election
In its relationship with China, Indonesia faces very similar issues to Australia and is realising that having a close relationship with Beijing brings risks for Indonesian sovereignty and interests. Given their historical closeness, Indonesia may follow India’s lead and develop a closer relationship with the United States as a way of counterbalancing Chinese expansionism.
Indonesia in 2020 and Beyond: Bill Sullivan – Part One: Australia, Legal System, IA-CEPA, Mining and Resources
The Australia-Indonesia relationship will inevitably include rocky patches and may never be truly close, but there are enough incentives for both countries to enjoy a productive working relationship. The principal challenge faced by all foreign investors and businesses in Indonesia is the opaque and non-transparent nature of the Indonesian legal and court systems that are inherently difficult for foreigners to deal with.
Through the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), Indonesia looks to benefit most from potentially greater Australian investment in the education sector and the provision of skills training. COVID-19, however, puts significant challenges in the way of achieving those goals.
Saudi Arabia’s push for influence in Indonesia has primarily taken shape through religious educational facilities and they remain the key source of influence today. Brakes on that influence will come in the form of Indonesian Muslim groups that object to the imported Salafist teachings, as well as from Indonesia’s founding doctrine of Pancasila and, in a broad sense, nationalism.
Indonesia’s decentralised, three-tiered regional autonomy structure of governance exacerbates the difficulty of doing business in the country and has heightened the confused responses to Covid-19. While Australia and Indonesia are working very well together across a range of issues, awareness of that needs to be raised in both countries because any coverage of the relationship still tends to be dominated by the things that go wrong, rather than by all the things that are going right.
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.