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.
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.