Ideas@TheCentre
Indonesia juggles China and America
Indonesia, Australia's large northern neighbour, has long been thought of as a basket case – an ethnically diverse and geographically dispersed archipelago that could at any moment splinter into a myriad of small, unstable island states.
Yet little more than a decade after the fall of the enduring authoritarian Suharto regime, Indonesia is a stable – if chaotic – democracy. While still plagued by all-pervasive corruption, Indonesia is being feted by the world's investment community as a major emerging market.
Straddling the Indian and Pacific oceans, and abutting some of the world's busiest shipping lanes, the Southeast Asian nation is also being courted by major powers keen to shore up strategic influence in the Asia-Pacific region.
President Obama made a long-awaited visit to Jakarta in November, only a few months after the Pentagon fully normalised military-to-military relations that had been suspended for a decade. Just last week, Indonesia's President Susilo Bambang Yudhoyono was invited to be the guest of honour at India's Republic Day celebrations. And China recently promised Indonesia US$6.6 billion in infrastructure investment.
Eager to enhance both its economic and diplomatic clout, the Indonesian government has welcomed this flurry of overseas interest. Yet Jakarta faces a delicate balancing act when dealing with these regional powers.
Indonesia – rich in natural resources and producing 13% of global coal exports – knows that its economic future is tied to China's. But it is wary of a future where China may come to dominate the Asia Pacific.
It would much prefer to preserve the status quo, where China is only one (albeit large) cog in the US-led security order.
Despite throwing itself into the Association of Southeast Asian Nations (ASEAN) with gusto, after a decade of neglect, Indonesia knows that only America can provide an effective counterweight to a rapidly growing China.
Jakarta was instrumental in the push for the United States to join the East Asian Summit, and welcomed Washington’s assistance to mediate in a series of ongoing territorial disputes between China and several Southeast Asian states in the South China Sea.
But historically non-aligned, and with a relatively fresh memory of colonialism, Indonesia is wary of being dominated by any great power, including the United States. Jakarta will remain staunchly independent.
Like Australia, Indonesia faces the juggling act of looking to China for its economic growth, and to America to ensure its security. How Jakarta handles this will determine what kind of diplomatic role it will play in the region.
Jessica Brown is a Research Fellow at The Centre for Independent Studies. Her report Jakarta’s Juggling Act is released by the CIS this week.
