Two Steps Forward, One Step Back: Indonesia's Arduous Path of Reform

Editor's note: The following text is an excerpt from Damien Kingsbury’s Two Steps Forward, One Step Back: Indonesia's Arduous Path of Reform. The full report can be accessed external pageherecall_made.

Engagement with Australia

Australia’s relationship with Indonesia is continuing at its all‑time high following the conclusion of the East Asia Summit in Bali. Prime Minister Julia Gillard has come away from the summit confirming a major reduction in tariffs in trade with Indonesia, providing further ‘ballast’ to the once troubled relationship.

Even Australia’s agreement to host US Marines in the Northern Territory has caused fewer problems than commentators in Jakarta might have indicated in the days immediately after the plan was announced. Having said that, it is unlikely that Australia will take up President Yudhoyono’s suggestion that Australia also play host to China’s military, to balance assertions of regional power.

Even what was portrayed as a flare‑up in relations over the live cattle trade in 2011 had dropped off the bilateral agenda, being subsumed by the larger trade agreement, while a mooted prisoner‑swap agreement will also add to ending tensions over the jailing of each others’ citizens—including under-aged Indonesians in Australian prisons. Meanwhile, Indonesia is working towards satisfying Australian concerns so the trade can resume, probably early in the new year, even if in reduced form as the country moves towards becoming self-sufficient in beef production. Issues such as the live cattle issue are proving to be peripheral to the larger bilateral relationship.

The ratification of the ASEAN-Australia-New Zealand Free Trade Agreement in November 2011 showed that Australia had ‘no better friend or partner’ than Indonesia in the Asian region, according to Trade Minister Craig Emerson. The deal and Emerson’s comment reflect the long‑term policy initiative to add trade ‘ballast’ to the bilateral relationship.

Australia’s interest in Indonesia is shaped by geographical proximity and the position of the archipelago across our northern lines of transport and communication. Indonesia is also a lynchpin in ASEAN, with which Australia formally seeks positive and constructive relations. Furthermore, Indonesia sometimes acts as an interlocutor for Australia to the region. Australia’s regional interests in countering potential and actual terrorism and people smuggling are deeply entwined with Indonesian security. And, because we share an extensive maritime border, relations between the two states also cover such matters as fishing rights and offshore oil and gas exploration.

Notwithstanding those many intersecting interests, popular Australian perceptions of Indonesia remain disturbingly negative, ‘mired in distrust and suspicion’ and ‘virtually unchanged since … 2006’ (Hanson 2011). More positively, more than three‑quarters of Australians surveyed say that they believe the two countries should work to develop a closer relationship. However, public perceptions of Indonesia as presenting a military threat to Australia, though not located in an objective reality, persist (Hanson 2011:15).

The view that any possible threat to Australia would come through the archipelago—born of the experience of World War II almost seven decades ago—has become less relevant with changes in military technology, military tactics, and the current and medium to longer term global balance of power. In objective terms, Indonesia hasn’t presented a direct threat to Australia and is unlikely to do so in the foreseeable future, including because of its lack of strategic interest, its internal orientation and the structure and status of its military. A breakdown of bilateral relations, sparking a contest between the states that would be played out in contiguous maritime areas, is only a remote possibility.

The official rationale for Australian–Indonesian military cooperation programs has been that it helps promote stable strategic frameworks in our immediate neighbourhood, in the wider Asia–Pacific and at the global level, reducing the potential for threats and mitigating their consequences. While that’s generally correct, there’s been evidence that joint training alone is an insufficient means for preventing conflict.15 Australia resumed military‑to‑military training links with Indonesia in 2005. If anything, the TNI-AD (Indonesian army) and by extension the rest of the Indonesian military have wanted a closer and more active relationship with Australia as a way of rebuilding their international acceptability, especially with the US, which has been a major creditor through bilateral institutions and a major arms supplier. In a bipolar, unipolar and once again bipolar world since the mid‑1960s, Indonesia has felt much more comfortable having the US as a friend and supporter.

The rationalisation for military links, that they impart human rights values, have been shown to be ineffective (e.g. see Amnesty International 2011b, HRW 2011, Moss 2011, Noblet 2011, Radio Australia 2011). Controversial training programs involving Australia’s Special Air Service Regiment (SAS) and Indonesia’s Kopassus’ Counter-Terrorism Unit 81 (SG81) were renewed in 2005 after all training was stopped because of concerns about human rights abuses generally and events in East Timor in 1999 in particular. Training with SG81 was intended to improve mutual counter-hijack and counter-hostage capacities.16 Human rights groups regularly note that Kopassus troops revolve though SG81 to other Kopassus units, and that Indonesia’s principal counterterrorism function devolves to the police Special Detachment 88. However, it should also be noted that SG81 was formally ‘activated’ as a part of Indonesia’s National Counterterrorism Agency (BNPT) in October 2010, and that militaries globally generally include a counterterrorism function.

The 2006 Lombok Treaty between Australia and Indonesia addresses traditional and some non‑traditional security issues. Conventional elements of the treaty concern defence cooperation, including closer military‑to‑military links, intelligence cooperation, joint maritime border patrols and law enforcement cooperation. The treaty contains an explicit endorsement of Indonesia’s territorial integrity, and when it was signed some Australian human rights groups feared that it tied Australia into the suppression of West Papuan separatist activists within Australia. That’s proven not to be the case. Cooperation on counterterrorism has been a significant feature of the treaty. Each of the main components of the treaty is in Indonesia’s interests, and it’s helped to secure what was at that time still a fragile friendship. Moreover, looking ahead, some in Canberra see the Lombok Treaty not as the pinnacle of shared bilateral interests but merely as the base‑camp for greater exploration of a future bilateral relationship.

One difficult area of the treaty was the commitment by Australia to assist Indonesia with its proposed nuclear power plant development in Java. That issue resurfaced in 2007 with Indonesia’s plans to build a nuclear reactor, the first of four, near Mount Muria, 440 kilometres east of Jakarta, to help meet Java’s expanding energy needs. The plan, first announced in 1996 by then Research and Technology Minister BJ Habibie, stalled amid safety fears arising from Java’s unstable geology. Despite continuing concerns about safety, the plan was relaunched in mid‑2007, for completion in 2016. There’s no doubt that Indonesia is struggling with energy production, especially since it became a net oil importer in early 2005.

Still, it’s uncertain whether the project will go ahead. It was quickly pronounced as haram (forbidden) by the traditionalist Nahdlatul Ulama—the first time a mainstream Islamic group had made such a pronouncement on nuclear power. Unlike the earlier plan, the new proposal appeared to have financial backing, although Indonesia’s neighbours continued to be worried about the potential for an accident, especially given the prevailing wind across Malaysia and Singapore. This was always a problematic proposal because of broader reservations about the nuclear industry and Java’s tectonic instability. A large earthquake could damage a reactor and create a nuclear meltdown, which would not only affect tens of millions of Indonesians but would have serious implications for the region, including Australia. Even after the March 2011 earthquake and tsunami in Japan, in which a series of reactor failsafe mechanisms failed, a spokesman for Indonesia’s National Nuclear Energy Agency said that Indonesia still intended to proceed with the development of the power plant. However, he conceded that the plant probably wouldn’t be built on the Muria peninsula because of local opposition there (Padden 2011).

Since the collapse of the Indonesian economy in the late 1990s, Australia’s economic relationship with Indonesia has strengthened. Former Australian Foreign Minister Gareth Evans noted that strengthening economic ties between the two countries would put ‘ballast’ into the relationship. Trade between the two states grew from $1,181 million in 1988–89, when Indonesia was Australia’s 10th largest export destination, to $5,169 million in 1996–97. In 1997–98, two‑way trade increased to $5,619 million, but with a significant slump in Australian exports and a large rise in imports from Indonesia, reflecting the collapse of the rupiah at that time. Overall trade in the following year declined slightly, but the balance again shifted very much more in Indonesia’s favour. Despite Australia’s considerable technological advantage at this time, our exports were dominated by commodities (Parliamentary Library 1999–2000). With both Australia and Indonesia having ridden out the 2009 GFC better than might have been expected, by 2009–10 Australian trade with Indonesia had reached $9,332 million, with a surplus of $744 million in Australia’s favour, locating Indonesia as Australia’s 11th largest export destination (still dominated by commodities, but with education assuming greater importance) and, according to the Department of Foreign Affairs and Trade, our 13th largest overall trading partner. The ‘ballast’ had returned to the economic relationship.

Some of the ballast continues to derive from Australian development assistance to Indonesia, which is currently Australia’s largest aid commitment at $458.7 million a year. The underlying goal of the aid program is to help reduce poverty, assist democratisation, justice and good governance, and promote regional peace and safety. Specific goals include improving gender equality, maternal and child health, access to potable water and sanitation, educational support (at $558.1 million, receiving the largest proportion of aid funds), measures to address climate change (mainly through stopping deforestation), and assisting with tackling corruption (AusAID 2008:8–23). Over the years, AusAID has shifted its pattern of aid to make increasing use of Indonesia’s own systems and resources.

Although memories of it are starting to fade with the passing of time, Australia’s response following the 2004 tsunami disaster in Aceh was a notable example of good intentions reaping rich diplomatic benefits. Australian disaster response and subsequent rehabilitation work in Aceh made a real difference, especially in the shorter term, while our commitment to longer term development illustrated the depth of the relationship.

Diplomatically, Australia’s position has been to try to form the best relationship possible within the context of, and sometimes despite, the prevailing political circumstances. The effort hasn’t always been successful, and the two countries have from time to time had low points in their bilateral relationship that, if we’d shared a land border, might have resulted in more belligerent outcomes. Instead, those moments of antagonism were diluted by the ocean between us.

Despite greater cooperation and closeness, Australia and Indonesia remain very different countries. For example, Australia is historically federalist, but our geographical and sociolinguistic unity construct us as a ‘nation’; Indonesia is historically unitary, but its geographical and sociolinguistic disaggregation imply that it should be federalist, which the decentralisation of 2001 was partly intended to achieve. Geographical proximity can provide only so much in the way of glue. In the longer term, circumstances aren’t guaranteed to drive each state to an identical, or even consistent, space in which liberal cooperation is the norm.

There’s been scope within Indonesia’s political spectrum for an occasional—if not permanent and certainly not absolute—liberal interpretation of political behaviour, in particular under the presidencies of Abdurrahman Wahid and Yudhoyono. As a result, Indonesia’s engagement with Australia has been steady since US‑educated Yudhoyono’s election as president, primarily because of the approximation between his liberal democratic orientation and that of Australia. Until then, Australia’s relationship with Indonesia was characterised by a series of bilateral difficulties, a polite if occasionally annoyed disdain (Suharto), irritation (Habibie), partial engagement (Wahid) or coolness (Sukarnoputri).

Even through those periods, there were specific shocks to the bilateral relationship, some of which were the doing of the Australian Government or its institutions (the East Timor intervention in 1999, the acceptance of Papuan asylum seekers in 2006), some of which were a product of Indonesian insensitivity (the proposed appointment of Herman Mantiri as ambassador) and many of which were a consequence of the two countries’ differing approaches to the organisation of civil society. In particular, there has been considerable Indonesian angst over commentaries and protests by groups and individuals beyond the Australian Government’s control, largely over human rights issues, which have regularly tested the strength of the bilateral relationship. The last major fallout between Australia and Indonesia was in 2006 over the arrival and eventual acceptance of 42 asylum seekers from Papua, which encouraged many in Indonesia to believe that Australia had a secret agenda to see the troubled province break away from the Indonesian state. That event led to the labelling of expressions of concern about West Papua as naive or inaccurate (McGibbon 2006) or to reflections about the lack of expertise of its interlocuters (Aspinall 2008).

From the Indonesian perspective, Australia is again an important regional partner, if not entirely trusted and especially not by all key players in the Indonesian political scene. Memories of INTERFET have faded, but not entirely. Moreover, Australia remains a relatively smaller power in global terms, whereas Indonesia has in the past seen itself if not as a global player then at least as a country that needs to be treated with the respect accorded to such a player. Australia has often been seen not to do so.

Finally, there’s enough realism in Indonesia for its leaders to know that, while a closer bilateral relationship with Australia would have a number of benefits for Indonesia, most of those benefits are also available elsewhere. Indonesia would like to have a good relationship with Australia but knows that it will have more opportunities to pick and choose its partners as its own power and influence in the region grow.

How should Australia proceed?

Given that Australian–Indonesian bilateral relations are generally well positioned at the moment, it’s difficult to suggest what could or should be done differently. Indeed, much of any proposed action to strengthen the relationship would have to be a continuation of the current bilateral strategy. However, there are some points of reorientation that might reap greater benefits, both for Australia and for the relationship.

Trade, aid and education

Both countries might profitably look at ways to improve their economic relationship. Current trade is heavily weighted towards commodities and simply transformed manufactures. Australia should look more closely at how it can promote its technological and educational advantages in an Indonesia that’s progressing up the developmental curve. For an advanced economy, like Australia’s, there may well be substantial benefits in a complementary fit with a rapidly growing developing economy that’s right alongside us.

Australia’s aid program to Indonesia is also a useful and practical gesture of continuing goodwill, and its focus on education in particular is extremely useful for building skills and understanding in Indonesia and creating a more positive profile for Australia. Without imposing an Australian educational agenda, it would be useful to help to ensure a subtle but continuing recognition of Australia’s commitment to education programs, through plaques and the like. Our tertiary scholarship program in Indonesia has been very successful, attracting high‑calibre candidates who return to Indonesia to take up influential senior positions in Indonesian society. The expansion of the program is likely to reap significant benefits over the medium to longer term.

Both countries must also work to improve the people‑to‑people links that underpin good relationships. Australia’s previous emphasis on understanding Indonesia— ‘Indonesia literacy’—has significantly declined since the mid to late 1990s. Australia’s universities were once among the world leaders in Indonesian awareness and, although there remains a significant cohort of Indonesia scholars, the peak in Indonesian studies appears to have passed. Specific funding for research in a range of areas of Indonesian society, politics, geography and economics would generate a better understanding of Indonesia within Australia and provide a richer and deeper pool of talent to draw on for advice and comment. Just as importantly, it would better assure Indonesia that Australia continues to take it seriously as a partner worthy of close consideration and understanding.

One obvious aspect that requires remediation is the rapid decline in support for Indonesian language education, especially at secondary school levels in Australia. Australia’s universities are struggling to maintain Indonesian language courses, which have a direct impact on ‘Indonesia literacy’. Greater support for Indonesian language education at the secondary level would provide a stronger foundation for language and related studies at the tertiary level, enhancing our overall ability to engage closely with Indonesia across a spectrum of activities. Closer people‑to‑people contacts would be a direct outcome of such an approach. An incentive scheme for studying Indonesian would markedly improve enrolment and retention rates in this area, as well as signalling to Indonesia that Australia is serious about the depth of the bilateral relationship.

Australia’s promotion of understanding of Indonesia through educational programs and exchanges is very useful and could be expanded. In particular, while the interfaith dialogue process is an important forum for the exchange of ideas, it tends to bring together people who, if from different faith backgrounds, already have a favourable disposition in that direction. An alternative might be to introduce Australian Muslims to Indonesian Muslims to share interpretations of their common faith and to explore ways in which it can better accommodate people of goodwill of other faiths (or, indeed, of none).

Security cooperation and disaster response

Australia has already offered significant assistance to Indonesian authorities, in particular its police, in investigating terrorism and planning counterterrorist activities. Indonesia’s own counterterrorist capability has been remarkably successful, partly because of its extensive intelligence network and local knowledge and partly because of the occasional ineptitude of Indonesian terrorist organisations. Australia can and should continue to provide high‑level forensic and related investigative skills where required and requested. There may be opportunities in future for Australia to work more closely with Indonesia in the area of terrorist radicalisation and deradicalisation, and those should be explored.

Indonesia’s problems with corruption have long been widely recognised as a significant impediment to its economic development, and Jakarta’s commitment to fighting corruption has varied from rhetorical observance to a range of anticorruption measures. Given the political sensitivity of the corruption issue, Australia would generate considerable antipathy by offering direct investigative assistance in this area. Still, if Indonesia were to take the lead in asking for investigative support or analytical assistance in particular cases, Australia could probably offer such help.

Located astride a tectonic fault line, Indonesia regularly experiences natural disasters, including earthquakes, volcanic eruptions and, in relatively recent history, a major tsunami. Much of the populated area, especially on Java, is low‑lying land subject to flooding. Australia has its own experience in humanitarian and disaster relief and has been generous in providing financial, technical and human assistance to other countries in need, including Indonesia. We should continue to be prepared to provide such aid, although we should remember that direct human assistance is sometimes not required or, more importantly, not wanted by some more defensively nationalist elements in Indonesia’s body politic. With that proviso, assistance to Indonesia’s military in disaster response preparation (for example, engineering and emergency medical skills) could be a useful area of military‑to‑military training that doesn’t engage with the TNI’s less humanitarian activities.

Strategic cooperation

More controversial possibilities include options for closer strategic cooperation. Australia’s strategic relationship with Indonesia has been a difficult one for a variety of reasons, including human rights issues and a historical sense of distrust going back to the Sukarno era. Australian perceptions of Indonesia currently range along a spectrum, from human rights advocates at one end to the defence and security community at the other. Reflecting that distribution of views, about a third of Australians, but a declining proportion, view Indonesia as posing the greatest likely threat to Australia. More informed analysts, on the other hand, don’t regard Indonesia’s strategic orientation or military posture as presenting a threat to Australia; nor do they see Indonesia as able to mount or sustain a major military operation in relation to Australia in the foreseeable future.

Despite legitimate concerns about the TNI’s domestic human rights record and its history of impunity, the official preference of both countries has mostly been for the militaries of the two countries to train together. The advantages of cooperative training to Australia include having a better knowledge of the TNI’s operational methods, greater mutual trust, closer intelligence sharing and, importantly, potentially greater interoperability. In a general climate of reform, there’s also some possibility that Australia could influence (probably in a limited way) how the TNI conducts itself as a professional defence organisation. The concern that joint training only helps the TNI to become better at repression is countered by the realpolitik recognition that the TNI is already well skilled in that area and isn’t likely to become more repressive because of Australian assistance, which would be heavily qualified.

Importantly, closer military‑to‑military relations, in an environment of close political accountability, could lead to a strengthening of the security relationship between the two countries with the eventual aim of establishing a stronger strategic partnership, which has been suggested by some policy thinkers looking to Australia’s longer term security arrangements. This has been characterized as Australia seeking to grow a Southeast Asian ‘power core’, at the heart of which would be a much closer strategic partnership between Australia and Indonesia (Lyon 2011). Such an arrangement, if it were to be pursued, would need to be constructed within a formal framework that ensures, as a minimum, that Australian forces are not complicit in the types of human rights abuses that continue to colour the TNI’s record. For its own part, the Indonesian Government would probably wish to see such an agreement constructed in terms that further bolster its sense of sovereign integrity, and may want further concessions from Australia in that regard before it agrees to any such arrangement.

Individually, Australia and Indonesia are both middle powers, with differing strengths and capabilities. However, a formal alliance between the two could create a formidable partnership able to act as a significant deterrent to all but the largest and most determined potential aggressors. In an era in which the global balance of power is shifting and in which East Asia in particular is undergoing a major shift in orientation, and assuming that Indonesia doesn’t revert to the more draconian aspects of its less palatable past, Australia should seek to explore opportunities for establishing a strategic framework that could lead to a mutually beneficial defence structure.

There would be questions about what conditions Indonesia might require for the establishment of such an alliance, and what conditions Australia would be prepared to accept to achieve it. At some point, closer cooperation would inevitably have to deal with the status and methods of the TNI and intrude upon the political space of the more reactionary elements in the Indonesian security community. Therefore, this possibility needs to be explored carefully, within a tight intellectual and legal framework, lest it end up creating more, rather than fewer, tensions.

Conclusion

This report notes at its outset that much discussion of democratic reform in relation toIndonesia assumes that reform has largely arrived, that it will continue to consolidate and that it’s now a permanent feature of Indonesia’s political landscape. However, the progress of democratisation is not a given, and Indonesia might or might not complete its democratic trajectory. Moreover, forces continue to be at work in Indonesia that could lead to either outcome or, more likely, something in between. Indonesia’s political culture contains variants that may advance the reform agenda, stop it in its tracks or even reverse some of its gains. As a political leader, Yudhoyono has read the play well, arguably since the mid‑1990s, and taken advantage of the opportunities that have been available, but he’ll end his presidency in 2014, short of a constitutional change.17 It’s far from clear who his successor will be, or whether they’ll continue with even his cautious reform agenda. It’s also unclear how his successor will view Australia and what types of issues between the two states will need to be addressed. Meanwhile, structural issues also continue to shape the options that may— or may not—be available to Indonesian political leaders.

Australia must continue to try to strengthen and improve this relationship, as well as to protect it from the inevitable setbacks that eventually affect all relationships. Our continued support in a range of areas has reassured Indonesia of the benign and constructive character of Australia’s intentions. That reassurance was particularly important after the breach that resulted from Australia’s intervention in East Timor in 1999 and the sense of mistrust in Indonesia that followed, which to some extent remains among the more unreconstructed beneficiaries of Suharto’s New Order. Until quite recently, many Indonesians regarded Australia’s emphasis on assistance to Indonesia’s relatively impoverished eastern regions as an attempt to divide the state, in a manner similar to that of the departing Dutch colonialists in 1949. Papua, too, remains a sensitive issue, not so much because of any Australian involvement in Papua but because of an underlying sense of insecurity in Indonesia about the nature and integrity of the state.

In 2011, Indonesia continued on its slow and sometimes inconsistent road towards reform under the cautious liberal leadership of President Yudhoyono. Yudhoyono’s leadership also came under increased pressure during the year for being slow to produce results and as a consequence of Indonesia’s internal political competition. However, the country also achieved steady and increasingly strong economic improvements, maintaining economic growth above population growth. The state also appeared more rather than less cohesive, especially compared to the fragmentary tendencies of the first years of the reform period. Most expressions of concern over Indonesia’s slow development, often directed at the president, should more properly be directed elsewhere—the deeper problems include a lack of bureaucratic capacity, administratively complex state machinery, economic fragmentation, and the continuing problem of corruption.

It would be unrealistic to expect a state as large, complex and unwieldy as Indonesia to develop quickly following the economic collapse of the late 1990s. Core structural problems continue to challenge the state and its options for development, stability, and diplomatic and strategic relations. That Indonesia has returned to steady and sustained economic expansion is of major significance. Reform of some state institutions continues, if at a pace too slow for some critics, although reform of the military and the intelligence services appears to have stopped altogether. That has implications for the TNI’s professional capacity as a defence force, as well as potential to damage its relations with other strategic partners. Still, a number of actual or potential strategic partners, including the militaries of US, China and Australia, appear less concerned by limitations to the TNI’s reform process than perhaps some civil society actors in the US, Australia and Indonesia itself.

Many in Indonesia have embraced a more modern, outward‑looking approach to the country’s position in the world and are more confident about its territorial integrity and its broad economic growth trajectory. Many are also more confident, the further the country moves away from the Suharto era, about the embedding of its democratic processes. However, there remain many who haven’t benefited from recent changes and who are nostalgic for a return to a different, older Indonesia. The country’s movement has been forward, but it’s also taken backward steps and may do so again. The path ahead is not unambiguously straightforward.

On balance, the period since the 2009 elections has been another steady if short step on the sometimes unclear and often obstacle‑ridden path of economic development and political reform. If expectations weren’t always met, that probably reflected hard reality not matching sometimes unrealistic hopes, as well as some of the underlying structural impediments to change. Australian policymakers need to remain aware of Indonesia’s structural limitations and its continuing capacity for often self‑interested ways of doing things, as well as looking for the positives and, where possible, assisting our large northern neighbour.

Australia has a range of options for building closer relations with Indonesia. While some in the strategic community wish for a closer strategic partnership between the two, care must be taken to build a broader social and economic partnership as a prerequisite for any such plan. Australian–Indonesian relations aren’t constrained only by policy settings, but by relatively high levels of public distrust and low levels of people‑to‑people engagement. ‘Engaging Indonesia’ can’t just be a strategic policy: it has to have a solid foundation in community relationships and cooperative societies.

Of the many possible Indonesian futures that lie ahead, several contain a growing, more powerful and more confident Indonesia—one that increasingly makes its presence felt in Southeast Asia and the broader region. Australia won’t be the only country wanting to partner with that Indonesia.