It took 24 hours—and apparently an angry call from a blindsided President Joko Widodo—for Home Affairs Minister Tjahjo Kumolo to revoke a raft of new restrictions on visiting foreign journalists, which were similar to those in force during President Suharto’s 32-year rule.

Why they were introduced in the first place is difficult to understand in the current democratic climate, but it showed once again the mixed signals emanating from the Widodo government when it comes to Indonesia’s dealings with the rest of the world.

Cabinet reshuffles or not, the president will have to work harder at ensuring there’s a lot more policy coordination and a lot less economic nationalism if he is to achieve his goal of attracting foreign investment and bringing a better balance to the economy.

New manufacturing industries are vital for sopping up unemployment and steering the country away from its past dependence on natural resources and onto a growth path that will propel it above the current 5%.

Right now, Indonesia is going nowhere fast, offering a welcoming hand in one instance and an arresting hand the next. It’s left the overriding impression that because of the size of its domestic market—and the profits to be gained from it—everything has to be on its terms.

It wasn’t always like this. In the years following the 1997 financial crisis, Indonesians were in despair, wondering where they had gone wrong and why it was taking so long for the country to recover. The arrival of the 2004–2012 commodity boom changed all that.

Officials trot out figures which appear to show productive foreign investment pouring in. But ask any foreign business group or investment bank analyst and they leave no doubt that investors have Indonesia firmly on the back burner.

There are different reasons for this. Admittedly, many centre on the general economic slowdown, with commodity prices still in the doldrums, domestic consumption sinking and a sluggish China weighing down hopes of an imminent world-wide recovery.

But that’s not all. In private forums, businessmen complain about regulatory uncertainty and cloying red tape; they talk of ministries working at cross-purposes and the economic coordinating minister seemingly incapable of getting them on the same page.

In places like Malaysia and China, start-up ventures are lavished with new buildings, modern technology and attractive incentives. In Indonesia, there’s nothing but bureaucratic obstacles, poor infrastructure and a take-it-or-leave-it attitude among senior officials.

One large global company, for example, still can’t secure approval to import a common agriculture commodity for its processing plant—a necessary contingency plan in the event that Indonesia is unable to produce enough to keep it running at full capacity in the future.

Two Korean companies hoping to set up garment and shoe factories in Central Java to take advantage of cheaper labour costs found they had acquired land that was either in the middle of nowhere or not zoned for industrial use.

The list of gripes go on, topped by the Manpower Ministry’s policy of slashing work permits and its recent decision to force all non-resident directors and commissioners to obtain temporary permits, whether they attend meetings in Indonesia or not.

Like the media restrictions, you would think it would take only a phone call to resolve. Instead, Widodo demonstrated his ignorance of procedures by saying he wanted to scrap temporary stay visas. That would leave the related work permit issue untouched.

Foremost among the mixed signals is the Government’s fixation on adding to the so-called Negative List—sectors where foreigners aren’t permitted. Yet even in areas where foreign investors are encouraged, such as the creative economy, they’re only allowed minority ownership.

Another complaint is the Government’s requirement for foreign-owned projects to use local content. It’s not that it can’t be done, but the way officials beat investors over the head with it. Similarly with a new requirement for all companies engaged in public service to build data centres, even if there is no need for them.

In this climate, the targeted incentives on offer in neighbouring countries are almost unheard of. Instead, by far the most common complaint is the whimsical introduction of regulations, which are both unclear and lacking in the certainty necessary for business plans to work.

A classic template is the 2009 Mining Law, the broad provisions of which were initially greeted with cautious enthusiasm. Then three years later, the Government came up with implementing regulations that changed everything, giving miners an impossible year-long deadline to build smelters.

Instead of facing up to reality, Indonesia plays its now-familiar game of smoke and mirrors. Beef prices are at record levels because the Government continues to restrict meat and live cattle imports in an effort to show it has attained self-sufficiency. It hasn’t and it probably never will.

Indonesians are assured that the looming El Nino weather phenomenon, which meteorologists are warning could be even worse than the devastating 1997–98 event, will have little impact on agriculture. But the impacts are already being felt, and no-one knows how much more is to come.

Then there was the recent spectacle of President Widodo attending the ground-breaking ceremony for a 2,000-megawatt Japanese-funded power station, hailing it as an example of the Government removing bottlenecks to infrastructure development.

Yet buried in the stories appearing in local newspapers was the revelation, well-known to most people who follow the power industry, that developers still have to win a years-long battle to acquire a crucial 10% of the land.

On that front, little has changed. Despite having the state-owned Pertamina oil company as a partner, land issues meant it took ExxonMobil more than a decade to finally get East Java’s Cepu oilfield on stream. The reason, according to one senior energy official: ‘too much democracy.’

For all the bluster aimed at a gullible domestic audience, Indonesia is losing the perception game where it counts: out in the world. But before new chief economic minister Darmin Nasution can come up with ways to turn that around, he must first convince ministers and bureaucrats alike that carrots work better than sticks.

Last weekend’s commemorations of the centenary of the Gallipoli landings was the ultimate expression of our habit of reflecting on the causes, conduct and consequences of war at the time of major anniversaries. Unfortunately, Australia’s major wars of the twentieth century occurred, with remarkable precision, at quarter-century intervals. Thus the centenary commemorations of 1914–18 will overshadow the 75th anniversaries of major turning points in the Second World War and the 50th of those of the Vietnam War.

Fifty years ago this week, Prime Minister Robert Menzies announced the commitment of the first battalion of Australian combat troops to Vietnam on 29 April 1965. Ten years later, on 30 April 1975, the war ended as North Vietnamese tanks crashed through the gates of the presidential palace in Saigon. In a particularly cruel irony, the Australian ambassador closed our Saigon embassy and headed for the airport five days earlier—the 60th anniversary of the Anzac landing.

If Gallipoli had occurred, say, a year earlier or a year later, those anniversaries might now prompt a substantial discussion of the rights and wrongs of the Vietnam War and its implications for many areas of Australian political and social life: grand strategy, military operations, conscription, and the physical and mental health of veterans. Instead, we have only a few references in public discussion.

That gap matters. While the scale of our 1965–72 commitment does not compare with that of 1914–18—to use one crude but telling index, 521 service personnel dead from a population of about 12 million compared with 60,000 from a population of less than 5 million—the impact of Vietnam is more immediate. Any new commitment, especially as part of a coalition led by the United States, is still likely to meet the challenge: ‘Is this another Vietnam?’ And the current Minister for Veterans’ Affairs takes every opportunity to say that our Iraq and Afghanistan veterans must be treated better than those from Vietnam.

So how should we look at the Vietnam War, half a century on? First, it was not a case of Australian involvement in ‘other people’s wars’. As far as Robert Menzies was concerned, it was more a matter of getting the US to fight Australia’s wars. Australian strategy was based on the need to keep Britain and the United States committed to the security of Southeast Asia, which clearly mattered more to Australia than to northern hemisphere allies.

Menzies, it seems, feared American isolationism more than American overreach. He, and those from whom he chose to take advice, found it difficult to believe that the United States, if fully committed to a conflict, could be defeated. It was a huge miscalculation, but understandable given Menzies’ personal experience as a young man during WWI, which the US did not enter until 1917, and as Prime Minister in 1939–41, before Pearl Harbor. To him, and others of his generation, what really mattered was Washington’s commitment: if the Americans were involved, it seemed, success was certain.

Australia had a very specific reason to be concerned about American policy. In the early 1960s Australians were deeply concerned about another, much closer, Southeast Asian conflict. Australian forces were supporting the new federation of Malaysia against Indonesia’s ‘confrontation’. It was a low-level conflict, but Australian policymakers constantly feared that Indonesia might raise the stakes, not only on the Malayan peninsula but also across Australia’s only land border—between Indonesia’s West New Guinea and the Australian territories on the eastern half of the island (today’s Papua New Guinea). When Australian ministers asked American officials at what stage Indonesian aggression might prompt support under ANZUS, the Americans clearly hinted that much would depend on Australian support for the American position in Indochina.

The Vietnam War was not about regime change, but about regime defence. There was never any intention to overthrow the communist government in Hanoi: the aim was only to prevent the fall of an anti-communist government in the south. In that sense, Vietnam was more akin to the first Gulf war of 1991 than to the Iraq invasion of 2003.

Above all, we should remember what else was happening in Southeast Asia in 1965. The Indonesian Communist Party was the third largest in the world. President Sukarno said 1965 would be a ‘year of living dangerously’ with the support of a ‘Beijing-Jakarta’ axis. Tensions between Kuala Lumpur and Singapore would soon lead to the ejection of Singapore from Malaysia. Thailand faced a substantial communist insurgency in its northeast. It is hardly surprising that many of the region’s ‘dominoes’—most publicly Singapore’s Lee Kuan Yew—fervently urged the Americans not to withdraw. We learn from Jeremy Hearder’s new biography of Sir James Plimsoll that Indian generals were expressing a similar view in early 1965.

By 1968–69, much had changed in the region. Indonesia was now securely under the anti-communist President Suharto. Malaysia and Singapore were functioning better apart than together. Thailand had its internal insurgency under control. The formation of ASEAN in 1967 indicated that these non-communist nations were willing to collaborate better. In short, the only dominoes likely to fall with South Vietnam would be Laos and Cambodia.

For Australia and many other countries in the region, the 1965 commitment by the United States and its allies served a purpose, but the strategic gains were achieved by the end of the 1960s. The real tragedy of the Vietnam War was that it continued well into the 1970s, at huge cost to all external participants, and most of all, to the Vietnamese people.

 

Amid the attention given to the installation of a new government in Canberra, the Australian media didn’t, as far as I’m aware, notice the death in September of Chin Peng. That name probably means little or nothing to most Australians today but in the 1950s, as the leader of the communist insurgents during the Malayan Emergency of 1948-60, he was regarded as ‘Public Enemy Number One’ by British countries, which in those days very much included Australia. His story is important for Australians, and not just because Australians fought and died during the Emergency. And there are reasons why his death was noted in the major American media, even though the United States wasn’t engaged in the Emergency.

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A quick first read of the principal ‘strategic environment’ chapters of the new White Papers (Chapters 2, 3 and 6) gives a broad feel for the document as a whole. The overall tone of the document is consistent with the National Security Strategy, depicting a regional environment that’s simultaneously cooperative and competitive, and an Australian strategic approach that attempts to both shape and hedge.

There’s an occasional jerkiness to the document’s flow, as if more than one hand has been attempting to insert messages—not surprising in any government document that underpins future funding. That jerkiness is most evident at the start of Chapter 3. Para 3.3 contains, oddly, a long and detailed equipment list at the opening of an argument about Australian strategic interests. Paragraph 3.4 abruptly changes tack and argues that Australian strategic policy is really about shaping rather than hedging. It’s followed by two paragraphs on hedging before para 3.7 returns to the theme of shaping.

Along the way some important and astute observations emerge. Para 3.19, for example, identifies one of our key strategic goals—a non-coercive regional order. But those observations sit alongside other paragraphs which seem overly restrictive in how we might pursue that goal: para 3.47, for example, seems an ADF-centric view of how Australia might attempt to influence the unfolding regional transformation. Read more

A recent Strategist post suggested that Canberra should take a closer look at ‘80-20’ solutions in the forthcoming Defence White Paper. In essence, it argues that Canberra should consider simple and cheap technologies which provide similar military capabilities in lieu of the more expensive and technologically complex options. This is sage advice, to which I would add that talk is cheap—literally. One of the most effective (and most affordable) ways that Australia can protect its strategic interests is to increase its investment in defence diplomacy.

Australia is already involved in a constellation of security-focused dialogues such as the ASEAN Regional Forum and the East Asia Summit. However, if Australia is serious about promoting its interests and engaging the region it should intensify its involvement in track II, or informal, dialogues. Track II dialogues are ‘unofficial’ meetings which bring together academics, think tank scholars, non-governmental organisations, policy experts and officials in their unofficial capacities. These gatherings provide a political space for them to exchange policy ideas, identify emerging security concerns, and communicate with other countries regarding their strategic interests. The ‘informal’ nature of these meetings means they are relatively free of diplomatic constraints; thus, participants can trade information, test new ideas, and most importantly, confront sensitive security matters before they require an official or military response. Much to the detriment of Australian security diplomacy these processes are currently underutilised and underappreciated. Read more