Indonesia has recognised that security affairs in its region are no longer business as usual, though it hasn’t completely given up its commitment to strategic autonomy.

Its biggest step was a Defence Cooperation Agreement (DCA) signed with Australia in August 2024. The agreement acts as a de facto status-of-forces agreement, providing for the presence of foreign forces in Indonesian territory, traditionally an uncomfortable idea for the country.

Jakarta has also stepped up specific defence cooperation with other countries over the past five years, notably with Australia. The United States has also become a closer partner.

While China’s strengthening presence in Southeast Asia is an obvious factor in Indonesia’s diversification of defence relationships, Jakarta declares no policy of trying to counterbalance Beijing. Moreover, it is still far from tying itself down in close and permanent security relationships. Instead, Indonesia adopts a more nuanced approach.

Indonesia lacks a formal strategy to navigate great power competition. However, its impartial stance—rooted in what it calls its ‘free and active’ foreign policy—has resulted in a hedging strategy, balancing economic ties with China and strong political relations with the US and its allies. Meanwhile, Indonesia is expanding its global engagement through active participation in regional and international organisations, including the Association of Southeast Asian Nations and the United Nations, and through south-south cooperation.

Following its cautious foreign policy, Indonesia avoids alliances with great powers. This approach has allowed it to maintain neutrality and stay ‘defensively active’ for decades. Yet, Indonesia has begun to break from this tradition.

Indonesia’s Ministry of Defence aims to increase the defence budget from 0.8 percent to 1.5 percent of GDP. In recent years, Indonesia has signed several arms acquisition deals. These include buying 42 Dassault Rafale fighters from France for $8.1 billion, 12 drones from Turkey worth $300 million and 24 Sikorsky S-70M Black Hawk helicopters from the US.

In the past five years, Indonesia has deepened various bilateral defence relationships. Australia has become a prominent partner, engaging in 48 defence diplomacy activities. These activities saw steady growth throughout the past five years, with the 2024 DCA as the pinnacle of their cooperation.

The 2024 DCA between Indonesia and Australia is their greatest commitment yet to enhancing defence collaboration and addressing shared security challenges. For Indonesia, it is historic as it allows military drills and mutual force operations within each other’s territories. For Australia, this agreement offers better operational proximity to potential flashpoints, such as the South China Sea.

Although yet to be a status-of-forces agreement, the DCA reinforces previous arrangements. It establishes a legal framework to enhance military cooperation and joint activities between the two countries. The agreement also includes provisions for enhanced educational exchanges and closer maritime operations.

However, this agreement does not signal Indonesia’s alignment with any bloc. The country continues to balance its relationships with major powers, staying true to its principle of strategic autonomy.

In 2023, Indonesia elevated bilateral ties with the US to a comprehensive strategic partnership, expanding defence cooperation, including joint exercises such as Garuda Shield. Simultaneously, Indonesia reinforced diplomatic ties with China and the two countries issued a joint statement in 2024 claiming ‘common understanding on joint development in areas of overlapping claims’ in the South China Sea. This sparked controversy among maritime law and international relations experts. It appeared to contradict Indonesia’s long-standing policy of strategic denial regarding China’s territorial claims in the South China Sea.

Additionally, Indonesia has sought to diversify its defence partnerships by engaging with other Global South middle powers, including Turkey, India and Brazil. Indonesia’s recent decision to join BRICS is also motivated by its willingness to enhance cooperation and collaboration with other developing countries.

The depth of the Indonesia-Australia DCA reveals several key aspects of Indonesia’s approach. First, as great power competition increases, Indonesia is moving beyond its ‘defensive-active’ strategy. Indonesia is now integrating bilateral strategies alongside multilateral approaches to better navigate the evolving security landscape.

Second, Indonesia’s deepening ties with Australia through the DCA serve as a regional safety net in its hedging behaviour. Consequently, Indonesia must reassure other countries that the DCA with Australia aims to enhance cooperation and doesn’t signal alignment with the West.

Finally, while it has shown adaptability in recent years, defence capacity remains crucial for Indonesia to maintain its independence and increase its bargaining position in the geopolitical landscape.

The DCA, alongside global engagement and enhancing defence capacity, indicates Indonesia’s shifting strategy to face the increasingly competitive environment while maintaining its strategic autonomy.