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After days of intense negotiations with the Indonesian government, Alphabet, Meta and more than 9,000 technology firms—8,900 of which are local—finally complied with Indonesia’s new licensing regulations last month to avoid being banned from operating in one of the world’s largest and most dynamic internet economies. Meanwhile, some companies that failed to meet the deadline (including Steam and PayPal) faced a nasty surprise in late July when they were temporarily blocked from their hundreds of thousands—if not millions—of users in Indonesia.
The regulation, formally known as the Minister of Communication and Informatics Regulation No. 5 of 2020 on Private Electronic System Operators (MR5), requires digital platforms to apply for licences to operate in Indonesia. But to gain such a licence, they must consent to several terms, including agreeing to comply with government requests to access user data and take down online content.
While the regulation was passed in November 2020, digital platforms were initially under no pressing obligation to register. But on 22 June, the Communication and Informatics Ministry announced a hard deadline of 20 July, threatening that internet service providers would block access to unregistered platforms.
Digital transformation is one of the four pillars of Indonesia’s presidency of this year’s G20, and officials are using its momentum to accelerate implementation of a long list of cyber legislation and policies that have been in the pipeline, including a draft bill on data protection, a national cybersecurity strategy and MR5.
At its core, MR5 paves the way for Indonesia to expand its reach in cyberspace by solidifying its power to control citizens’ data and online activities. By implementing this regulation, Indonesia has joined a host of nations—from Germany to India—in imposing a legal framework that forces platforms to accept local jurisdiction over their content and users’ data policies.
Indonesian officials say that the regulation will make taxing foreign tech firms easier. With greater access to transaction data, the government can impose income tax on foreign digital platforms not located in Indonesia, on top of the value-added tax already imposed on digital goods. Indonesia’s internet economy is growing rapidly, and the government sees online transactions as a potential source of revenue. In the first half of 2022 alone, US$166.8 million in value-added and income taxes was collected from digital companies and services in Indonesia.
There are also other economic implications of MR5 that are not explicitly mentioned. For instance, tech firms are likely to be forced to expand their content-moderation capabilities, which would help with state goals of job creation in the tech sector. There are also expectations that foreign tech platforms will set up businesses in Indonesia, which will also help to develop human capital and have spillover benefits for infrastructure development.
While these economic imperatives are fair justifications for MR5, especially considering the government’s focus on post-Covid-19 economic recovery, social and political concerns still leave it potentially risky for individual rights. MR5 has prompted backlash from civil-society organisations, which fear that the new regulation may impinge on civil liberties. Thousands of Indonesians have signed a petition calling for the regulation to be revoked. The registration website was even hacked before being taken down temporarily in late July.
The requirement for platforms to consent to provisions with clear authoritarian undertones has also come under fire. Plenty of coverage was given to Article 9 of the regulation, which allows the government to take down content that may ‘disturb public order’. Such loosely worded provisions are common in Indonesian legislation governing speech in cyberspace and have been misused by authorities to arrest individuals accused of blasphemy and treason.
Most worryingly, MR5 includes a controversial provision allowing the government to demand access to electronic data without needing a court order. This isn’t the first time the government has sought to gain such access; in 2019, a similar provision was included in a government-sponsored cybersecurity bill. While some digital platforms are likely concerned about the impact of this provision on existing privacy laws, the absence of a mechanism for appealing against requests to take down content has made their decision even more difficult.
Responding to fears that the regulation may be used to curb civil liberties, officials tried to reassure the public that it would not be misused and instead would allow the government to respond more quickly to the growth of illegal companies, like unregistered peer-to-peer lenders. The ability to take down content will also empower the government to quickly remove material produced by criminal organisations, separatist movements and terrorist organisations.
However, Indonesia’s internet regulations have been weaponised to target activists in the past. For example, Indonesians have been arrested under the notorious Electronic Transaction and Information Law, which many organisations, politicians and government authorities have used to counter accusations of misconduct. The concern that MR5 may be similarly abused therefore has some validity.
At its core, MR5 is about Indonesia’s attempt to assert state power over its cyberspace. The regulation positions the government to take advantage of a rapidly expanding digital economy—estimated to be worth US$124 billion by 2025. Yet the government must also work to foster public trust in the internet as an avenue for communication and trade. While this partly means ensuring Indonesians can trade safely online, it also means ensuring that authorities don’t misuse their power by either infringing on people’s right to freely express themselves or illegally accessing private user data for malign purposes.
The G20 foreign ministers’ meeting on 8 July in Bali was almost certainly a harbinger of the G20 leaders’ meeting scheduled for later this year, and a graphic illustration of why the G20 in the current circumstances is both teetering on the brink of pointlessness and incidentally irreplaceable.
Ending without a joint communiqué and group photo, the central meeting sent two clear messages. The world will lose nothing by G20 members not boycotting the event. But nor will it likely gain anything from a meeting bound to be marked by bitter disharmony and drama. Not even a communiqué. Or a photo.
On that measure, the Bali meeting was a failure. That wasn’t Indonesia’s fault. No host could have done any better at cushioning the clash of values and interests currently defining relations among the G20’s members, especially since Russian President Vladimir Putin’s attack on Ukraine.
The meeting just made that clash more graphic. Just like at the G20 finance ministers’ meeting in Washington in April, a protest walkout took place. But this time the walker was Russia’s Sergei Lavrov, professing his indignation at Western ministers’ ‘frenzied’ condemnations of his country’s behaviour as that of ‘aggressors, invaders, occupiers’. Evidently the truth hurt.
Not content with one theatrical, fuming march from the room, Lavrov reportedly also left the premises just before Ukraine’s foreign minister, Dmytro Kuleba, addressed the room virtually as a special guest.
Not that Lavrov enjoyed a monopoly on such moves. Unwilling to sit anywhere near him, G7 ministers had absented themselves from a welcome dinner held the night before that he had happily attended. This time the condemnation came from the walker himself, who chided his erstwhile G8 counterparts for their bad manners. ‘This,’ tut-tutted the minister whose troops are firing missiles into schools, residential buildings and shopping malls, ‘is how they understand protocol, politeness and code of conduct.’
Pressed for her reaction to her G7 counterparts’ manners, Indonesian Foreign Minister Retno Marsudi was more interested in underscoring her intention of ensuring her guests’ comfort. ‘We are trying to create a comfortable situation for all,’ she insisted, adding that she understood ‘the situation because once again, everyone has to feel comfortable’.
How comfortable Marsudi was with her Russian guest’s behaviour, however, can only be the subject of speculation. But presumably she would at least have been nonplussed by Lavrov’s absence from plenary discussions on the food price inflation and insecurity caused by Russia’s invasion and blockade of Ukrainian grain exports, as German Foreign Minister Annalena Baerbock has disclosed.
After all, she and her president, Joko Widodo, had visited Moscow less than a fortnight earlier not only ostensibly to persuade Putin to give peace a chance but also to allow Ukrainian wheat to make its way to a hungry world, including millions of noodle-loving Indonesians. That her other guests were so determined to stress that Russia had stopped neither its brutality nor its blockade despite Widodo’s ‘peace mission’ must have sat uncomfortably with Lavrov’s assertion in his own speech that Russia would ‘continue to make a significant contribution to ensuring access to food and energy resources’—presumably by shipping more of its own wheat and what it’s allegedly stolen from Ukraine.
According to the Russian news agency TASS, however, Lavrov enjoyed the sympathy and support of his country’s other G20 partners. Russia’s foreign ministry issued a statement dutifully conveyed by TASS claiming that there had been ‘sober assessments of the objective causes’ of the prevailing global economic shocks that were principally the fault of ‘the West’, and that ‘many partners gave a clear signal that it’s unacceptable to isolate Russia’. The same source indicated widespread support for Russia’s contention that ‘a polycentric structure of the world order and the democratization of global governance’ were necessary, along with ‘a broader engagement of dialogue on multilateral platforms to solve the problems of developing countries’.
Lavrov no doubt emphasised Western culpability for all these problems, Russia’s credentials as the developing world’s champion, and the advantages of ‘polycentricity’ in his meetings with ‘counterparts from Asia, Africa and Latin America’ on the event’s margins. How many actually bought such self-serving misdirection remains unknown, but it probably registered sweetly in the ears of those most inclined to cast international affairs in a similar, doctrinal light, including a few among Marsudi’s own lieutenants in Indonesia’s foreign ministry.
Others also took full advantage of the opportunity for sideline meetings, not least both the United States and China. Their own bilateral meetings, judging by official US statements, were both extensive in their subject matter and ‘candid’. But subsequent critical remarks from each about the other suggest that however welcome their meeting was as an avenue for discussing opportunities for more bilateral cooperation on such matters as climate change, global health and food security, their divisions over Taiwan and the South China Sea, among other issues, remain as deep and entrenched as ever.
For different reasons, Chinese Foreign Minister Wang Yi’s meeting with Widodo on 11 July in Jakarta was almost as significant if far less candid. Besides expressing China’s appreciation for Indonesia’s able and ‘wise’ chairing of the G20, as Marsudi explained to Indonesia’s media, Wang praised Widodo’s peace mission to Ukraine and Russia. The pair also discussed a raft of bilateral commercial and health sector issues, as well as progress on projects partially funded under China’s Belt and Road Initiative, including the controversial and troubled Jakarta–Bandung high-speed railway project.
From an Australian perspective, Foreign Minister Penny Wong’s sideline meeting with Wang in Bali was another welcome development, if merely a first, tentative step in the direction towards a relationship restored at least to a level that China has with most other liberal democracies.
The Bali meeting also afforded an opportunity to stage a meeting of MIKTA, the grouping of Mexico, Indonesia, Korea, Turkey and Australia, on the margins. According to the Mexican foreign ministry, the participants discussed the war in Ukraine and ‘mechanisms to assure the availability of, and trade in, grains and fertilizer, along with the theme of migration’.
What good this side meeting achieved remains to be revealed. But if the original rationale for MIKTA was the unique role that these non-G7, non-BRICS countries collectively might create for themselves in conceiving and steering solutions to critical global issues in the context of the inherent tensions arising from the G20’s eclectic mix of political systems and developed and emerging economies, the need for actually doing that has surely never been more urgent.
Hopefully such a disparate minilateral grouping can rise to the challenge. Its members should try. Doing so would help preserve the G20’s credibility, and that’s in all their interests. But it’s easy to be sceptical that it can. It’s even easier to predict that it won’t.
The Bali meeting would therefore appear to have been more valuable for what happened around it than within it. That may well be the same story come November when the leaders gather and hold their own bilaterals on the margins.
That’s not enough to give a ringing endorsement for a body whose achievements, thanks to its widening internal divisions, have been few in recent times and risk being non-existent this time. It may not be enough to dispel whatever doubts have arisen and strengthened in capitals about the G20’s worth—doubts that in some were there from the beginning.
But given the dire, disorderly state of international affairs today, its marginal meetings should probably be reason enough even for the major powers to persist with it until such time as conditions are more conducive for the constructive cooperation that marked the G20’s earliest years—a moment that seems inconceivable so long as Putin reigns in the Kremlin.
By embarking on a ‘peace mission’ to Russia and Ukraine after attending the G7 summit in Germany, Indonesia’s president, Joko Widodo, will be following in few footsteps and with, at best, no greater likelihood of ending Vladimir Putin’s war than those who have tried so far.
A generous interpretation of the mission would define it as an exemplar of Indonesia’s cherished ‘independent and active’ foreign policy. Jakarta has never tired of reprising the ‘independent’ or non-aligned part of this phrase from the moment Russian troops began their brutal rampage.
It was in this self-declared even-handed spirit that Jakarta framed its initial formal response to the invasion, which wilfully avoided naming the invader and called on both parties to pursue a ‘peaceful resolution through diplomacy’, as if both sides were somehow equally intent on war. It was also inherent in Indonesia’s abstaining (like India, Brazil and 55 other states) in a UN vote to suspend Russia from the Human Rights Council, contrary to a majority of over 90 member states that ensured Moscow’s ejection from the body.
The visit to the two warring capitals, however, could be seen as corresponding to the ‘active’ part of the doctrine, as enunciated by one of modern Indonesia’s founders, Mohammad Hatta. The country’s first vice president, Hatta said the early republic’s foreign policy was ‘constructed … for the purpose of strengthening and upholding peace’, and to that end Indonesia would ‘work energetically … through endeavours supported if possible by the majority of the members of the United Nations’.
Widodo himself seemed to be invoking the spirit (if not the name) of Hatta in explaining the purpose of his mission before departing for Europe. ‘I am going to visit Ukraine,’ he said, with the aim of inviting ‘the President of Ukraine, President [Volodymyr] Zelensky, to open up opportunities for dialogue in the context of peace’.
He intended achieving the same goal through his trip to Moscow. He would replicate his overture to Zelensky by also inviting Putin to open a dialogue with his Ukrainian counterpart and ‘as soon as possible … make a truce and stop the war’.
Widodo was evidently just as determined to remind the G7 nations of the need for peace. ‘We will encourage and invite the G7 countries to work together to broker peace in Ukraine,’ he said, ‘and also to find an urgent solution to deal with the food and energy crisis that is engulfing the world.’
A generous soul might also think that Widodo believes his mission has some chance of success and give him credit for trying. And many Indonesians must have generous souls, judging by media commentary.
In praising Widodo for the initiative, one notable Indonesian foreign policy commentator has, for example, argued that rather than seek an end to the conflict, he should press for a ‘ceasefire’, since Indonesia lacked the resources and presence in the region to broker a resolution. Widodo’s intervention would help save Russia’s face and give Ukraine a chance to avoid further humanitarian tragedy.
More critical observers, however, would see all this as quixotic at best, bunkum at worst.
Zelensky is probably among them, however polite his welcome is. A leader who understandably has placed a premium on receiving tangible support for his country’s defence rather than platitudes about peace, Zelensky is probably struggling to see the point of his Indonesian counterpart’s visit, at least so far as Ukraine’s interests are concerned.
Widodo represents, after all, a country that has resisted imposing sanctions on Ukraine’s attacker and whose broad public commentary, as Ukraine’s embassy in Jakarta would have reported, has tended to swallow the Russian lie that the principal cause of the war was Ukraine’s and NATO’s alleged provocation. And Widodo’s line that he would be urging both his interlocutors to seek dialogue would likely strike a man battling to stave off hundreds of thousands of invaders intent on destroying his nation’s independence as galling false equivalence. And he’d be right.
The kindest assessment of Widodo’s visit to the Kremlin is that it is naive and ill-judged—if indeed he really thinks he can broker even a ceasefire, let alone a dialogue. However even-handed Widodo might believe his approach is, in effect it stands to serve Russia’s interests far more than Ukraine’s. Putin won’t pay a jot of notice to Widodo’s appeal. Instead, he will exploit the visit for his own propaganda purposes. Stand by for photos of the two beaming presidents shaking hands.
A more compelling explanation for Widodo’s mission than the pursuit of peace is Indonesia’s—and his own—self-interest. Widodo’s aspiration to host a successful G20, and thereby showcase Indonesia and post-Covid Bali, is one element of this.
Comments from Germany’s Chancellor Olaf Scholz and European Commission President Ursula von der Leyen at the G7 suggest that a European boycott of the Bali G20 summit in response to Putin’s attendance now looks less likely than earlier. Scholz has insisted, for example, that Germany does not want to ‘torpedo’ the G20.
But Widodo would be keen to remove any risk of this by shoring up the compromise originally touted by US President Joe Biden and now advanced by Widodo himself of having Zelensky attend the summit as a special guest. Presumably this reinvitation will be the first of Widodo’s talking points in the meeting in Kyiv.
Widodo’s primary objective in Moscow, however, is likely to be an end to Russia’s effective blockade of Ukraine’s grain exports, which he has cast in a non-aligned mould as a move that would help alleviate the hardships many are experiencing in developing nations because of the war.
None would benefit more from this than his own country. Indonesia is the world’s largest importer of wheat (by dollar value) and sourced 25% of its imports from Ukraine in 2021. Ukraine was Indonesia’s largest supplier of wheat in 2020.
The grain is used to make noodles, which have become a popular, relatively cheap staple for many millions of Indonesians. But shortages of wheat and wheat flour have hurt consumers and producers alike, significantly reducing production of wheat-based foodstuffs and sparking price inflation. Widodo’s administration faced widespread protests over a similar price spike in global cooking oil prices resulting from war-related shortages of that commodity, prompting a short-lived export ban on Indonesian palm oil and, recently, the sacking of Indonesia’s trade minister.
The longer the war and the resultant disruptions in Ukraine’s wheat and sunflower oil exports persist, the higher the risk of steepling food prices, which historically have presaged political unrest in the archipelago.
Street protests over inflated food prices would likely be the last thing Widodo would want as he waits expectantly for his G20 guests to arrive in Bali. But by going to both the capital of the source of those imports and the lair of the person blocking them, he can at least tell his citizens that he has done everything in his power to ease their burden.
For some, therefore, Widodo’s mission to Moscow might well conjure up memories of the idealism of Hatta as he forged an admirable new identity for a nation and people hitherto victimised by Western colonialism during the tensions of the Cold War.
But for others, it’s at least as much about noodles.
Anthony Albanese last week successfully passed what has become a foreign policy initiation for new Australian prime ministers: he established a good working relationship with his Indonesian counterpart.
Whether Albanese’s business-like exchanges with Joko Widodo grow into a personal rapport—or leadership ‘trust’ as Indonesian observers prefer—will depend on personal chemistry and circumstances.
But at least the visit set the tone for a productive phase in Australia–Indonesia relations. History shows us two things. First, much more gets done in the bilateral relationship when the two leaders get along. And, second, structural consolidation of ties usually occurs in distinct stages when the two sides seize on opportunities that are often created by unforeseen events.
The Indonesians were keen to ensure the first point by creating a familiar mood for the visit.
This was publicly illustrated by what might come to be known as ‘bamboo bicycle diplomacy’. Widodo and Albanese peddled around the gardens of the presidential palace at Bogor on bikes built with a bamboo frame—the quirky invention of a designer from Central Java.
The image of the two leaders riding side by side was used widely in the Indonesian media and played to Widodo’s carefully crafted image as an ordinary man. Some of his predecessors would more likely be seen astride Harley Davidsons. This little bit of theatre also usefully advertised Widodo’s purported commitment to transitioning Indonesia to clean new and renewable energy.
The ‘spontaneous’ ride wasn’t without its humour. Indonesia’s foreign ministry, which came up with the idea, had to first check with the Australian embassy whether Albanese could ride.
The hitch came when Widodo wanted to gift the bicycle to Albanese—Australian officials needed to ascertain the quarantine status of the bamboo. According to one official, the Central Java manufacturer was dumbfounded by the complexity of the questions.
Whether or not the bicycle ever makes it to Australia, it served its purpose. We are left with a picture of two leaders who are outwardly easy and relaxed in each other’s company—a subtle message that will resonate in Indonesia. When asked about the visit, Indonesians referred to the guy on the bicycle. At least Albanese will be remembered.
On the substantive agenda, the single most valuable signal Albanese sent on his visit was that Australia would play its part to ensure the success of this year’s G20 leaders’ summit, being hosted by Widodo in Bali in November. Widodo has a lot personally invested in the outcome, both domestically and internationally. Albanese confirmed that he would attend the meeting, distancing himself from his predecessor Scott Morrison’s comments that Russia should be expelled from the grouping and that Russian President Vladimir Putin’s presence would be a ‘step too far’.
This was the right call. While sorting out the diplomacy over Russia at the G20 won’t be easy, Australia is wise to keep its options open and to signal that its first priority is to secure the endurance and viability of the G20. As others have observed, it is the best international table at which Australia has a seat.
With the G20 diplomacy set aside for now, Albanese’s first encounter as prime minister with Indonesia sensibly emphasised shared economic interests rather than some of the thorny geopolitical issues of the day, on which Australia and Indonesia will not always agree.
There’s much that Australia and Indonesia can do together with refocused attention on the relationship. The opportunity to be seized arises from heightened fears that a global slowdown and soaring inflation will choke a post-Covid-19 recovery. It also arises from an awareness that regional strategic competition necessitates diversifying markets and sources of capital.
This could give renewed impetus to greater trade and investment. The economic relationship has been historically underdone. In 2020, Australia exported about $7.1 billion in goods and services to Indonesia and imported about $5.7 billion in return. It amounts to a small surplus in Australia’s favour, but Indonesian officials would like to close the gap. The pool of investment is similarly weak: Australia has about $3.2 billion invested in Indonesia, and Indonesia has about $1.8 billion invested in Australia.
The Australian government has long recognised this weakness. It was a key finding of a report from former Department of Foreign Affairs and Trade official Richard Maude to the Morrison cabinet, according to government officials. Maude’s report led to DFAT being asked to draw up a new Indonesia strategy, which is due to be completed by the end of the year.
But Australia already has the framework for economic engagement in place. The Indonesia–Australia Closer Economic Partnership (IA-CEPA) is far from being a perfect trade and investment agreement, but it provides a solid foundation to grow and diversify economic relations.
The previous government identified several areas in a blueprint for the partnership released last September. The blueprint targeted growth in mining and energy services; agriculture and processed food; health and aged care; and education, skills and training. The new government would be wise to pick this document up and build on it.
Still, it can be more ambitious. Two areas in which there’s potential to grow are the service economy—in, for instance, education, technology, health care, tourism and business advisory services—and infrastructure investment.
The first of these will require a new approach to labour mobility in both directions, which has been recognised as a missing ingredient in relations. This is not an easy proposition for either government, but it’s a necessary one if we are to establish deep and enduring people-to-people ties and better integrate the two economies.
The second could see some of Australia’s pool of retirement savings tap into Indonesia’s growing need for new sources of clean energy, transportation and other infrastructure.
But the investment model has to be right. And that might entail Jakarta issuing new regulations on investment vehicles and showing a willingness to flexibly deal with challenges faced in making individual investments. One approach that appears to have worked well in India is a fund in which foreign and national institutions pool their money and directly acquire infrastructure assets.
At a political level, these types of initiatives would play well with the natural games of Albanese and Widodo—two leaders whose backgrounds and agendas are steeped in infrastructure.
Whatever the two governments do, it’s a good time to set high ambitions. Of course, there will be plenty of failures and setbacks, and these should not detract from the mission. Another lesson from diplomatic history is that when Australia moves decisively and boldly in supporting relations with Indonesia at critical times, the rewards are long-lasting.
Anthony Albanese’s first state visit to Indonesia as prime minister saw economics and investment at the top of the agenda, subjects of particular interest to President Joko Widodo. Considering that digital technology is becoming an ever more ubiquitous part of everyday life, cybersecurity should emerge at the top of the agenda in future Australian engagements with Indonesia.
Cybersecurity and technology are among the areas in which there’s strong potential for cooperation between Australia and Indonesia. In 2018, the two countries signed a memorandum of understanding on cyber cooperation that led to regular cyber policy dialogues, allowing officials from multiple agencies to share best practices. In September last year, officials from both sides signed an agreement on cyber and emerging cyber technology cooperation, which committed the parties to, among other things, cooperating on information-sharing on national cyber strategies and coordinating on cyber incident responses.
Mutual interest in advancing cyber cooperation is unsurprising. Cyber engagement is a useful way for Australia to leverage its competitive advantage in cybersecurity research and training by providing Indonesia, a growing trade partner, with the necessary know-how to address challenges in cyberspace. As a major technology hub in Southeast Asia with an internet economy expected to reach $173 billion by 2025, Indonesia is an attractive market and investment target for Australian information and communications technology companies and venture capital.
For Indonesia, cooperation with Australia will allow it to improve its cyber resilience and address major shortcomings that are blocking the country’s effort to become a leading digital economy in Southeast Asia. Despite the rapid growth of its digital economy in the past five years, Indonesia still lacks the talent to support its digital ambitions. Its ICT infrastructure also remains insufficient to connect its 273 million geographically dispersed people.
At the same time, Indonesia suffers from multiple regulatory and organisational challenges and a lack of resources, which leaves the country vulnerable to cyberattacks. Indonesia’s national cyber and encryption agency estimated 888 million attempted hacks in Indonesia from January to August 2021. As recently as January this year, the data of 6 million Indonesian patients was allegedly leaked following a hack targeting the health ministry’s central computer system.
While bilateral mechanisms have emerged to foster cybersecurity and technology cooperation between the two countries, the framework is still at a nascent stage and there’s plenty that could be done to deepen cooperation.
Officials have started laying the groundwork to cooperate on a full range of cybersecurity-related issues, such as cybercrimes. It may be useful to work towards the initiation of joint training, official exchanges, and even threat information sharing. Considering the vulnerability of Indonesia’s critical infrastructure to data breaches, officials could conduct joint drills to help test cyber responses. Meanwhile, exchanging threat information will allow both the Australian and Indonesian governments to better understand their threat environments and work together to guard against cyberattacks.
Cybersecurity cooperation requires a whole-of-society approach that involves governments, firms and researchers in both countries working together to fill key capability gaps. It is fundamental that officials continue to facilitate links between businesses and research institutions to help sustain Australia’s relationship with Indonesia in the cyber domain.
Private cybersecurity firms from both countries should be encouraged to work together to combat cybercrimes and foster a more secure digital environment, particularly in Indonesia. Collaboration can come either in the form of practical sharing of intelligence or technical data or through ‘normative alliances’ advocating for changes in the ways companies deal with cybersecurity vulnerabilities. Encouraging collaboration between cybersecurity firms in Indonesia and Australia would also help ensure that an indigenous Indonesian cybersecurity community can become an effective force in the fight against cybercrime.
Deepened government engagement with—and among—research institutes, universities and vocational schools is also necessary. It was reassuring to hear Albanese announce that more specialised scholarships would be awarded to Indonesian postgraduates wanting to study subjects related to Indonesia’s G20 priorities, including digital transformation and the transition to sustainable energy.
Building on that, grants can be provided to encourage research collaboration. Indonesian researchers already have access to grants provided under Australia’s Cyber and Critical Tech Cooperation Program. However, more targeted grant programs—akin to the Australia–India Cyber and Critical Technology Partnership—focused on specific areas relevant to Australian and Indonesian cyber interests may be a useful way to foster research collaboration between Australian and Indonesian universities and researchers.
Beyond grants, Australian companies and universities should also consider working with their Indonesian counterparts to deliver scholarships and training programs to vocational schools and universities to help develop Indonesia’s digital talent. Notably, Chinese ICT firms are ahead of their Australian and other Western counterparts in investing in training in Indonesian universities.
More broadly, there are plenty of opportunities for Australian and Indonesian investors to expand collaboration in areas from telehealth to research and development. With growing mutual interests in each other’s digital economies, it is not just Australian companies investing in Indonesia—some Indonesian start-ups are also looking to invest in Australia. Indonesian e-commerce giant Bukalapak recently opened its first international R&D centre in Melbourne to tap into the city’s expanding tech opportunities.
In January 2018, Australia and Indonesia convened their first digital conference, which provided officials, industry professionals and tech specialists with a platform to share ideas, network and forge connections. As borders reopen, these kinds of events could be reconvened.
Finally, at the government level, it’s also necessary to boost cooperation in pushing for norms of responsible state behaviour in cyberspace. As two middle powers with burgeoning digital economies, Australia and Indonesia are both committed to a secure, stable and peaceful ICT environment. Beyond the threat of cybercrime, there’s the increasing threat of state-sponsored cyberattacks for political and economic gain, many perpetrated by great powers. Working with like-minded middle powers such as Japan and South Korea to call for states to commit to responsible behaviour in cyberspace could be the next stage in Australia–Indonesia cyber cooperation, particularly in multilateral forums. Calling for states to refrain from sponsoring cyber-enabled intellectual property theft at this year’s G20 summit in Indonesia could be an excellent place to start.
Both Australia and Indonesia want to deepen their economic engagement and, with the entry into force of the Indonesia–Australia Comprehensive Economic Partnership Agreement in 2020, there are indications that the two countries are on this trajectory. But to foster trust in the economic relationship, it is also necessary to build mutual cyber resilience.
Amid debate on initiatives such as the Quad and AUKUS, Malaysia and Indonesia are looking for alternative security frameworks based on cooperative principles in line with ASEAN’s aversion to notions of collective security.
To this end, Malaysian Defence Minister Hishammuddin Hussein met with his Indonesian and Philippine counterparts, Prabowo Subianto and Delfin Lorenzana, in March to extend their trilateral cooperation agreement (TCA) to bolster national security.
They agreed to expand the TCA by including other organisations and ministries, deploying a permanent trilateral marine officer, improving intelligence sharing to direct surveillance operations more productively at regional crime–terror nexus activities, and enhancing strategic engagement and commitment among the three states.
The TCA was established in 2017 after terrorist attacks in Marawi City and a wave of kidnappings, and it’s understood that cooperation will cover combating violent extremism, terrorism and transnational crime. Communication among the partners will be improved along with greater collaboration among their military forces. These significant steps towards addressing common threats could not have been imagined two decades ago.
The TCA is one of a number of minilateral security frameworks to emerge in the Indo-Pacific. Several Indian Ocean and Malacca Strait littorals have launched such mechanisms. The Colombo Security Conclave, initiated in 2011 and revived in 2020, comprises India, Sri Lanka and Maldives—which have upgraded their 2013 agreement to a maritime and security agreement—plus Mauritius. The Trilateral Dialogue on the Indian Ocean involved Australia, India and Indonesia. The India–France–Australia dialogue was established in 2021. The 2004 Malacca Straits Patrol was established by Indonesia, Malaysia and Singapore in 2004 and joined by Thailand in 2008. It was expanded to take in Eyes in the Sky, a program of combined maritime air patrols.
This marks a significant shift. Responsibility for maritime security, once the domain of superpowers, especially during the Cold War, is now being taken on by rising, middle and small powers.
The nations building these minilateral frameworks prefer to keep themselves away from major-power machinations. Their goal is to reach out to the farthest corners of their respective maritime subregions by carefully mapping threats and vulnerabilities. These developments are not surprising when great powers can no longer affect events without support. Events in Ukraine have signalled that countries need to be able to deal with ‘locale’ concerns without depending on the diminishing capacity of great powers.
Significantly, the contributing nations have broken the bonds of mutual suspicion and, more crucially, the lack of discourse on these matters.
These developments are in complete contrast with the Cold War years in Asia. As a leading regional power, India was wholly averse to any superpower intervention until recently. Other important South Asian nations such as Sri Lanka, Bangladesh, Nepal and Maldives took similar positions. Sri Lanka spearheaded the successful initiative to secure UN General Assembly support in declaring the Indian Ocean, with the air above it and the ocean floor, a zone of peace for all time.
For decades, the Indian Ocean remained distant from any cooperative military endeavours. Mutual suspicions were so high that in the 1990s when India tried to scale-up its military capabilities, Indonesia and Australia were alarmed. The situation has turned around to the point where Indonesia has agreed that India can modernise its Sabang port.
And while ASEAN was formed in the late 1960s amid security concerns, Cold War politics, Britain’s decision to withdraw from east of Suez and elsewhere in Asia, and the export of communist ideology by China, the association has focused primarily on strengthening economic integration and cooperating on addressing non-traditional security matters.
The last attempt to establish a security platform in the conventional sense in this region was in the 1960s with the Southeast Asia Treaty Organization, but it was relatively short-lived. Today, the only institutions addressing security issues have been the ASEAN Regional Forum, the Expanded ASEAN Maritime Forum and the ASEAN Defence Ministers Meeting Plus. But even these institutions still focus on non-traditional security and elements of human, cooperative and common security.
However, much has changed and it was little surprise that ASEAN members Indonesia, Malaysia and the Philippines decided to launch a cooperative arrangement covering maritime and joint air patrols in and around the Sulu and Sulawesi seas.
Some might argue that despite the recent measures to address the TCA’s shortcomings, cooperation remains focused in a narrow area and there’s good reason for the three countries to strengthen it further.
China is the elephant in the room. From reclamation and militarisation of islands in the South China Sea to the activities of its naval militia and coast guard, China’s assertiveness has been extensively chronicled. A report by the Asia Maritime Transparency Initiative mapped out the paths of Chinese survey ships across the South China Sea in 2020–21, revealing considerable activity in waters straddling the coasts and economic zones of the three countries. Malaysia and the Philippines have responded officially to incursions into their maritime and air spaces.
Strategic uncertainty and military anxiety over China are common features of maritime trilateral mechanisms across the Indo-Pacific. While relations between the three TCA countries and China have ebbed and flowed over the years, they are gradually converging to a shared state of complexity in which each has a relationship with China epitomised by cooperation with an important economic partner and concerns over China’s increasing assertive behaviour. Even Indonesia has had brushes with China over the Natuna Islands.
Another issue is Indonesia’s decision to relocate its capital from Jakarta to Nusantara in East Kalimantan on the island of Borneo, which will require relocation of civil servants and military personnel. According to one source, 30,000–50,000 personnel will be deployed in the new capital’s regional commands. There will undoubtedly be spillover effects, such as the establishment of new businesses to meet a growing demand for goods and services. This will have an impact not just on Indonesia’s part of Borneo, but also on the Malaysian states of Sabah and Sarawak.
Could the impact also be felt in the southern Philippines, which has long struggled with security and insurgency challenges? Given Indonesia’s need to provide security for its new capital, the TCA could curb illegal immigration and criminal activities such as piracy and smuggling through joint operations.
Huge economic opportunities will be available for enterprising businesses in all three countries. It might be a watershed moment for this area that has always had great potential. We may see a new impetus, for instance, in the Brunei–Indonesia–Malaysia–Philippines East ASEAN Growth Area, which was established in 1994 only to be hampered by its small market, lack of physical connectivity and security concerns.
Malaysia stands to gain the most. Even though incidents such as kidnappings have reduced significantly since 2020, security concerns remain, including the threat of maritime kidnapping. Malaysia must also continue to deal with threats from the Abu Sayyaf jihadist group, illegal migration and smuggling. These are expected to increase once Covid-19 restrictions, particularly on border crossings, are relaxed. The TCA will do a lot to address some, if not all, of these issues and take some of the burden off Malaysia.
The TCA could significantly help safeguard global supply chains through the South China Sea and the Malacca Strait. Another key shipping lane runs through the Makassar Strait, providing nations including Australia and New Zealand a more direct route to East Asian markets. There may one day be an opportunity to expand this arrangement through cooperation with Australia and China.
A complication is that Indonesia and the Philippines have outstanding territorial issues with Malaysia, and Malaysia has similar issues with Indonesia, but they are being managed well.
Arrangements like the TCA strive for greater collaboration on the maritime front, despite unsolved issues and mistrust. A wish to preserve regional stability used to result in inaction. Now, in a more fragmented world, the same goal drives ASEAN member nations towards greater collaboration to preserve common interests.
In this episode, ASPI’s David Engel and Radityo Dharmaputra, PhD researcher at the Johan Skytte Institute of Political Studies at the University of Tartu, consider the public response in Indonesia to the Ukraine conflict and how anti-Western sentiment and Russian propaganda have shaped people’s views.
Next, The Strategist’s Anastasia Kapetas speaks to Carl Miller, research director of the Centre for the Analysis of Social Media at Demos, about the effectiveness of Russia’s information operations outside of Western countries and who is winning the information war.
Finally, ASPI’s Bart Hogeveen speaks to Trisha Ray, associate fellow with the Observer Research Foundation’s Centre for Security, Strategy and Technology, about Australia and India’s engagement with Southeast Asia and opportunities to support inclusive digital development in the region.
No one who has observed Indonesian foreign and strategic policy probably needs reminding of how differently Jakarta sees and engages with the world to the way Australia does. But in responding to Russian President Vladimir Putin’s brutal and indefensible assault on Ukraine, Indonesia’s foreign ministry has reminded us anyway.
The official statement from Indonesia’s foreign ministry (Kemlu) is a masterpiece of its genre.
The first two of its five points correctly affirm some fundamental concepts with which Australia and other like-minded nations can readily agree. They refer to the principles of the United Nations charter, ‘including respect for territorial integrity and sovereignty’, which Indonesia insists ‘must continuously be upheld’.
The statement describes the military attack on Ukraine as ‘unacceptable’, and, given that nearly 200,000 invading troops replete with tanks, war planes and other instruments of death and destruction are staging it, makes the unarguable point that people’s lives will be put ‘in grave danger’.
With the same crystalline insight and logic, it asserts that the attack ‘threatens regional as well as global peace and stability’.
So far, so good. But matters take a turn with points three and four of the statement.
‘Indonesia calls’, it proclaims, for ‘this situation’ to end and ‘further calls on all parties to cease hostilities and put forward peaceful resolution through diplomacy’.
It ‘urges’ the UN Security Council to ‘take concrete steps to prevent the situation from further deteriorating’.
It’s in the nature of the beast for diplomatic statements normally to be constrained, and therefore often inaccurate and inadequate as an expression of national sentiment. The phrasing of this one should not lead us to believe that President Joko Widodo, Foreign Minister Retno Marsudi and millions of Indonesians aren’t as appalled about what’s happened to Ukraine as any decent Australian. Jokowi’s tweet, ‘Stop war. War brings suffering to mankind and endangers the world’, doubtless reflects his horror. And Marsudi at least tried to persuade her Russian counterpart to resolve Russia’s dispute with Ukraine through diplomacy.
But statements have their purpose. They express policy, however vague and ‘nuanced’ that policy might be, and however wilfully opaque its expression. They matter in that sense.
And any statement on the Ukraine crisis that, like Indonesia’s, fails even to mention the word ‘Russia’ in it and to identify it as the aggressor is more than inadequate. As a statement of policy, it is fatuous and darkly risible.
More to the point, it is disingenuous. The Jokowi administration surely knows that both sides aren’t to blame for a war that Russia started and that Ukraine strove to avoid. To insist that Ukraine cease hostilities when it is only defending itself from the naked aggression of a revanchist tyrant is more than naive. It smacks of deliberate myopia.
This is doubly the case coming from a country that places so much store in its own sovereignty and bridles at any threat to it, real or perceived.
It also wouldn’t have escaped Marsudi’s attention that, notwithstanding the appeals of most of its members for Russia not to attack, the UN Security Council is hardly able to heed Indonesia’s appeal to take concrete—if undefined—steps to stop Putin from making matters even worse when Russia is a permanent member of the council and happens to be its current president.
In this context, it’s worth remembering how Indonesia responded to news that Australia intended acquiring nuclear-powered submarines sometime in the distant future.
It had no qualms then about identifying the villain of that piece in its eyes.
The statement it rushed out identified Australia by name four times and implied that Canberra was irresponsibly accelerating an arms race and being cavalier about its obligations under various international instruments, even though Australia has not violated any of them and has no intention of doing so when and if its boats sail.
It had certainly not invaded its neighbour on the premise that it had no sovereignty by virtue of being only an error of history and thus having no right to exist.
So, why is Indonesia again exemplifying the adage that there is none so blind as he who will not see—or that there is none so mute as he who will not state the obvious?
The answer as ever lies in a blend of policy orthodoxy and self-interest, as Kemlu spokesperson Teuku Faizasyah revealed in a press conference on the matter.
After being careful to condemn abstractly ‘every act which is a clear violation of territorial integrity and sovereignty of a country’, Faizasyah clarified that Indonesia had no intention of imposing sanctions (impliedly on Russia) because, ‘We will not blindly follow the steps taken by another country.’
At first blush, this comment reflects Indonesia’s oft-reiterated obedience to its ‘free and active’ foreign policy, albeit with a gratuitous, defensive tone in this case.
But Faizasyah’s subsequent remarks—‘We will make a decision based on our domestic interests and … whether sanctions would solve anything’—betray the more transactional character of the Jokowi administration’s foreign policy. And as he went on to explain, ‘We see time and time again that sanctions do not mean the resolution of a particular issue.’
The interests Faizasyah referred to weren’t specified but were presumably economic in the main, irrespective of how realistic Indonesia’s hopes for Russia in that domain might be. Last June, Indonesia’s trade minister, Muhammad Lutfi, followed Jokowi’s instructions to boost trade with the country’s non-traditional partners by visiting Russia for bilateral talks as well as a meeting with the Eurasian Economic Union. And while Moscow remains far from being among Jakarta’s largest trading partners, bilateral trade has grown significantly in recent years, with palm oil making up 40% of Indonesia’s exports to Russia.
Indonesia has also been keen to attract Russian investment, and the two countries have been exploring cooperation on Covid-19 vaccine production. And as any visitor to Bali in recent years can confirm, flows of Russian tourists to the centrepiece of Indonesia’s tourism sector, which the Jokowi administration is desperate to revive after Covid, have been among the heaviest from anywhere (nearly 160,000 arrived in 2019).
Indonesia–Russia defence ties have also long been significant, notwithstanding Jakarta’s decision to drop Russian Sukhois from its options for new fighter jets. Defence Minister Prabowo Subianto’s hosting of the first-ever ASEAN–Russia joint maritime exercise last December in Indonesian waters underscored the Jokowi administration’s interest in consolidating a relationship with a power that has served as an important source of weaponry for Jakarta and many of its ASEAN colleagues.
If nothing else, after Putin’s assault on Ukraine, hopefully Jokowi will at least be more circumspect in his public remarks about Russia and its place in the Indo-Pacific region. Last year, he pretended that Russia might play a positive role through its ASEAN ties in strengthening ‘strategic trust’ in Southeast Asia, ‘maintaining stability, peace and prosperity’ and mitigating the risk of strategic competition in the Indo-Pacific region.
And, ideally, at least a few other eyes across ASEAN are no longer so ready to blind themselves to reality, as was evidently the case at last September’s Russia–ASEAN summit. The joint communiqué proclaiming both parties’ commitment to the principles of ‘a rules-based framework’, ‘respect for sovereignty’ and ‘respect for international law’ now looks even less in synch with the truth than many others.
But Australia should have no delusions about where Indonesia, along with other ASEAN nations and our Quad partner India, will stand when it comes to taking whatever ‘concrete steps’ are feasible in responding to Russia’s brutal repudiation of the very principles to which Jakarta claims such adherence.
And of the lessons Canberra should draw from this, two should be the most obvious.
The first is that if Indonesia is not even prepared openly to condemn Putin’s Russia for attacking Ukraine, it will certainly do nothing, even rhetorically, that might jeopardise its ‘domestic interests’ should China attack Taiwan. Those interests far exceed any Indonesia has in Russia.
The second is that while we can and should keep working to make the most of our comprehensive strategic partnership with Indonesia, Australia should remain clear-eyed about just how truly ‘strategic’ a partner Indonesia is set to be for the foreseeable future, and deal with it accordingly.
Otherwise, we’ll be as detached from reality as any statement about Russia’s being a ‘buffer of stability and peace’ or that calls for Ukraine to give peace a chance.
A significant rise in Indonesian illegal fishing in Australia’s northern waters highlights a significant maritime security threat, and our border enforcement agencies can’t afford to drop the ball.
Over the past six months, Australian authorities have confiscated more than 600 kilograms of trepang (sea cucumber) from Indonesian fishing vessels in our waters. Overfished and valuable, Australian trepang sells for $15–30 a kilogram in Indonesia.
The trepang trade between various Australia’s First Nations peoples and Indonesia’s orang Makassar from Sulawesi has been well established since before Australia’s colonisation. That activity is now recognised in native title jurisprudence.
But these modern-day illegal fishers use contemporary fishing equipment and pose a threat to coral reefs, marine conservation and maritime border security.
Responding to the incursions, Australian authorities burned the three least seaworthy of the offending boats last month. That’s consistent with Australia’s (and Indonesia’s) punitive procedures for illegal fishing. Over the past 20 years, Australia has destroyed around 1,500 boats engaged in illegal fishing in our waters and prosecuted more than 2,000 foreign nationals involved (mainly Indonesian).
Australia’s approach to illegal fishing in its waters has been highly effective. From the height of the problem in 2006 when 367 foreign fishing vessels were apprehended, incursions in recent years have been in the single digits. But the rate of illegal fishing activity has soared in the past six months: 209 legislative forfeitures (which can include fishing gear, catch, salt for trepang processing, and sometimes the vessel itself) have been undertaken since 1 July. Some of these forfeitures include recidivist fishing vessels that have been interdicted multiple times.
Push factors in Indonesia have increased the fishers’ need for quick cash. The fishers hail from East Nusa Tenggara, a collection of more than 1,000 islands in eastern Indonesia. The remote region is often the first to suffer and the last to recover from a crisis. That’s been demonstrated recently by major delays in the Covid-19 vaccine rollout there.
Local poverty has been exacerbated by the pandemic’s economic impacts, which may drive a further 1.3 million Indonesians into poverty. Many worked in Bali’s tourism sector, but, like thousands of Balinese, they’ve moved to their home villages after widespread pandemic-related layoffs. The fishing industry has also contracted by 11%. That’s pushed the incentives for illegal fishing. In April, Cyclone Seroja levelled 20,000 homes and buildings in Nusa Tenggara, killing hundreds. These conditions pushed local fishers to venture further to regain their losses.
The Australian Fisheries Management Authority’s five-pronged international compliance and engagement program seeks to address illegal fishing through surveillance and enforcement operations, interagency and high-level communication, information sharing and stakeholder engagement. It emphasises public information campaigns in relevant overseas ports.
The program’s strength has been its cohesive and multifaceted approach: punitive action is balanced with education campaigns for domestic and international communities on legal best-practice fishing. Key partner agencies include Parks Australia; Maritime Border Command; the Department of Agriculture, Water and the Environment; the Department of Foreign Affairs and Trade; and the Royal Australian Navy.
The overall strategy has incorporated government partnerships and multilateral forums, notably the Australia- and Indonesia-initiated regional plan of action to promote responsible fishing and combat illegal fishing in Southeast Asia. It’s been a coordinated top-down approach and helped put the issue on the agenda in a recent meeting between Prime Minister Scott Morrison and Indonesian President Joko Widodo.
But the pandemic has significantly hindered the coordinated and integrated approach that’s kept illegal Indonesian fishing in our waters at low levels over the past 15 years.
Vessel seizures have continued throughout the pandemic (12 in 2020–21 and 28 so far in 2021–22). Due to Australian Covid-related quarantine rules, however, fisheries enforcement authorities have only been able to conduct legislative forfeitures, destroy boats and chase boats out of Australian waters; they haven’t been able to apply normal enforcement procedures through the detention and prosecution of foreign crews onshore.
Australian authorities haven’t been able to communicate as easily with their overseas counterparts to coordinate responses and drills. In-country information campaigns have slowed down, although Australia is still working with Indonesian authorities to provide Indonesian-language information chartlets to fishers in key Indonesian ports and during routine at-sea boardings by Australian authorities.
Australia and its archipelagic neighbour are well placed to cooperate in responding to the problem of illegal fishing due to their shared security and economic interests. These interests are perhaps even more critical for Jakarta than for Canberra. The fishing industry contributes 2.65% of Indonesia’s GDP, and the nation’s maritime border security has been tested by Chinese naval vessels in the contested Natuna Sea.
Both nations have strong regional policies on the issue (articulated through the regional plan of action) and cooperate bilaterally through drills like Operation Jawline Arafura. Australia’s Maritime Border Command works with Indonesia’s Ministry of Maritime Affairs and Fisheries to patrol and target illegal fishing along our shared maritime border. Tough crackdowns on illegal fishing are popular in Indonesia. To combat ongoing illegal fishing incursions by Vietnam and Malaysia, former Indonesian fisheries minister Susi Pudjiastuti led prolific and well-publicised boat destruction campaigns.
It’s in Indonesia’s interests to be a regional leader in combatting illegal, unreported and unregulated fishing, including by cooperating with Australia. Recent confusion in Indonesia about Australian authorities’ boat burnings led Jakarta to delay the usual Jawline Arafura exercise until an explanation was provided. Ironically, Jawline Arafura is exactly the kind of bilateral patrol that’s crucial to responding effectively to the illegal fishing problem. Fortunately, the problem was resolved and the exercise went ahead. But misunderstandings like these could stymie future cooperative opportunities with Indonesia on shared ocean interests.
Australia should continue to advance its diplomatic efforts with Indonesian authorities on common maritime enforcement issues. At the same time, Canberra should stress to Jakarta the need to take flag-state responsibility; Indonesia has to be able to control its own fishing fleet.
There’s more at stake here than environmental damage and millions of dollars in economic losses. In coming decades, rising ocean temperatures are set to continue to displace fish populations across maritime Southeast Asia. That will push valuable fisheries further south to cooler waters, and fishers will follow. Australia will need to add more ballast to relations with the Southeast Asian countries from which further incursions targeting our marine living resources will likely come.
On 22 February, the Indonesian Survey Institute published the results of a poll that rated Minister of Defence Prabowo Subianto as the top performer among President Joko Widodo’s ministers, with 75% of respondents expressing satisfaction with his performance. The result should be taken with a grain of salt as it might only reflect a reaction to name recognition rather than actual performance. Nevertheless, Prabowo seems to realise the problems that plague the Indonesian military, notably the problem of decaying hardware, and has decided to act.
There was no more powerful demonstration of this for both domestic and international audiences than the disappearance and sinking of the submarine KRI Nanggala 402 during a live torpedo exercise in the Bali Sea in April. All 53 crew were lost.
A month after the loss of the submarine, it was leaked to journalists that Prabowo had drafted a presidential regulation that revealed the Ministry of Defence planned to seek US$125 billion in loans to modernise Indonesia’s ageing military hardware. The size of the proposed outlay in the middle of the Covid-19 pandemic raised eyebrows and stirred controversy, at a time when some local leaders claimed they lacked the money necessary to help people during public health lockdowns.
Prabowo defended the budget bid by claiming he was simply doing his job; that he had received an instruction from the president to draft a 25-year ‘grand design’ for defence, although he admitted that the president had yet to approve the number. The leaking of the draft probably owed to the behind-the-scenes bureaucratic battle over spending allocations in the increasingly straitened economic times caused by the pandemic.
Prabowo blamed individuals seeking advantage in the budget tug-of-war, echoing an earlier accusation that bureaucratic infighting and resistance hampered his job.
The bureaucratic battles over the necessary investment are just one of many hurdles to be overcome if the Indonesian military is to modernise; another is setting a clear goal and purpose for the modernisation project.
As strategic analyst Evan Laksmana has noted, Indonesia is yet to develop long-term plans for its military, based on sound strategic assessments, scenario-based planning, and improvements in the quality of both defence organisation and personnel. The development of a strategic plan, and related reforms to institutions and personnel management, would likely face stiff resistance from within and outside the military.
But without proper planning, and a long-term strategy, Indonesia’s arms procurement is haphazard, often determined by the attractiveness of purchase terms rather than by objective analysis of strategic needs.
For example, the Indonesian Air Force’s primary combat aircraft come in six different variants and from three different manufacturers. This significantly complicates maintenance, logistics, inventory and ground-crew training requirements. The challenge of managing the interoperability of diverse platforms further reduces the effectiveness of airpower.
While Indonesia finally agreed in February to buy 36 French-made Dassault Rafale and 36 US-made Boeing F-15EX multirole fighters, in the months preceding these deals it also showed interest in purchasing Eurofighters and US F-16Vs and F/A-18E/Fs. It remains committed to plans for the joint production of South Korea’s KF-X fighter. Jakarta was even planning to buy more Su-35 fighters from Russia to add to the 16 other Sukhoi aircraft in service until Washington used the Countering America’s Adversaries Through Sanctions Act to pressure it to cancel the deal.
The same pattern of ‘opportunistic’ deals is evident in naval acquisitions. Indonesia has engaged with several European countries and Japan and South Korea to upgrade its warships and submarines. Its approach has been characterised as pitting one supplier against another to obtain the best price.
In a competitive global arms market, Jakarta is smart to press for the best terms. But acquisitions need to contribute to an effective overall force structure underpinned by clear strategic objectives and priorities.
The necessity for a stronger strategic basis for the military modernisation program is underscored by the changes in Indonesia’s strategic circumstances. Amid growing rivalry between the US and China, and tensions in the South China Sea, there’s greater uncertainty in the strategic outlook for Southeast Asian countries than at any time in decades.
The challenges of defending a vast archipelago in a more complex threat environment adds weight to longstanding arguments for Indonesia to focus more resources on strengthening its air and naval capabilities. The historic internal security imperatives that biased spending in favour of the army, and produced what some have referred to as ‘sea-blindness’, are largely no longer valid.
Widodo’s 25-year grand design will require a sum of money that he might find it hard to commit following the pandemic. Indonesia’s plans for a force upgrade pre-date the Widodo government and include a littoral navy of 274 vessels, 12 new submarines and 10 squadrons of combat aircraft.
The Ministry of Defence’s draft funding proposal was delayed for several months while the government focused on the immediate health security challenge. The financial challenges will long outlast the health challenges.
Beyond money for new hardware, Indonesia faces big costs in maintaining and fitting out existing platforms. An overhaul of the 40-year-old Nanggala was reportedly delayed before it sank. Its last major overhaul had been done in Korea in 2012.
But if Indonesia’s Defence Ministry is to succeed with modernisation, Prabowo is probably the man for the task. His military background and independent political power base equip him well to control the way money is spent and extract sufficient funds from the government. Still, that’s not to say he’ll succeed. He faces some stiff bureaucratic resistance and a lot of competition for scarce dollars in a post-Covid economy.
Having contested the presidency against Widodo at the last two elections, Prabowo is considered likely to have another tilt in 2024 and might be the frontrunner. The strength of the polling on his performance as minister will help his prospects. So, too, would success in dragging Indonesia’s military—hardware and organisation—into the 21st century.
But reform will neither be easy nor win many friends. Most importantly, success will require long-term strategic planning, which in turn means overcoming many vested interests within the military itself.