In this episode, Andrew Davies talks with Marcus Hellyer on the costs of Australia’s future submarine project and they discuss the debate around an Australian long-range strike capability.

Mali Walker talks to the Perth USAsia Centre’s Natalie Sambhi on the appointment of Prabowo Subianto, the runner-up in Indonesia’s presidential election, as the country’s defence minister.

And to round it out, Genevieve Feely chats with John Coyne about the impact of his recent report on the future security of Australia’s north.

In November 2018, the Australian activist group Juice Media produced one of its satirical ‘Honest Government Ads’ promoting tourism in West Papua. The video is highly critical of Indonesia’s repressive and exploitative policies in West Papua and the Australian government’s support for and complicity with Indonesian policies.

During the current crisis in Papua, the Juice Media video was repurposed anonymously to voice Indonesian concerns about Australia’s intentions in Papua. The video was posted on YouTube and retitled in Indonesian as ‘A provocative advertisement from Australia: Be careful Australia is ready to annex Papua; Guard the unity of Indonesia’. The rebadged video circulated widely in Indonesia until it was blocked on YouTube.

The video and how it was repurposed provide insights into the complexity and sensitivity of how the intractable conflict in Papua influences Australia’s relations with Indonesia. The video cites the Australian government’s support of Indonesia’s sovereignty and the training of military and police, as well as Rio Tinto’s former involvement in the Freeport gold and copper mine.

Although Australia has provided consistent support for Indonesian sovereignty, Australia’s acceptance of 43 Papuan asylum seekers in 2006 led to the withdrawal of the Indonesian ambassador from Canberra and showed how the conflict in Papua could destabilise the bilateral relationship. The asylum-seeker crisis was smoothed over with the Lombok Treaty, in which each party agreed not to support or participate in activities that constitute a threat to the stability, sovereignty or territorial integrity of the other party, including separatism. Both parties also agreed that they would not permit their territories to be used for such activities.

The Lombok Treaty notwithstanding, the continued activities of Papuan pro-independence groups in Australia remains an irritant in bilateral relations. Even the training of Indonesian military officers in Australia has created tensions related to Papua. In early 2017, General Gatot Nurmantyo, then Indonesia’s armed forces commander, announced the suspension of defence cooperation amid claims that an army training course held in Perth had included an assignment about whether Papua, as a Melanesian society, should be independent.

The conflict in Papua has persisted since Indonesia assumed the administration of the territory in 1963. Pro-independence demonstrations and incidents of racism aren’t new. However, the demonstrations of the past month represent a significant shift in the dynamics of the conflict. They provide further evidence supporting the argument of Indonesian Institute of Sciences researchers in 2017 that there’s a better organised, and more numerous, younger generation of pro-independence activists who are more closely coordinated with the leaders in exile.

The racism expressed towards Papuan student in Java—they were called monkeys, dogs and pigs—has served to unite Papuans, because it resonates with the experience of so many Papuans. The racism has been weaponised in support of a referendum and independence, as reflected in some of the slogans deployed in the demonstrations: ‘Liberate Monkeys from Indonesia’, ‘Racism will only end with a Referendum’.

The geographic spread and persistence of the demonstrations, the scale of the violence, and the loss of life and destruction of infrastructure are significant in themselves. But they also speak to the place of Papuans and Papua in Indonesia. The racist slurs that triggered the recent violence were directed at Papuan students in Surabaya and elsewhere by members of the security forces and nationalist groups. These same security forces and nationalist groups, while strongly supporting Papua’s status as an integral part of Indonesia, clearly do not consider the students fellow Indonesians. Hundreds of Papuan students have returned to Papua from their studies in other provinces fearing for their safety.

The violence and killings in Wamena on 23 September were also triggered by a reported racist slur of a student. In what Amnesty International described as ‘one of the bloodiest days in the past 20 years in Papua, claiming at least 24 lives within 24 hours’, the violence in Wamena involved conflict between Papuans and Indonesian settlers.

The police chief, Tito Karnavian, announced that more police would be deployed to Wamena to protect the Indonesian settler community. The Jakarta Post reported the exodus of thousands of Wamena residents, with Indonesian settlers leaving for Jayapura and Timika and Papuans going to surrounding regions in the highlands.

This inter-communal conflict in Wamena is also a reflection of political and economic tensions. One of the major factors fuelling Papuan nationalism and support for independence is the demographic transformation of Papua under Indonesian rule. Indonesian settlers made up nearly 34% of the population in 2010, while Papuans remained marginalised in the urban economy.

After the initial demonstrations in Papua, but before the recent inter-communal conflict in Wamena, Caryo Pamungkas, a Papua specialist with the Indonesian Institute of Sciences, expressed his concerns about the possibility of horizontal conflict between Papuans and Indonesian settlers.

The sensitivity of the Papua conflict in Australia’s relations with Indonesia reflects the long shadow of Australia’s role in the separation of Timor-Leste—a factor well understood by the political and military elites in Jakarta. In an earlier era, there was also Australia’s 12-year-long support of the Netherlands against Indonesia’s claim that Papua was part of Indonesia.

In the light of the experience with Timor-Leste, the oft-repeated statements of Australia’s recognition of Indonesian sovereignty in Papua, as written in the Lombok Treaty, are not taken at face value in Jakarta. The unspoken response is that this was what Australia said about Timor Leste, until it mattered.

After several weeks of the current crisis, Australia’s Foreign Minister Marise Payne had to be asked at a doorstop interview before she expressed her concerns about the reports of violence and urged restraint on both sides.

Of all Indonesia’s neighbours, Australia has the greatest interest in a peaceful resolution of the Papua conflict. The current crisis shows that the established Indonesian policy framework, with its heavy reliance on military force, has produced no evidence of reducing Papuan support for independence.

It is in Australia’s national interest to encourage Indonesia to develop a policy framework that offers some prospect of a peaceful resolution. This would entail acceptance by Papuans that they are part of Indonesia as well as acceptance by other Indonesians that Papuans are fellow Indonesians.

After a campaign that was called ‘one of the most divisive election campaigns in Indonesia’s history’, incumbent president Joko Widodo, or ‘Jokowi’, handily won his re-election bid against long-time rival Prabowo Subianto. On 21 May, the Indonesian election commission declared that Jokowi had won, securing 55.5% of the vote to Prabowo’s 44.5%.

Prabowo is set to file a legal challenge against the final results in the Indonesian Constitutional Court, though most observers expect that the court will not rule in his favour, paving the way for Jokowi to begin his second five-year term as president of the third largest democracy in the world in October.

Prabowo’s continuing rejection of the election result has been accompanied by repeated threats from his most militant supporters—many of whom are conservative Islamists—that they will stage ‘people power’ street protests.

Indeed, Jokowi has struggled against conservative Islamist activists since the ‘defending Islam’ rallies which succeeded in removing his former ally Basuki Tjahaja Purnama (popularly known as ‘Ahok’) from the Jakarta governorship in April 2017.

These activists—now known collectively as Alumni 212—aligned themselves with Prabowo during his bid for the presidency. During the long campaign, they often turned to social media to accuse Jokowi of being a closeted communist, ethnic Chinese or Christian, in order to dissuade devout Muslims from voting for him.

In response to the challenges from the Islamists, Jokowi is relying on statutes such as the law on religious blasphemy, the law on electronic information and transactions, and an emergency decree on civil society organisations as the legal basis to resist the Islamist activists who are challenging him.

Using these laws, authorities are cracking down on the Islamist activists. One of the initiators of pro-Prabowo protests, Eggi Sudjana, has been charged by the Indonesian police, while others, including Islamist preacher Bachtiar Nashir, have been summoned for questioning. Eggi is facing multiple charges of treason and it’s been revealed that Bachtiar fled Indonesia for Saudi Arabia.

These arrests were the latest in a series of disciplinary and punitive actions taken by the Jokowi administration against his critics—who mainly come from the ranks of Alumni 212 activists—but also against others who have aligned themselves with Prabowo, such as the #2019GantiPresiden  (‘#2019ChangePresident’) movement, which stood in opposition to Jokowi and his policies prior to the election.

In May 2017, police charged the leader of the Defending Islam movement, Habib Rizieq Shihab, with online sex solicitation. This forced him into self-imposed exile in Saudi Arabia. The next month, the Jokowi administration banned Hizb ut-Tahrir Indonesia, an Islamist group that advocated for Indonesia to become part of a global Islamic caliphate. Some of Jokowi’s other critics, like singer Ahmad Dhani and academic Rocky Gerung, were arrested and convicted under the same religious blasphemy law that was used to convict Ahok.

These cases have led observers to begin accusing Jokowi of turning to authoritarian methods to deal with the challenges against his rule from hardline Islamists and others. Political scientist Marcus Mietzner has called such methods ‘fighting illiberalism with illberalism’ and questioned whether Indonesia’s democracy, which is widely considered one of the most durable in Southeast Asia, is now entering a stage of ‘deconsolidation’.

Islamists—particularly those who aligned themselves with Alumni 212—have emerged as the strongest opposition force against Jokowi. While he rightly sees them as a threat against his rule, so far Jokowi has dealt with them using coercive measures. This raises concerns that he might end up endangering the Indonesian democracy over the long run.

Instead of using coercion, Jokowi might consider alternative measures, such as providing education and economic opportunities for low-income Muslims (particularly young millennials). Land redistribution, as proposed by Jokowi’s running mate and now vice president–elect Ma’ruf Amin, might be another strategy that can be pursued by the administration during Jokowi’s second term to provide more opportunities for low-income Muslims. Ma’ruf has also proposed that the state promote entrepreneurship utilising Islamic economic principles ranging from Islamic banking to cooperatives and tourism as another means to reduce poverty.

If Jokowi is successful in promoting economic opportunities among low-income Muslims, he will also be able to neutralise many of the grievances of his Islamist critics. In doing so, he’ll also be able to avoid repressive measures that are only going to inspire further complaints and protests from groups like Alumni 212.

When Joko Widodo came to power in 2014, he promised as Indonesia’s seventh president to usher in a different style of politics to anything the country had seen before. He exuded humility. The son of a woodworker from Central Java, who had suffered the ignominy as a boy of seeing his family serially evicted from their home, Widodo entered municipal politics to make a difference in the lives of ordinary people.

He captured the public’s imagination with his modesty; he joined buffet lunch queues, even as president, and flew economy class. His favourite restaurants in his hometown Solo were simple places where the chefs cooked sate kambing (goat satay) out front in large woks and everyone joined each other at long trestle tables.

Widodo, 57, even looked the part—his slender frame (he claimed to weigh just 53 kilograms) and his inexpensive attire contributed to a man-of-the-people image. It was not out of character when Jokowi, as he is universally known, rode into the opening ceremony of the Asian Games last August on a scooter, the people’s conveyance. The video went viral.

Five years in the presidential palace has eroded the authenticity, but it hasn’t worn off.

‘Especially in the villages, they see him as one of them, as a village guy. He’s wong cilik [ordinary person]’, says a Jakarta businessman, who has taken time off to campaign for Widodo’s Indonesian Democratic Party of Struggle (PDIP) in Central Java.

The plebeian background is central to the story of Widodo’s rise—from furniture maker, to mayor of the Central Java city of Solo, then governor of Jakarta and finally president in 2014. It underscores his popularity with working-class Indonesians, especially in his populous home province. It also defines the style of his presidency and the limits of his ambitions in office.

Widodo has pursued a utilitarian agenda: stability, security, prosperity. He has focused on improving the physical welfare and livelihoods of his supporters rather than advancing the cause of liberal democracy.

He goes into Wednesday’s simultaneous elections for the presidency and parliament as the clear favourite, bolstered by a bigger coalition of political parties than he had five years ago. While the polls have been narrowing, and the campaign team of his opponent, Prabowo Subianto, a retired general and the son-in-law of the late dictator Suharto, contends that they grossly exaggerate Widodo’s position, the average of several shows that Widodo remains comfortably ahead.

Yet the prospect of a Widodo victory is imbued with less hope and excitement than in 2014 when the final days of the campaign were energised by an army of ‘Jokowi volunteers’. He has since disappointed many of his most ardent admirers and been criticised by civil society activists, academics and journalists for winding back the clock on democracy. The opinions of the Jakarta café set might not overly worry Widodo, although they should. Beyond the elections, whoever emerges as president will find that the political and economic health of the country are deeply entwined.

Indonesia’s ability to create new industries and new markets—in other words, new sources of growth—will require strong democracy and the continued opening of the economy, politics and society.

President Widodo or President Prabowo will face two deep challenges: first, to reunite the country around the republic’s founding principle of pluralism at a time when identity politics, particularly those centred on religion, have been the source of profound fractures and, second, to embark on more radical structural reform of the economy to find the investment and trade necessary to meet their ambitious growth targets. Widodo’s economic masterplan promises to turn Indonesia into an upper-middle income country by 2025; Prabowo promises growth in the double digits.

On the political front, one of the strongest critiques of Widodo’s first term is that he failed to protect basic civil liberties and democratic rights. Democracy in Indonesia has been described as stagnating, the result of a range of encroachments on free speech and organisation.

Widodo toughened a law allowing the government to ban mass organisations, ostensibly in order to proscribe the Islamist organisation Hizb ut-Tahrir. But human rights groups say it will restrict freedom of association and expression.

Police also were accused of disrupting the peaceful activity of some opposition political groups. And the door was opened for a return of active-duty military officers to civilian government positions.

The use of the mass organisations law against an Islamist group in July 2017 came after Widodo’s ally, Basuki Tjahaja Purnama, or ‘Ahok’, an ethnic Chinese Christian and former Jakarta governor, was convicted on charges of blasphemy against Islam. The two developments are the flip sides of a more assertive political Islam and the administration’s efforts to combat it. Each has contributed to a weakening of the quality of democracy.

This is far from being a harbinger of the decline of constitutional democracy in Indonesia. The country is a long way from the type of intervention or dire political and economic circumstances that produced the end of the first democratic experiment in the 1950s. Indonesia remains a vibrant multi-party democracy with a high degree of elite and popular endorsement.

Nonetheless, whoever occupies the presidential palace faces a big task in building social cohesion. He would be wise to remember that the republic’s founders were convinced the only way to achieve that was by affirming pluralism and social tolerance.

The message from the election campaign is that there can be little hope that will happen. Widodo, feeling vulnerable over the religious issue after Ahok’s jailing, sought a running mate with strong Islamic credentials. He ended up with an elderly cleric, Ma’ruf Amin, who has espoused a range of conservative interpretations of Islam.

Prabowo and his running mate, a wealthy young businessman, Sandiaga Uno, have openly courted the orthodox Islamic vote. In the closing days of the campaign, he drew some big crowds to stadiums, where, hoarse from shouting, he strutted the stage, pounded the lectern, and summoned up a dire picture of Indonesia being plundered by foreign forces. This went over well with his core audience.

With neither incumbent nor challenger overly troubled by the finer points of democratic principle, there can be little hope of seeing growth in the quality of democracy in the next five years. Indices of democratic performance have seen Indonesia slip to either ‘partly free’ or ‘flawed’. There’s a risk they will slip further.

The second broad challenge is to push structural reform to open the economy to new competition and market opportunities. International Monetary Fund economists have identified three potential drivers of growth in Indonesia—the ‘demographic dividend’ of a young population, the development of a digital economy on the back of a huge population of young social media users, and sustained consumption in China.

To take advantage of the opportunity, Indonesia has to reduce disincentives caused by excessive and contradictory regulation, particularly at the municipal level; relax restrictions on markets to encourage trade and investment; wind back a bloated public sector; continue to build infrastructure; and invest heavily in the quality of education and skills.

Indonesia has moved up the rankings in the World Bank’s ease of doing business index from 106 in 2016 to 73 in 2019. But the task of further reform is immense. For example, state-owned enterprises have been encouraged to grow under Widodo. Their assets now account for about 50% of GDP, while their return on capital has been falling.

Removing impediments to a better functioning economy will require the president to take on vested interests with powerful political connections. The prospects of creating an innovative digital- and tech-capable economy will be greatest in an open society. These are tough political as well as economic decisions. They require an effective democracy.

It’s an open question as to whether either candidate has what it takes to deliver. Indonesians saw how the previous president Susilo Bambang Yudhoyono frittered away a second term, occupied more by preserving his public popularity than by taking the tough decisions to secure the quality of democracy, social cohesion and economic progress. Widodo will leave an enduring legacy only by avoiding that trap.

As for Prabowo, it’s difficult to read too much into the theatre of campaign performances. His impassioned speeches can be alternately bemusing and deeply troubling. His message, verging on nativism, resonates with a sizeable proportion of Indonesians, but it unnerves potential investors and hints at a future lurch in favour of investment and trade protectionism.

Such populism works well in Indonesia for many of the same reasons it has worked abroad. Widodo’s worry is that come Wednesday it might work too well.

This essay is from ASPI’s election special, Agenda for change 2019: Strategic choices for the next government. The report contains 30 short essays by leading thinkers covering key strategic, defence and security challenges, and offers short- and long-term policy recommendations as well as outside-the-box ideas that break the traditional rules.

The challenge

No country is more important to Australia than Indonesia. In 2019, Paul Keating’s now famous dictum, first enunciated 25 years ago, has assumed even greater salience as China emerges as a truly global power and regional political developments threaten to undermine Southeast Asia’s hard-won economic advances.

The biggest challenge for the incoming government in Canberra is to address the yawning trust deficit with Jakarta. Too often in recent years, our diplomatic relations with Indonesia have been blown off course by avoidable political squalls—the latest being the controversy generated by the Morrison government’s desire to relocate Australia’s embassy in Israel from Tel Aviv to Jerusalem.

The aim must be to deepen and broaden Australia’s engagement with Indonesia and to build genuine trust and closer personal links, not just between our political leaders but within the broader community and within key counterpart government agencies and departments. With national elections to be held in both countries in the coming weeks or months, this year provides a suitable platform for a new resolution by Australia’s political leaders to pay greater attention to Indonesia and then deliver on that resolution in the next term of government. We need to work towards a stronger, deeper and more durable partnership with Jakarta.

For more than two decades, successive Australian governments have hyped the benefits of closer economic, political and cultural links with Indonesia. Our political leaders and our strategic policy planning documents continually pronounce on the importance of Indonesia’s economic rise for Australia. But mention of Jakarta lags far behind the considered treatment given to our major trading partners, led by China, the US and Japan. Geographical proximity doesn’t dictate closer economic relations.

The official rhetoric from Canberra has placed great store on Indonesia’s strong performance as Southeast Asia’s largest economy, citing its growing middle class and its rapidly increasing demand for goods and services. The Department of Foreign Affairs and Trade’s 2017 foreign policy white paper pointed to the likelihood that Indonesia, with its 260-million-strong population, will be the world’s fifth largest economy by 2030.

Yet Australia’s business and academic communities have signally failed to take up the challenge of greatly increased economic and educational engagement with our giant northern neighbour. Our trade and investment in Indonesia, never robust, has languished since the 1998 Asian financial crisis and in the wake of China’s remarkable economic ascension since the turn of the century. Australian companies still hold negative perceptions about the difficulty of doing business, given Indonesia’s uncertain regulatory framework and pervasive corruption. That needs to change before Indonesia becomes a major global economy.

Our two-way trade with Indonesia is currently flatlining at around $16.5 billion annually—accounting for just 2.2% of Australia’s overall global trade. Indonesia is only our 13th largest trading partner—lagging behind its much smaller ASEAN neighbours—Singapore, Thailand and Malaysia.

Since the mid-1990s, government-to-government ties have gradually developed into a dense web of activities including counterterrorism cooperation, financial sector governance reform and joint military exercises. Our embassy in Jakarta is now our largest overseas diplomatic mission; its more than 500 staff include 150 Australia-based diplomats. But deep functional working relationships (as we have built over decades with the US) need to be built between our respective defence organisations—and the defence industries that support them. A decades-long agenda needs to start now.

We have a fundamental stake in Indonesia’s continuing prosperity and political evolution as the world’s largest Muslim democracy and the natural leader of ASEAN. But, beyond the official rhetoric and closer bureaucratic partnerships that have been forged between government agencies since the 1990s, broader people-to-people engagement between Australia and Indonesia has barely advanced.

While Australia is still the largest destination for Indonesian students studying abroad, the number (currently around 40,000) hasn’t changed in years. Conversely, the number of Australian students undertaking Indonesian studies in our schools and universities, including language learning, is the lowest in decades.

We also continue to demonstrate a high level of ignorance about political developments affecting our northern neighbour. Many Australians still fear that Indonesia could pose a military threat to Australia. They also worry about the spread of militant Islam and refugee flows from the archipelago. A 2018 Lowy Institute poll found that only 24% of Australians agreed that Indonesia was a democracy.

On the Indonesian side, long-held popular stereotypes about Australia and Australians persist. According to leading Indonesian journalist Endy Bayuni, we’re still seen as ‘racist, arrogant, manipulative, exploitative and intrusive’. Many members of Indonesia’s political elite haven’t forgiven Australia for the role we played in bringing about East Timor’s independence in 1999. They also harbour deep suspicions about our intentions regarding the future of troubled Papua.

Quick wins

The incoming government in Canberra should move quickly to ratify the Indonesia–Australia Comprehensive Economic Partnership Agreement (CEPA) agreed in August 2018 [to be signed today, though ratification could be months off—Eds]. The signing of this landmark trade agreement was stalled in the wake of the Jerusalem embassy controversy.

The CEPA promises to be a shot in the arm for Australian trade and investment in Indonesia, offering better access to our commodity exporters, including the agriculture and manufacturing sectors. Further trade liberalisation under the CEPA framework will enable Australian service industries to invest in areas such as education, telecommunications, health and mining.

Vocational training providers will be able to partner with Indonesian counterparts to provide skills training in Indonesia. Under the CEPA, Indonesia’s foreign investment regime will provide greater legal certainty for Australian companies seeking to invest in Indonesia. Economic opportunities need to be pursued by a more sympathetic and more Indonesia-literate business community. Indonesians also need to become more aware of what Australia has to offer, particularly in the services sector.

The hard yards

Only by pursuing a much deeper and broader engagement with Jakarta can we hope to bridge the gulf between two vastly different cultures. As Keating once observed, the Australia–Indonesia relationship needs to grow not only in the statements of governments but ‘in the attitudes and actions of ordinary Australians and Indonesians’.

The incoming government should consider a number of additional measures to help underpin a more durable partnership with Indonesia:

• Embark on a national mission to build a much broader understanding and awareness of Indonesia across the wider Australian community. This should include a major new investment in Indonesian studies and language courses in our schools and universities using federal government funds flowing to state governments.
• Expand government-to-government dialogue with Jakarta to include regular meetings between economic ministers and officials.
• Continue to develop Australia’s diplomatic footprint in Indonesia, including by opening a consulate in Sumatra.
• Maintain and refine our $300 million aid program with Indonesia, with an emphasis on capacity building and strengthening direct links with Indonesia’s civil institutions involved in areas such as natural disaster relief.
• Widen defence and security cooperation, with a sharp focus on cyberwarfare, maritime surveillance and counterterrorism. We should eventually mount joint aerial surveillance and naval patrols across designated zones in the Indian Ocean and the South China Sea. Deepening institutional relationships between our defence organisations, so that Indonesians and Australians know and work with their counterparts, from logistics to personnel, as well as between service formations, is key to a defence partnership that works and which leaders value.
• Strengthen formal collaboration between the national and provincial parliaments of both countries with annual exchanges by delegations of MPs. Building these institutional links will help bolster Indonesian democracy, including religious tolerance and support for ethnic minorities.

In 2019, Indonesia remains an enigma. The world’s fourth largest nation is seemingly incapable of assuming its destiny as the leading power in Southeast Asia. In the Jokowi era, Indonesia has become even more insular, nationalistic and illiberal.

Australia must seek a greater strategic accord with Jakarta, not least because of our geography and history. We were there at the beginning, supporting Indonesia when it declared its independence in 1945. The archipelago will always guard our northern approaches.

The paradox of the bilateral relationship is that, notwithstanding recurrent political crises over 60 years, our most important regional diplomatic initiatives in recent decades, including the Cambodian peace settlement and the creation and evolution of APEC and the ASEAN Regional Forum, were accomplished only by working in close partnership with Jakarta.

Breaking the rules

The incoming government should consider three major initiatives to strengthen the bonds between Australia and Indonesia:

• Establish an Australia–Indonesia Climate Change Commission. This body would see scientific experts from research institutes in both countries collaborating in diverse areas such as agriculture, fisheries and forestry to mitigate the effects of climate change in both countries.
• Create an annual Track 2 dialogue convened and run by Indonesian and Australian business figures. The aim would be to strengthen bilateral business networks, with a particular focus on the services sector.
• Mobilise the Australian university network to establish campuses in Indonesia, with a focus on training Indonesian students in applied science and technology.