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Feb 27, 2017 | 19:27 GMT

Australia: A Meeting in Sydney Signals Less Tension With Indonesia

(Stratfor)

Indonesia and Australia have a troubled past, but the two may be trying to put their long-standing feud to rest. During a visit to Sydney on Feb. 26, Indonesian President Joko "Jokowi" Widodo and Australian Prime Minister Malcolm Turnbull announced that their countries would fully restore military ties. Turnbull also added that Jokowi had agreed to lower tariffs on Australian sugar and allow higher imports of Australian cattle as part of the countries' ongoing negotiation on a bilateral free trade pact. In the past, the two leaders have pointed out that the relationship between Indonesia and Australia is needlessly underdeveloped in several areas, and Turnbull will likely try to build on the progress made in Sydney by making a last-minute trip to Jakarta next week.

The joint statement brought an end to a brief spat that began earlier this year in response to Australian army training materials that allegedly insulted Indonesia's "pancasila" political philosophy and criticized Jakarta's rule in its Papua territories. The incident was fairly minor, stemming from several miscommunications and fueled by the political ambitions of an Indonesian general, and both governments quickly downplayed the issue. Nevertheless, the dispute underscored Indonesia's enduring suspicions of Australian meddling in Jakarta's restive, far-flung regions. Given Canberra's history of providing support to independence movements in East Timor and Papua, these misgivings will likely persist, adding friction to the two countries' rocky relationship and constraining their ability to cooperate militarily.

The quarrel also reflects Indonesia's perpetually unsettled political landscape. Since taking office in 2014, Jokowi — the first Indonesian president to lack military experience — has made only halting progress in consolidating power and has often struggled to assert his authority over the country's armed forces. These obstacles have hardly been surprising; Indonesia's sprawling landscape, protectionist sentiments and newness to democracy tend to foster cautious, inward-looking governments that have difficulty acting decisively on matters of economy or foreign policy.

At best, then, Indonesia and Australia will be reluctant partners when it comes to regional defense issues. For instance, Jokowi raised the prospect of discussing joint patrols with Australia in the South China Sea during their meeting — a move that would mark a notable increase in Indonesia's willingness to proactively defend its territories. But absent a major provocation from China, Indonesia will probably limit its efforts to addressing domestic concerns regarding the islands, such as illegal fishing and piracy. Because it relies on Chinese investment and commodities, Jakarta will be hesitant to wade deeper into the international dispute over Beijing's expansive territorial claims in the South China Sea. Jokowi, meanwhile, has emphasized the need to avoid inflaming tensions with China in any joint operations Indonesia and Australia choose to pursue.

As Indonesia's attention remains fixed on issues closer to home, it will also have a tough time exploiting the economic opportunities a better relationship with Australia could provide. As it stands, the two countries can be better described as competing commodity exporters than natural trade partners. Indonesia is only Australia's 13th-largest trade partner, and it received just $5.5 billion in foreign direct investment from Canberra in 2015. Turnbull and Jokowi had hoped to encourage greater cooperation by finalizing the Indonesia-Australia Comprehensive Economic Partnership Agreement — a deal that would refocus the countries' trade relationship on complementary sectors and investments into high-tech industries — before the end of 2017. Progress on this front will mostly depend on Jokowi's success in implementing contentious regulatory reforms, easing Indonesians' fears about food security, and keeping the country's protectionist proclivities in check. So far, it is unclear whether he has the political capital to do so, or to shift Indonesia's attention away from the threats its wealthier neighbor might pose and toward the interests they have in common.

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