- 1 Between 2000 and 2017, Indonesia received US$4.42 billion in official development assistance from C (...)
- 2 Interview with Indonesian senior economist and former politician, 23 November 2021.
1Since the dawn of this century, Indonesia has become an increasingly consistent target of Chinese economic statecraft and elite capture. China’s consistent focus on Indonesia is reflected in AidData statistics, which reveal that between 2000 and 2017, Indonesia was the number one recipient of Chinese development finance in Southeast Asia, both in terms of foreign aid and other official flows (OOF), the latter being loans and export credits priced at or near market rates.1 Indonesia is indeed pivotal to China’s geopolitical goals: its geographic location and proximity to the South China Sea, coupled with its vast array of natural resources, many of which China needs to compensate for its own energy deficit,2 make Indonesia a particularly attractive international partner. Indonesia, however, has multiple reasons, both historical and contemporary, to be cautious, if not suspicious, of China.
2In this article I seek to analyse and explain just how China uses economic statecraft and elite capture to embed itself in Indonesia, thereby better positioning itself to influence Indonesian foreign policy. Furthermore, I posit that in lieu of the current Joko Widodo (Jokowi) administration devising a coherent China policy and strategy, the Indonesian military (Tentara Nasional Indonesia or TNI) has forged ahead, establishing stronger ties not with China, but with the militaries of key Western states. The TNI’s preference to cooperate with the West stems from its longstanding suspicions of communism and China, as well as sections of Indonesia’s ethnic Chinese population, many of whom joined Indonesia’s Communist Party (Partai Komunis Indonesia or PKI) prior to the anti-communist purges of 1965 and were therefore suspected of serving as a fifth column for China (Sukma 1999: 50, 65, 137-38).
- 3 Mr Simon Hewes provided invaluable research assistance for the duration of the research.
3Preliminary research for this article included an initial review of the existing academic literature on the Indonesia-China relationship and the Indonesian mainstream media’s limited coverage of the relationship from 2016 to the present. The most significant component of the research, however, saw me recruit and interview 30 leading experts on the Indonesia-China relationship. My respondents were either existing contacts or the result of snowballing. Owing to the constraints of the pandemic, I conducted all interviews, bar one, via Zoom. I conducted 11 of 30 interviews in Indonesian and, with the help of a research assistant,3 transcribed and coded all 30 interviews. What follows is a discussion of the salient issues and overriding themes that emerged from those interviews, supported by the existing literature and media coverage where appropriate. Interviews were conducted with respondents on the condition of anonymity. Such an approach carries with it obvious limitations, insofar as maintaining true anonymity detracts from the authoritative weight of the respective respondents’ remarks and insights. I have therefore endeavoured to strike a balance between not disclosing the names of my respondents, but referencing their professional job description in a generic fashion that still reflects the authority of their statements.
4In the first section of this article, I address the idea of Indonesia being the centrepiece of the Indo-Pacific region. I explain why—now more than ever—Indonesia matters, especially in terms of the bulwark it could present to China’s expansionist aspirations in East Asia and the Western Pacific region. In the second section, I endeavour to better explain and define the nature of the Indonesia-China bilateral relationship per se. In the third section, I address China’s economic statecraft efforts in Indonesia and the long-term effect China-funded grand-scale projects could have on Indonesia’s ability to maintain its own longstanding foreign policy of non-alignment or bebas dan aktif (free and active). In the fourth section, I address the existential threat that Chinese incursions in Indonesia’s North Natuna Sea (South China Sea) present to Indonesian sovereignty, as well as the corruption and alleged Indonesian complicity that underlines these incursions. Finally, in light of the establishment of the AUKUS (Australia, United Kingdom, and United States) security pact in September 2021, I discuss what the TNI’s increased military cooperation with other Western states might mean for the future of an officially non-aligned Indonesia.
- 4 Prime Minister of Australia Scott Morrison; Prime Minister of the United Kingdom Boris Johnson; Pre (...)
- 5 Andrew Greene, “AUKUS Nuclear submarine Plan to be Revealed by March 2023”, ABC (online), 28 June (...)
5Indonesia finds itself today the centrepiece to two increasingly rivalrous bilateral relationships: the Australia-China relationship and the United States-China relationship. The 2021 establishment of the AUKUS security pact, as well as the 2017 revival of the Quadrilateral Security Dialogue (the Quad), are formal responses from the respective member states of both to China’s rising star in the Indo-Pacific region. The Quad, by its very nature, provides Australia, India, Japan, and the United States a forum to communicate and collaborate dialogically on security matters pertaining to China’s containment. AUKUS, meanwhile, which was officially announced by then-Australian Prime Minister Scott Morrison, then-British Prime Minister Boris Johnson, and US President Joe Biden on 15 September 2021, is “an enhanced trilateral security partnership,” one of the primary aims of which is to equip the Royal Australian Navy with nuclear-powered submarines and access to the United States’ nuclear technology.4 The overarching aim of AUKUS is to assign Australia greater regional responsibility in terms of containing China in the East Asian-Western Pacific bloc and, if necessary, using those submarines to respond to any acts of Chinese aggression or war in the region, notwithstanding that they are not due for service until after 2040.5
- 6 Australia ultimately settled with Naval Group for a sum of €555 million. See France 24, 11 June 202 (...)
- 7 Interview with senior academic, 17 December 2021; Interview with Indonesian former ambassador and s (...)
- 8 Interview with Indonesian senior diplomat and East Asia specialist, 1 December 2021.
6While the announcement of AUKUS blindsided the French and led to the early termination of a multi-billion-dollar diesel submarine contract between Australia and French submarine maker Naval Group, one of the justifications for AUKUS was that Australia required superior, state-of-the-art nuclear submarines if it was to be able to properly contain China in the region.6 Indeed, one school of thought is that China’s star will rise such that Chinese primacy in East Asia and the Western Pacific will replace American primacy—that is, the current Pax Americana (American peace) status quo will be replaced by Pax Sinica (Chinese peace). Two of my interview respondents, namely one senior academic and one former senior Indonesian diplomat,7 endorsed this position. While Chinese primacy in East Asia and the Western Pacific might not be a fait accompli—another of my respondents, himself a senior Indonesian diplomat, pushed back against this prediction, as well as the notion that Indonesia’s only two options are to either side with a US-led bloc or China-led bloc8—the broader historical explanation for why this outcome is a distinct possibility warrants further explanation.
7Hugh White (2012) explains how and why China’s star has already risen to the extent it has—and why, therefore, the AUKUS states (among others) must continue to monitor China’s progress. Since Mao Zedong took power in 1943, China’s status has increased exponentially, particularly in Asia. Its sheer geographical size and population make China effectively impossible to conquer, while it has used its communist ideology and acquisition of nuclear technology (in 1964) to entice certain smaller countries in East Asia away from the United States. In 1972, the United States managed to curb China’s rise, albeit temporarily. Then-United States Secretary of State Henry Kissinger and President Richard Nixon struck a three-way deal with Japan, as well as Mao and Chinese Premier Zhou En Lai, whereby the United States agreed to recognise the Chinese Communist Party (CCP) as the legitimate government of China, but only if China and Japan acceded to US primacy in East Asia. China and Japan acceded, partially on the proviso that the US would assure both protection from the other, and from the Soviet Union. Such a deal also worked for the United States to the extent that the Soviet Union could not be sure that the United States would not side with China against it if compelled to do so. US recognition of China also granted the latter access to the market economies of the non-communist world, without which it would almost certainly not be the economic powerhouse it is today (ibid.: 19-23).
8By the 1990s, China’s economy was still growing, and as its economy grew, crucially, so too did its defence budget. The disintegration of the Soviet Union further assisted China’s military development in two key ways: first, it meant that China could shift its focus from its land forces to building up its maritime forces; and second, it meant that Russia and other parts of the former Soviet Union were now more prepared to sell their military technology, from which China benefited notably. As its economy and military stocks grew, the potential “creation of a Sinocentric Asian bloc dominating the western Pacific”, as Kissinger wrote (2012: 45), surprised few observers. Notwithstanding its inferior military, China’s ever-increasing nuclear and naval capabilities meant that its influence spread quickly, and as its influence spread, so too did the likelihood of some form of confrontation with the United States.
- 9 Graham Allison, “The Thucydides Trap: Are the U.S. and China Headed for War?”, The Atlantic (online (...)
- 10 For a more in-depth account of these 16 cases, see the Belfer Center’s Thucydides Trap Case File at (...)
9While official China policy has never acknowledged the country’s ambitions to dominate East Asia and the Western Pacific, as Kissinger has noted, “enough material exists in China’s quasi-official press and research institutes to lend some support to the theory that [US-China] relations are heading for confrontation rather than cooperation” (ibid.). As Harvard’s Graham Allison explained in The Atlantic in 2015, Thucydides’ Trap is perhaps the best lens through which to view the US-China relationship. The Thucydides’ Trap theory says that the likelihood of conflict between a rising power and a currently dominant one will emerge either due to hubris, fear, or honour.9 White shares Allison’s sentiment, writing that while a country’s domestic political system and its own national circumstances and objectives are relevant considerations, the albeit crude measure of a country’s power remains its “sheer economic scale” (White 2012: 41-42). White emphasises that “[n]o country has ever exercised great power without great wealth, and—with post-war Japan as perhaps the sole exception—no very wealthy country has ever failed to manifest its economic weight in strategic power” (ibid.). Allison similarly noted that in 12 of the past 16 instances of a ruling power being met by a rising power, the result has been bloodshed.10 The key, of course, is a state’s ability to convert its economic might into other forms of power, including political, diplomatic, and military power, which China appears to be doing.
10White, who also cites Thucydides’ Trap, writes that the US-China rivalry “seems to spring on both sides from a combination of fear and honour” or what today we might call “security” and “status” (White 2012: 56). As Elizabeth C. Economy writes, a key component of Xi’s “Third Revolution” and realisation of the Chinese Dream depends on “doubling incomes by 2020 and recapturing China’s historic centrality and greatness in the international system” (Economy 2018: 18). For Xi, a key component of recapturing that historic centrality and greatness means replacing Pax Americana in East Asia and the Western Pacific with Pax Sinica. Pax Sinica in this instance does not mean that China would seek to establish a Stalinist-like rule over East Asia and the Western Pacific; it simply means that China would establish a form of its own Monroe Doctrine, that is, its leadership in the region would remain unchallenged, its core interests would be protected, and it would spend very little (if anything) on military invasions and occupations (White 2012: 58-59). For Xi, replacing American primacy with Chinese primacy in the region would signify that China is, in fact, an equal of the United States. Conversely, by seeking to maintain the status quo in the region, the United States would be tacitly accepting China as a strategic rival (ibid.: 4).
- 11 Sudha Ramachandran, “Why Does China’s Foreign Minister Want India to Put the Border Dispute on the (...)
11Working in China’s favour is the fact that the US is a global power with countless geostrategic interests worldwide, whereas China is not (at least not to the same degree as the United States). For the foreseeable future, China will remain an East Asian power, meaning it can devote its resources to securing East Asian and Western Pacific regional order. In this regard, the concept of the Indo-Pacific is arguably of less utility than contemporary government rhetoric might suggest. Indeed, as White notes (2018: 24), the Indo-Pacific construct assumes that India and China could somehow end up at loggerheads, but an India-China conflict is hardly foreseeable, notwithstanding the protracted dispute over the Sino-Indian Himalayan border, which has been on foot since 1962 and continues to manifest itself in skirmishes to the present day.11 China’s primary focus remains East Asia and the Western Pacific, meaning that its competition with the US is on its own doorstep. This makes the respective costs of maintaining military operations in the region for China and the US markedly different. The US will need to maintain “sea control”, that is, as White writes, the ability “to deploy aircraft carrier and marine amphibious forces throughout the region’s oceans with little fear that they would be sunk by an enemy” (White 2012: 63, 66-67). China, meanwhile, need only maintain “sea denial”, which is the ability to attack US forces as and when they present a threat, thereby inhibiting US military action.
12But how does this rivalry affect Indonesia, and how could Indonesia benefit from its own geographic location and the fact that both China and the United States see it as a potential lynch pin in the region? Of course, a non-aligned Indonesia finds the US-China rivalry of particular concern, at least insofar as Indonesia’s longstanding foreign policy means that it would, as a matter of principle, seek to avoid tilting in the direction of either country. That said, if Indonesia manages the situation competently, it also stands to benefit greatly from this rivalry. As one interview respondent—a seasoned observer of, and commentator on, Indonesia for more than 30 years—explained:
- 12 Interview with Indonesia analyst and commentator, 27 October 2021.
Previously, [Indonesia] was a destination for investment or for securing resources, but it was a place where international entities would come to do business for motives of profit. It was an emerging market. Now, however, it’s a geopolitical arena. It’s really, literally, the centrepiece of the China-Australia rivalry. It’s the major mass in between the two. It’s also a repository of the vast resources that China sees itself needing in the future and it's a huge domestic market and, for Australia, it’s the buffer from everything else in the world. So, now it’s a geopolitical arena, in addition or even more so than being an emerging market for business—and by geopolitical arena it means that international entities are coming into Indonesia in order to stakeout claims or secure turf that they defend or acquire assets lest the other side acquire them first. So no longer is profitability really the guiding motive—it’s more just about gobbling up spheres of influence or ownership stakes or assets or concessions. Not because those are worthwhile and profitable in and of themselves but just because neglecting them would allow the other side to get them. So, it’s a whole different kind of ballgame and the Indonesian policy makers are still playing by the old rules, I think, and there’s a new set of opportunities and threats under this changing framework. It’s subtle but it’s important and it actually provides Indonesia with even more opportunities and bargaining power, actually, because they can play these sides off, one against the other, and create bidding wars and really profit, but that’s sort of a short-term view. The risk is you alienate both sides and then you have no allies.12
- 13 Ismira Lutfia Tisnadibrata, “Indonesia Gives New Name to Sea Region North of Natuna Islands”, Benar (...)
13In China, the Jokowi administration has found a seemingly generous economic partner that appears prepared to invest in grand-scale Indonesian infrastructure projects. The problem is that while the Jokowi administration might see China as one of its most significant meal tickets to meeting many of its development and connectivity goals, China’s expansionist desires over the South China Sea, as most notoriously evidenced by its controversial nine-dash line claims, show no sign of abating. Indonesia’s current tactic of simply not acknowledging China’s claims over parts of the South China Sea, which include Indonesia’s North Natuna Sea, are obfuscatory at best, as repeated Chinese incursions in Indonesia’s exclusive economic zone (EEZ) in the North Natuna Sea have demonstrated. The North Natuna Sea—a resource-rich region surrounding Indonesia’s Natuna Islands—was previously a part of the South China Sea, until it was renamed by Indonesia’s Deputy Minister for Maritime Affairs Arif Havas Oegroseno in July 2017, following a 2016 Permanent Court of Arbitration decision that declared China’s nine-dash line claim to have no basis in international law.13 In the following sections, I address these issues in greater depth, commencing by seeking to better explain and define the nature of the Indonesia-China bilateral relationship per se.
- 14 Interview with Indonesian former ambassador and senior research fellow, 18 January 2022.
14According to certain insiders, the Jokowi administration has no coherent China policy.14 There is also, deliberately, an opaqueness to the manner in which Indonesia deals with China, and vice versa. First and foremost, Indonesia’s approach to China is personality driven, which plays into the hands of China’s “elite capture” model, which it typically employs in all its foreign relations. The opaqueness of the relationship, however, is, at least in part, a reflection of the complexities and fragility of the bilateral relationship. Indeed, the Indonesia-China relationship is arguably undermined by three primary factors: Chinese incursions into Indonesia’s exclusive economic zone (EEZ) in its North Natuna Sea; longstanding anti-China sentiment among sections of Indonesia’s indigenous population; and the financial benefits derived by many of Indonesia’s political and business elite from the economic dimension of the bilateral relationship. The fact that the relationship is predominantly economic-based also plays into the hands of those members of Indonesia’s political and business elite who benefit directly.
- 15 “Indonesia’s Trade Performance with China in 2021 is Encouraging”, Embassy of the Republic of Indon (...)
- 16 For example, Indonesia is predicted to be the world’s seventh largest economy by 2030, and fourth (...)
- 17 “Investment Realization: FDI & DDI – Quarter II (APR-JUN) 2022”, Kementerian Investasi/BKPM, 20 Jul (...)
- 18 Since 2017, up until the first half of 2022, Singapore’s FDI into Indonesia has been US$8.4 billion (...)
- 19 Since 2017, up until the first of 2022, Hong Kong’s FDI into Indonesia has been US$2.1 billion (201 (...)
15While I discuss the intricacies of how Indonesia’s elite have allegedly benefited from the relationship in a subsequent section, in many ways, the Indonesia-China bilateral relationship has never been stronger. Two-way trade between the countries has never been higher—in 2021, it reached an unprecedented US$124.34 billion15—and China continues to fund large-scale Indonesian infrastructure projects, which bring Indonesia closer to realising its ambitious development goals.16 According to figures released by Indonesia’s Investment Coordinating Board (Badan Koordinasi Penanaman Modal or BKPM), China was the second greatest contributor of foreign direct investment (FDI) to Indonesia for the first half of 2022, contributing US$3.6 billion. China has consistently contributed large amounts of FDI to Indonesia over the past half decade, serving as Indonesia’s third greatest FDI contributor in 2017 (US$3.4 billion), 2018 (US$2.4 billion), and 2021 (US$3.2 billion), and its second greatest in 2019 (US$4.7 billion), 2020 (US$4.8 billion), and the first half of 2022 ($3.6 billion).17 Conspicuously, the two other countries consistently in the mix, along with China, have been Singapore, which remains Indonesia’s primary FDI contributor,18 and Hong Kong.19 Singapore and Hong Kong’s respective investments in Indonesia are conspicuous for one reason: as a senior Indonesian economist respondent explained, China is, in fact, Indonesia’s greatest contributor of FDI—it simply uses Singapore and Hong Kong as intermediary channels through which it funnels FDI into Indonesia. The reason for this is, as this respondent explained, because:
- 20 Interview with Indonesian senior economist and former politician, 23 November 2021.
China is very much aware that the China issue in Indonesia is very sensitive, given the number of anti-China incidents [that have occurred in Indonesia]. So, I think China tries to ensure that it isn’t seen to be dominating Indonesian FDI—that’s what the data and facts reflect. […] Because Chinese companies enter Indonesia via Singapore and Hong Kong, in order to make it seem more diversified.20
16Drilling down further, Evan A. Laksmana and Rocky Intan found that, between 2010 and 2020, 85 of 121 Indonesian state-owned enterprises (SOEs) had publicly disclosed business interactions with Chinese companies. In descending order, these interactions predominantly take the form of trade (import-export) ties, loans, and joint ventures (Laksmana & Intan forthcoming: 27). Trade is dominated by Indonesia’s export of commodities to China, and then Indonesia’s import of Chinese capital goods. In terms of loans, the Chinese Development Bank and the Export-Import Bank of China were found to be prominent lenders to Indonesian SOEs. Finally, Chinese companies and Indonesian SOEs typically engage in mining, energy, infrastructure, and transportation joint ventures, the most obvious example of which is the Jakarta-Bandung High-Speed Rail (HSR) (ibid.: 27-28). As I argue in the following section, China will continue to deploy large-scale projects throughout the Indonesian archipelago, such as the Jakarta-Bandung HSR, for one overarching reason: these projects serve as Trojan Horses that enable it to maintain a physical presence in Indonesia for the long term. In turn, this presence increases its ability to exert greater influence over Indonesia and, therefore, Indonesian foreign policy.
17The sheer number of medium- to long-term grand-scale infrastructure projects granted by the Yudhoyono (2004-2014) and Jokowi (2014-2024) administrations to China means that, barring unforeseen circumstances, Chinese companies and workers will maintain a physical presence in Indonesia for at least the next 40 to 50 years. Of course, Indonesia has a diverse portfolio of countries constructing and implementing other large-scale infrastructure projects—Japan, the United Arab Emirates, and the Netherlands are other examples of great economic investors in Indonesia—but none of these countries have demonstrated the enthusiasm to invest in Indonesia on the same scale as China. Moreover, none harbour expansionist aspirations in the East Asian and Western Pacific region like China does, and none of their heads of state are seeking to “rejuvenate” their respective nations after a “century of humiliation”, as is President Xi (Economy 2018: 3). Arguably, Indonesia should exercise far greater caution when negotiating such projects with China, but the allure of Chinese fast money has often proved too hard to resist for the Jokowi administration. The overriding concern is that while this administration will leave office in October 2024, Jokowi’s successor stands to inherit a country beholden to, and compromised by, a China whose expansionist aspirations in the South China Sea will have only grown. Indeed, it could very well be that Jokowi’s successor finds himself taking the reins of a country enmeshed in a Gordian knot: unable to resist further Chinese investment, but economically beholden to China and therefore limited in how it can protest and object to subsequent Chinese incursions in its EEZ in the North Natuna Sea.
18Of the most high-profile China-funded projects, those that have arguably dominated the headlines are the Indonesia Morowali Industrial Park (IMIP) in Central Sulawesi, the Kayan River Hydroelectric Power Plant in North Kalimantan, and the Jakarta-Bandung HSR. They provide illustrations of China’s preparedness to fund projects from which other countries might otherwise shy away, not because China necessarily believes them to be viable projects that promise good returns on investment, but rather because they enable China to maintain a long-term physical presence in Indonesia.
19I will now discuss these three projects in chronological order, based on their date of commencement.
20On 2 October 2013, Shanghai Decent Investment (Group) Co., Ltd and Bintang Delapan Group signed an agreement to establish the China-Indonesia Economic and Trade Cooperation Zone Indonesia Morowali Industrial Park (IMIP), a key commercial cooperation project for the two countries. The signing ceremony was witnessed by President Xi Jinping and President Susilo Bambang Yudhoyono (Caijing Magazine 2019). Construction of the IMIP, which covers more than 2,000 hectares of land, commenced in late 2013. It now currently comprises 3.0Mt pa (metric tonnes per annum) stainless steel capacity; 0.5Mt pa carbon steel capacity (currently expanding to 3.5Mt pa); 0.6Mt pa high carbon ferrochrome; 3.0Mt pa nickel pig iron capacity (36 operating RKEF lines in March 2021); and 2.0 GW power plant (currently expanding to 2.9 GW), as a lime plant, coke plant, and acid plant.21 In terms of ownership, 66.25 percent of the IMIP is owned by Shanghai Decent Investment, a company in the Tsingshan Group, the latter being the world’s largest producer of steel.22 PT Bintang Delapan, one of Indonesia’s largest nickel mining companies, owns the remaining 33.75 percent.23 The IMIP has resulted in thousands of Chinese foreign workers arriving on Indonesian shores, even at the height of the pandemic, while millions of Indonesians were in lockdown.24 Indonesian senior economist Faisal Basri has been particularly critical of this practice, arguing that many Chinese workers have been imported into Indonesia to conduct menial jobs that Indonesians themselves could easily carry out, although IMIP CEO Alexander Barus has retorted that for every six Chinese foreign workers employed at IMIP, there are 100 Indonesian workers.25 Basri has also claimed that Indonesia only derives 10 percent of the profit from the IMIP, with Chinese investors reaping the benefits of the remaining 90 percent of profit.26
- 27 Viriya P. Singgih, “PowerChina to Build Hydropower Plants for $17.8 Billion3, The Jakarta Post (onl (...)
- 28 GCR Staff, “China, Indonesia Set Up $18bn Hydro Plan to Power Borneo”, Global Construction Review ( (...)
- 29 Ibid.
21In 2008, China Power Investment Corporation (CPIC), a Chinese state-owned enterprise, commenced a feasibility study into the construction of a hydropower plant on the Kayan River in North Kalimantan.27 Five years later, and pursuant to an agreement signed in Beijing on 13 April 2018, CPIC invested $17.8 billion into the Kayan River hydroelectric project. Crucially, the project will take approximately 20 years to complete.28 Once complete, however, it will comprise five dams and have the capacity to generate a total of 9,000 MW of electricity.29
- 30 “Trial run of Jakarta-Bandung High-Speed Railway Successfully Completed”, Antara (online), 21 Novem (...)
22The construction of the Jakarta-Bandung HSR has been anything but seamless. Initially forecasted to be completed by May 2019 (Tan 2021), the HSR will finally be operable in June 2023, after completing its first trial run on 16 November 2022, as witnessed by both President Jokowi and President Xi on the sidelines of the G20 summit, which Indonesia hosted in Bali.30
23The joint consortium overseeing the construction is PT Kereta Cepat Indonesia China (PT KCIC), which was formed in October 2015 and comprises Indonesian entity PT Pilar Sinergi BUMN, which holds 60 percent of shares, and Chinese entity Beijing Yawan HSR Co., Ltd, which holds the remaining 40 percent of shares. The Indonesian entity comprises four Indonesian SOEs—PT Wijaya Karya (38%), PT Perkebunan Nusantara VIII (25%), PT Kereta Api Indonsia (25%), and PT Jasa Marga (12%)—while the Chinese entity comprises five Chinese SOEs, namely China Railway International Co., Ltd (5%), China Railway Group Limited (30%), CRRC Corporation Limited (12%), Sinohydro Corporation Limited (30%), and China Railway Signal & Communications Corporation (23%). PT KCIC has a 25 percent equity stake in the project itself, while the remaining 75 percent stake is made up by a China Development Bank loan of US$4.5 billion.
24Construction of the railway commenced on 21 January 2016, but the project has encountered multiple obstacles. The most significant of those were:
- April 2016: vendors tasked by PT KCIC to carry out land investigations—five of whom were Chinese nationals—were detained by the Indonesian Air Force for trespassing at Halim Perdanakusuma Air Force Base in East Jakarta;31
- October 2019: a construction mishap caused an Indonesian state-owned Pertamina oil pipeline to erupt into flames;32
- January 2020: PT KCIC allegedly breached an embankment, which caused flooding in West Bandung Regency;33
- March 2020: flooding caused by improper landfill and waste dumping blocked the Jakarta–Cikampek toll road, which is one of the busiest routes in the greater Jakarta region;34 and
- repeated hold-ups related to land acquisition (Negara & Suryadinata 2018), which have seen the project affect 6,800 plots of land across eight regencies and cities, 29 districts, and 95 villages in West Java.35
- 36 “Indonesia to Renegotiate Financing for High-Speed Rail Project”, D-Insights (online), 25 April 202 (...)
- 37 Perubahan atas Peraturan Presiden Nomor 107 Tahun 2015 tentang Percepatan Penyelenggaraan Prasarana (...)
- 38 “Indonesia to Renegotiate Financing for High-Speed Rail Project”, D-Insights (online), 25 April 202 (...)
25While the Chinese state can simply displace its citizens and expropriate land for ‘the purpose of the public interest’, pursuant to article 42 of China’s 2007 Property Law (Zhou & Banik 2014), it is bizarre that no one within the PT KCIC consortium appears to have foreseen or pre-empted these land acquisition-related issues prior to commencing construction of the HSR. Indeed, these incidents and more led to significant cost overruns, which Indonesia’s Financial and Development Supervisory Agency (BPKP) determined to be worth US$1.67 billion, after PT KCIC itself calculated them to be US$2.6 billion.36 On 6 October 2021, President Jokowi then signed off on Presidential Regulation No. 93 of 2021, which enables SOEs to apply to the Minister for SOEs to access state funds if they cannot meet cost overrun, or to the Minister for Finance for a financial guarantee if provision of state capital is insufficient.37 The US$1.67 billion figure, however, exceeds the Indonesian government’s current spending capabilities, meaning the China Development Bank (CDB) will most likely provide it with an additional loan, although not the entire amount. PT KCIC shareholders, namely Indonesian and Chinese SOEs, will cover the remainder, although a potential negotiation point might be to alter the ownership stakes in the project such that the CDB loan is converted into either a 50 percent or 60 percent stake in the project for Beijing Yawan HSR Co., Ltd. Whatever the outcome, Indonesia will be further indebted to China.38
- 39 Robert Lea, ‘Eurostar Makes Profit’, The Times (online), 9 March 2012 https://www.thetimes.co.uk/a (...)
- 40 “Kata Faisal Basri, Sampai Kiamat Pun Kereta Cepat Tak Akan Balik Modal” [Faisal Basri says that th (...)
- 41 “China-backed Indonesian rail link seen taking 40 years to breakeven”, Reuters (online), 8 February (...)
26Worse still, the Jakarta-Bandung HSR does not stand to make a profit in the short- to medium-term, if at all. High-speed rails typically take a decade or two to turn a profit—it took more than 17 years before the Eurostar made its first profit, for example39—but in October 2021, Basri remarked that the Jakarta-Bandung HSR would never see a return on investment, not even until doomsday (‘Diperkirakan sampai kiamat pun tidak balik modal’).40 More recently, PT KCIC President Director Dwiyana Slamet Riyadi told a legislative hearing that the decision to relocate the nation’s capital to East Kalimantan would also result in fewer fast train passengers, thereby delaying a return on investment from 20 to 40 years.41
- 42 Interview with Indonesian academic and defence specialist, 3 December 2021. See also Tan (2021).
27As mentioned, I cite and describe these three large-scale projects to illustrate the fact that China is not necessarily concerned with whether such projects constitute worthwhile investments in Indonesia or not, or whether they are easily forecasted to be completed on time and on budget. Rather, as Economy writes, China sees these projects as “longer-term strategic investments”. In fact, as she writes, the CCP “encourages [its] SOEs to undertake investments in high-risk economies (that no other country or multinational would advance) in support of its BRI. Decisions that may appear irrational in the context of liberal political systems and market-based economies in the near term thus often possess a longer-term strategic logic with China” (Economy 2018: 15-16). While Indonesia might believe it is, as Isabelle A. Tan writes, “taking advantage of the Chinese” (Tan 2021), the CCP’s longer-term strategic logic is to maintain a presence in countries such as Indonesia for as long as possible, such that China can exert its influence from within the borders of these countries. And therein lies—at least according to one school of thought—the Gordian knot: Indonesia believes it is taking advantage of China’s soft loans and building a stronger rapport with China, thereby reducing the likelihood that China will impinge on its EEZ in the North Natuna Sea, while China is able to wheel Trojan Horses into Indonesia as and when, with Indonesia possibly unaware of, or naïve to, the long-term consequences to its own national interest and territorial integrity.42 Indeed, with Jokowi’s presidential tenure scheduled to conclude in October 2024—and with his legacy as “Bapak Infrastruktur” (Mr Infrastructure) on the line—it is little wonder that this administration’s priority continues to be improving Indonesia’s infrastructural capabilities by almost any means necessary.
- 43 “AidData’s Global Chinese Development Finance Dataset, Version 2.0”, AidData, 29 September 2021, UR (...)
- 44 John McBeth, “Hidden China Debts Come to the Fore in Indonesia”, Asia Times (online), 18 October 20 (...)
- 45 “Jebakan Utang Cina” [China’s Debt Trap], Koran Tempo (online), 13 October 2021, URL: https://koran (...)
28To further appreciate the significance of China’s strategy, one available data point is of particular significance. As a report published in September 2021 by AidData, a research unit at William & Mary College, revealed, between 2000 and 2017, China committed more than US$34.9 billion in financial aid to Indonesia. As a result, as of 2021, Indonesia had a sovereign debt exposure to China of US$4.95 billion, as well as US$17.28 billion in what AidData calls “hidden” public debt—that is, debt incurred by Indonesian SOEs and other government entities, without a sovereign guarantee.43 In simple terms, 78 percent of Indonesia’s debt to China is not on the government ledger44 but China will no doubt seek to leverage that debt until it is repaid. When Indonesia will be able to discharge that debt, however, is unclear, particularly coming out of the Covid-19 pandemic, and how China might weaponise that debt is a cause for concern. Indeed, one need only look to China’s investment in the Hambantota Port in Sri Lanka —a US$1.3 billion investment that Sri Lanka was unable to repay—to see just how China makes countries repay in kind. In that instance, Sri Lanka was made to surrender not just the majority of its shares in the port to China, but also the management of the port for a period of 99 years.45 Given Colombo’s proximity to India, the geostrategic significance of Chinese control of Hambantota should not be underestimated.
- 46 Interview with Indonesian former ambassador and senior research fellow, 18 January 2022.
- 47 Interview with Indonesian senior diplomat and East Asia specialist, 1 December 2021; Interview with (...)
- 48 Interview with Australian former senior diplomat, 20 December 2021.
29The other reason for citing these examples—and for noting China’s logic in investing in such large-scale projects—is to support the position held by certain senior Indonesian diplomats. That position is that if China’s expansionist aspirations are to be curbed, Western countries might need to initiate more comprehensive relationships with Indonesia, that is, relationships that include a significant economic dimension, rather than relationships based primarily on security and political considerations.46 To expect that Indonesia will limit or cease its lucrative economic relationship with China is unrealistic, especially while the Jokowi administration remains in power. That said, Indonesia would undoubtedly welcome more comprehensive relationships with Western powers,47 and so these countries, if only for geostrategic and security reasons, would do well to evolve their bilateral relationships with Indonesia such that they too comprise a significant economic dimension. As a former senior Australian diplomat noted, bebas dan aktif (free and active) actually frustrates a lot of countries and has an air of entitlement to it.48 Putting pride to one side, however, in geostrategic terms, the windfall would be an Indonesia far less vulnerable to Chinese influence, which, in the long-term, would be worthwhile and beneficial to the security of the broader region.
30As I discuss in the following section, however, one hypothesis is that China has already engineered a situation in the South China Sea (and the North Natuna Sea) such that it can use the threat of repeated incursions in Indonesia’s North Natuna Sea as a bargaining chip to acquire large-scale infrastructure project contracts from the Indonesian government. Alternatively, the more projects it acquires on Indonesian soil, the less likely Indonesia is to push back when Chinese vessels enter Indonesia’s EEZ.
- 49 Mark Thompson, “Showdown Now Looming Over the South China Sea”, Time (online), 12 July 2016, URL: h (...)
- 50 “Malaysian FM sees shift in China’s justification of sweeping South China Sea claims”, Radio Free A (...)
31The most contentious issue that underpins the Indonesia-China relationship is, undoubtedly, China’s repeated incursions into Indonesia’s EEZ in its North Natuna Sea. Notwithstanding a 2016 decision of the Permanent Court of Arbitration in The Hague that declared China’s incursions to be in violation of the United Nations Convention on the Law of the Sea (UNCLOS),49 China continues to maintain de facto control of much of the South China Sea, 90 percent to which it claims historical rights. It has also gradually changed its rhetoric, shifting from its claim that it enjoys historical rights to all territory within its self-proclaimed “nine-dash line”, to now claiming historical rights to the “Four Sha” or Four Sands Archipelagos, a concept the court did not consider in 2016. Those four island groups in the South China Sea to which it lays claim are the Pratas Islands, Paracel Islands, the Macclesfield Bank Area, and Spratly Islands.50
32Not long after the Permanent Court of Arbitration issued its ruling—which China predictably rejected—Indonesia itself responded with a “bland, lacklustre five-sentence statement” that was, as Evan A. Laksmana writes, “insipid” (2016: 382-383). The statement merely called on all claimants to the South China Sea to maintain peace and order. While Indonesia is technically a non-claimant in the region, Laksmana argued that Indonesia’s response was, in large part, informed by President Jokowi’s “lack of personal interest and grasp of foreign policy” (ibid.). The fact that Jokowi boarded the vessel that fired at a Chinese fishing boat may have appeared as Jokowi pushing back against Chinese incursions, but it was not part of a consistent response.
33Laksmana posits two additional factors to explain Indonesia’s haphazard, insipid approach to the South China Sea: first, the Indonesian public’s apparent lack of interest in and/or knowledge of China and its influence on Indonesia has meant that it does not provide the government with a “serious check on the China narrative”; and second, that the Jakarta elite continue to exhibit “historical ambivalence” towards China (ibid.: 384). Other factors are also at play here. First, Indonesia’s minnow navy, which I discuss in depth in the following section, simply cannot patrol the 5,000,000 km2 of water that Indonesia comprises. Second, Indonesia’s longstanding foreign policy of non-alignment means that it is reluctant to escalate matters in such instances, even by resorting to megaphone diplomacy. Third, China does, as one respondent explained, have a far greater and improved understanding of UNCLOS. This means that it is better versed in identifying loopholes in the convention, and impinging on Indonesia’s EEZ, but doing so in such a way that does not violate UNCLOS—e.g., it sends survey vessels into Indonesia’s EEZ, which is arguably a threatening move from Indonesia’s perspective, but not one that violates UNCLOS. The final reason is, of course, corruption in Indonesia at the political and business elite level.
- 51 Interview with senior research fellow (East and Southeast Asia specialist), 17 December 2021.
34Indeed, as Laksmana writes, Jokowi has arguably sacrificed “Indonesia’s strategic capital in the region”, specifically in the South China Sea, in order to keep China onside, without which his economic development agenda would flounder (ibid.: 384-385). This position was articulated by several interview respondents, all of whom were emphatic that political and business elites from both Indonesia and China had used the North Natuna Sea as a bargaining chip. Specifically, China would have promised that in exchange for being granted certain large-scale infrastructure contracts, it would reduce or temporarily halt such incursions.51 Several respondents referenced a US$6 billion loan—deposited into three Indonesian state banks in six separate US$1 billion instalments—which arrived not long after 19 March 2016, when Indonesian naval authorities detained the Chinese fishing boat “Kway Fey” and arrested eight Chinese fishermen on board for “stealing fish” in Indonesia’s EEZ.
35As one of Indonesia’s preeminent Sinologists explained:
- 52 Interview with Indonesian former China-based journalist and correspondent, associate fellow and fel (...)
Go to the [Financial Services Authority] website […] between 2016 and 2017, China agreed to provide a $3-billion loan distributed among three state banks: Mandiri, BRI, and BNI. Then, there’s another fee. From that figure, US$500 million was credited to Bosowa, Jusuf Kalla’s company. Another US$300 million was distributed as credit to Toba Sejahtra. Who owns Toba Sejahtra? Luhut Binsar Pandjaitan. This is actually all the background that explains why we are so close with China.52
- 53 Sukirno, “Inilah 16 Perusahaan Milik Luhut Pandjaitan” [These are Luhut Pandjaitan’s 16 Companies], (...)
36It is necessary to clarify that Bosowa is, in fact, owned by Aksa Mahmud, Jusuf Kalla’s brother, rather than Kalla himself. The respondent was correct with regard to Toba Sejahtra, however, insofar as Indonesia’s Coordinating Minister of Investment and Fisheries, Luhut Binsar Pandjaitan, owns 99.98 percent of the shares in Toba Sejahtera, an Indonesia-based coal mining company.53
37What is so conspicuous, however, is just how brazen those political and business elites involved were about this particular set of deposits. As another respondent explained:
- 54 Interview with senior research fellow (East and Southeast Asia specialist), 17 December 2021.
Yeah, it is public data, that deposit. And the deposit only “made it through” after it was determined who [would] be on the receiving end from our part, and some of those receiving it from our part were companies affiliated with Jusuf Kalla and Luhut, for example. And that was done not far along after we “solved” the Natuna crisis in 2016. So yeah, some of those financial transactions were on public record, I think—for the SOEs, in particular, because they’re state-owned banks, as well. But not many people actually want to dig deeper on that. That’s like touching on the Lord’s [Luhut Pandjaitan] coffers and you don't really want to touch the Lord’s coffers, right? It’s sacrosanct.54
- 55 Audrye Wong, “Reaping What You Sow: Public Accountability and The Effectiveness of China’s Economic (...)
38As Audrye Wong writes, such tactics from China, which she terms “subversive carrots”, are particularly prominent and effective “in low accountability countries, but [then] ineffective in [countries] with high public accountability, where it leads to public backlash against China.”55
39Wong writes:
In contrast, in a country with low public accountability, the sender state can rely on providing subversive carrots to top political leaders as well as crony, politically-connected business actors who control large portions of the economy and also have key political sway over the policymaking process. Carrots promising specific benefits in exchange for a desired political outcome are more easily agreed upon and executed by the political-business elite, likely in a non-public and non-transparent manner. Rents such as kickbacks or bribes will reach political leaders more quickly and directly, without the ability for public opinion, media, or societal institutions to acquire sufficient information or exercise due oversight and punishment (and any critical voices can be easily suppressed). That is, political leaders calling the shots on foreign policy toward China face far fewer constraints in operating outside political norms and institutions.
- 56 Interview with Indonesian senior economist and former politician, 23 November 2021.
40Wong’s reference to “political leaders calling the shots on foreign policy toward China” is relevant for present purposes, but it is chilling to know that China employs these tactics around the world, essentially preying on countries where public accountability is low and corruption is rife. In more insidious ways, as one respondent argued, Indonesia’s relationship with China could have a detrimental effect on the quality of its nascent democracy, insofar as criticism of the Indonesian government’s dealings with China—and the many business connections certain Indonesian oligarchs and political elite allegedly have with Chinese entities—could see such critics censored (and even reprimanded) by the government.56
- 57 See, for example, “New Title for Xi Stokes Concern of a Mao-Style Personality Cult”, Bloomberg (onl (...)
41If the quality of Indonesia’s democracy is therefore at stake, it follows that the less opportunistic members of Indonesia’s political elite should seek a stronger relationship with the US-led bloc, rather than the China-led bloc. Admittedly, greater reliance on a US-led bloc would also impair Indonesia’s impartiality to a degree, but, for all its faults, the United States remains the world’s superpower and a leading liberal democracy, while China—according to some reports—is becoming more and more a personality cult revolving around its head of state.57
42In the following and final section, I discuss the possibility of Indonesia’s military taking the lead by—one day—ultimately siding with the AUKUS member states, albeit at the expense of both its relationship with China and, possibly, with certain ASEAN member states.
- 58 Prime minister’s Office of Malaysia, “Kenyataan Media Berkaitan Perdana Menteri Malaysia dan Perdan (...)
- 59 Ministry of Foreign Affairs of the Republic of Indonesia, “Statement on Australia’s Nuclear-powered (...)
- 60 Interview with senior Indonesian diplomat and East Asia specialist, 1 December 2021.
- 61 Kate Lamb, “Prabowo says ‘understands, respects’ AUKUS pact”, The Jakarta Post (online), 23 Novembe (...)
- 62 Interview with Indonesian academic and defence specialist, 3 December 2021.
- 63 “Aukus deal: US, UK and Australia agree on nuclear submarine project”, BBC (online), 14 March 2023 (...)
- 64 Interview with Indonesian academic and defence specialist, 3 December 2021.
- 65 Interview with Indonesian academic and defence specialist, 3 December 2021.
43Southeast Asian heads of state could understandably have responded to the announcement of AUKUS with suspicion, hostility, or even outright fear—but, fittingly, none of them did. Malaysia appeared to conflate the aim of AUKUS—namely the sharing of nuclear propulsion technology between the US and Australia—with nuclear weapons and believed it could ignite aggression in the South China Sea.58 Meanwhile, Indonesia’s Ministry of Foreign Affairs (Kementerian Luar Negeri or Kemlu) issued a notice stating that it “notes cautiously […] the Australian Government’s decision to acquire nuclear-powered submarines.”59 Crucially, Indonesia does not disapprove of AUKUS. Indeed, nothing about Kemlu’s statement should be considered an outright objection to AUKUS. As one senior Indonesian diplomat explained, Kemlu’s response was a deliberately principled one that sought to remind Australia of the principle of non-proliferation of nuclear weapons, which is also a founding principle of ASEAN. Kemlu therefore responded in the manner it did because it believed that it was, at the time, the right thing to say.60 Subsequently, Indonesia’s Minister of Defence and 2024 presidential candidate, Prabowo Subianto, stated that he understood and respected the AUKUS member states’ right to protect their own national interests in the face of perceived threats. As Prabowo qualified, Indonesia’s official position is that Southeast Asia should remain nuclear free.61 Indeed, it has legitimate concerns that Australia might acquire a highly enriched nuclear reactor for these submarines, which, as mentioned, are not due until after 2040.62 Highly enriched uranium would, at least in spirit, violate Australia’s longstanding commitment to the Non-Proliferation of Nuclear Weapons, while also reportedly costing the Australian government AU$368 billion (£201 billion).63 It is therefore wrong to interpret Kemlu’s response and Indonesia’s ostensible neutrality as impartiality.64 Indeed, the two are not the same, and Prabowo’s remarks confirm that Indonesia is aware of the pressure Australia feels with regard to China.65
- 66 Interview with senior research fellow (East and Southeast Asia specialist), 17 December 2021.
- 67 In August 2021, Indonesia and the United States conducted military exercises involving 3,000 troops (...)
- 68 Masrur Jamaluddin and Brad Lendon, ‘Joint US-Indonesia war games to expand to 14 nations as tensio (...)
- 69 Sabrine Donohoe, “Australian Military Exercise Pitch Black 2022 to Begin”, Foreign Brief (online), (...)
44The establishment of AUKUS does, however, beg the question: Does Indonesia eventually join an AUKUS-plus and/or Quad-plus arrangement? Were it to do so, such a tilt on Indonesia’s part would most likely divide ASEAN beyond repair, as Cambodia and Laos, and most likely Myanmar, notwithstanding its current unclear status in ASEAN, would not stand for an AUKUS- or Quad-aligned Indonesia.66 The current Jokowi administration, however, does not necessarily have to make an official decision as such. Indeed, the inauguration of Andika Perkasa as Commander-in-Chief (or Panglima) in November 2021 signalled that Indonesia’s military would increase cooperation with the US-led bloc, rather than engage China. While serving as Commander-in-Chief, Andika, a Harvard-educated Indonesian military general, said little (if anything) about China. In the short time he served as Panglima—Andika assumed the role at age 57 and a 2004 national law requires commissioned officers to retire at age 58—he did not engage China’s PLA in any military exercises. Rather, under his leadership, TNI announced that Indonesia-United States military exercises, which were conducted on an unprecedented scale in August 2021,67 as part of the Garuda Shield joint-exercise, would be expanded in August 2022 to include soldiers from the United Kingdom, Australia, Japan, Malaysia, Singapore, and Canada.68 Under the moniker “Exercise Pitch Black”, the air forces of Australia, Indonesia, India, Singapore, the Philippines, Thailand, Malaysia, the US, Japan, South Korea, and Germany engaged in military drills and war games. These involved 100 aircraft and 2500 troops hosted at various Australian airbases across the north of Australia. As Sabrine Donohoe wrote, “Exercise Pitch Black represents an allied response within the Indo-Pacific to China’s live-fire drills and firing of ballistic missiles around Taiwan and within Japan’s EEZ.”69
- 70 “US, Indonesia and Australia Hold Live-fire Drill Amid China Tensions”, France 24 (online), 12 Augu (...)
45In addition, on 12 August 2022, 5,000 American, Australian, and Indonesian soldiers engaged in a live-fire drill, which is part of now annual joint combat exercises on the island of Sumatra. The United Kingdom, Canada, France, India, Malaysia, South Korea, New Zealand, Papua New Guinea, and Timor-Leste also sent officials to observe the exercises. Furthermore, more than 5,000 troops from the United States, Indonesia, Australia, Japan, and Singapore participated in 2022’s Super Garuda Shield exercises. At a joint news conference alongside Andika, US Indo-Pacific commander, Admiral John C. Aquilino, denounced China’s threatening actions vis-à-vis Taiwan and affirmed the United States’ commitment to “[delivering] a free and open Indo-Pacific and [being] ready when [the United States needs] to respond to any contingency.”70 Whether or not TNI will change tack under the newly inaugurated Panglima, Laksmana Yudo Margono, is not yet clear, but it would take a significant policy shift to disrupt this momentum.
- 71 “Indonesia-UK Defense Cooperation: How It Works”, D-Insights (online), 22 April 2022, URL: https:// (...)
46With regard to Indonesia-UK cooperation, on 19 April 2022, the two countries agreed to the Indonesia-UK Partnership Roadmap of 2022-2024 at a bilateral meeting between Indonesian Minister of Foreign Affairs Retno Marsudi and the UK’s then-Foreign Secretary Liz Truss. The roadmap comprises several key points pertaining to military and defence cooperation between the two countries, including exploring opportunities to enhance practical exchanges, joint training, delegation visits, exchanges between military academies, and joint defence exercises, as well as maritime security exercises between the Indonesian Navy and the Royal Navy, and jungle warfare exercises between the Indonesian Army and the Royal British Army in 2022-2023. The roadmap also promotes Indonesia-UK defence industry collaboration and skills and knowledge transfer, including through the agreement to build British Arrowhead 140 frigates in Indonesia, and to convene regular dialogues on the implementation of UNCLOS.71
- 72 Reformasi Dispatch podcast – Kevin O’Rourke, Evan Laksmana, Jeff Hutton. 29 September 2021.
47Similarly, a key deliverable resulting from the most recent Indonesia-Australia Foreign and Defence Ministers 2+2 Meeting, held on 9 September 2021, was to begin the process of negotiating a higher-level defence cooperation arrangement. As part of that defence cooperation, Australia could potentially share certain capabilities it derives from AUKUS with Indonesia, pursuant to a separate 2+2 arrangement, including defence technology sharing in the cyber domain.72
- 73 Reformasi Dispatch podcast – Kevin O’Rourke, Evan Laksmana, Jeff Hutton. 29 September 2021.
48The fact that Indonesia is a democracy—albeit an imperfect, nascent one—might also inform its decision, were it compelled to decide between a US-led bloc or China-led bloc.73 Alternatively, Indonesia’s military might simply continue to lead the way, particularly in lieu of any clear strategic position articulated by the Jokowi administration. Indeed, writing in 2019, Yohanes Sulaiman submitted that:
Indonesia is neither strengthening its power projection capability nor building a coalition to address China’s growing aggressiveness in the South China Sea (or at least to fulfil its security goal). (Sulaiman 2019: 607-608.)
49As mentioned, the Jokowi administration does not appear to have a clear strategy vis-à-vis China. In lieu thereof, and further to Sulaiman’s point, the TNI appears to already be building a military coalition of sorts. While its detractors might say that such coalition building runs contrary to the spirit of bebas dan aktif, the diverse array of countries that constitute that coalition size suggests otherwise. And in realpolitik terms, it is a coalition that could swiftly and competently take a stand against Chinese aggression in the South China Sea. As Sulaiman argues, this development is historically consistent. Indeed, under Suharto’s New Order (1965-1998) and throughout Indonesia’s guerrilla resistance during the Independence War against the returning Dutch colonialists (1945-1949), the Indonesian military’s dominant role domestically has meant that Indonesia’s dominant strategic culture is, in fact, its military strategic culture (ibid.: 611). Therefore, it might well be that the military’s approach, over time, prevails as the official position of the Indonesian state. Indeed, if Indonesia truly is “free and active”, as its foreign policy states, it should be free to tilt towards a US-led bloc, if current geopolitical exigencies require it to do so.
50In this article, I have delineated the overriding salient issues and themes that underscore contemporary Indonesia-China relations. I have also argued that Indonesia appears to be muddling its way toward military relationships and understandings with the AUKUS member states, as well as other states that make up the US-led bloc, that should place it in good stead in the event of a military escalation in the South China Sea.
51In geostrategic terms, Indonesia has never been as important to the broader regional security of the East Asian and Western Pacific bloc than it is now. As mentioned, it is the centrepiece to the Australia-China and US-China rivalries, which renders it a geopolitical arena in which countries seek to buy and acquire influence. That said, Indonesia has no coherent China policy; rather, its China policy is personality driven. This arguably makes the perils of Chinese investment in Indonesia and the fact that China sees investment in countries as not merely a soft power grab, but as a long-term strategic investment that enables it to exert its influence within Indonesia’s borders, all the more dangerous. Indeed, this is a key reason why it would be in the interests of the West to develop relationships with Indonesia that, in addition to a military cooperation dimension, must comprise a significant economic dimension precisely for the security of both Indonesia and the broader region. Whether ASEAN can maintain its centrality and provide the regional forums that have historically facilitated diplomacy and dialogue in the face of the geostrategic developments discussed, namely the establishment of AUKUS and the revival of the Quad in response to China’s rising hegemonic star, will likely be answered in the short- to medium-term.
52Indonesia might hope that the status quo is sustainable indefinitely, but the reality is that it needs to prepare for foul weather. While its foreign policy might not, in theory, allow it to align with the AUKUS and Quad member states, a truly ‘free and active’ state should be able to align itself with whomever it deems necessary and appropriate, if the geostrategic exigencies of the time require it do so. In the meantime, Indonesia would also benefit in both the short- and long-term from developing a more diverse portfolio of investor countries, as well as continuing to increase its military joint exercises with Western states. In true Indonesian style—whether by design or coincidence—this is something Indonesia already appears to be doing, albeit in a somewhat muddled, haphazard fashion.