COVID-19 and the hidden threats to Australia-Indonesia relations

Jeremy Costa | Australian Foreign Policy Fellow

Image Credit: DFAT / Ferdi Oktaviano

Academics, politicians and policymakers alike have long lamented Australia's inability to form more significant, influential and mutually beneficial relations with Indonesia. In relative terms, economic relations between the two neighbours are negligible, despite optimism that Indonesia's era reformasi and democratic transition would naturally lead to vastly improved trade. As COVID-19 shifts political and economic forces around the globe, the Australia-Indonesia relationship faces an array of new challenges.


Reliance on Personal Relationships

The pandemic has, among other disruptions, rendered irrelevant the partnership's traditional reliance on face-to-face diplomacy. It is no coincidence that the most successful periods of Canberra's relationship with Jakarta have coincided with the close personal rapport of its leaders.


Former Australian prime minister Malcolm Turnbull cultivated a particularly close relationship with Indonesian President Joko Widodo. When Prime Minister Scott Morrison ousted Turnbull from government in 2018, such was his degree of concern over the threat to the relationship that he yielded to the Indonesian president's request for Turnbull to represent Canberra in an upcoming state visit, despite heavy criticism from notable coalition party members.


Jamie Mackie from the Lowy Institute of International Policy warned back in 2007 that reliance on the personal chemistry between heads of government was unsustainable,


"The basic determinants of success or failure in our relations with Indonesia will depend on more enduring factors grounded in our respective national interests, not on mere accidents of personal chemistry." (p.21)


It is a facet of the relationship that contrasts with Australia's most successful bilateral relationships. Australia's partnership with the United States, for example, endured a Trump presidency characterised by alliance instability. A recent Lowy poll noted that a significant majority of Australians still view the US relationship favourably.


However, for an Australia-Indonesia relationship that lacks the political, cultural, historical and institutional connections of Australia's most robust relationships, the pandemic represents a significant threat.


Canberra's stake in Jakarta's China choice

Australian policymakers likely watch on with significant unease as Indonesia continues to drift toward an entrenched relationship with China.


In the past, Indonesia has, like many of its Southeast Asian neighbours, attempted to navigate with relative impartiality geopolitical competition between China and the United States.


However, former Indonesian Trade Minister Tom Lembong is among a chorus of commentators who warn that Indonesia is edging toward going "all in" on its relationship with Beijing. Lembong has urged the United States, Australia and its allies to lead a coordinated effort to sway Indonesia to reduce its reliance on the economic powerhouse.


But Canberra is likely to refrain from participating in any overt campaign to discourage Jakarta from further entangling itself with China. The Lombok Treaty, signed by Indonesia and Australia in 1996, and reaffirmed in 2015, stipulates that both nations will not interfere in the other's internal affairs. The treaty has been credited for Australia's restraint in the past, most recently regarding its detachment from the West Papuan independence movement.


To further complicate these developments, Indonesia is also benefiting from the downward spiral of Australia-China relations, with the Financial Times reporting that China's ban on Australian coal has boosted demand for Indonesia's exports.


Strategic and cultural issues as a disruptive force

The recent implementation of the Indonesia-Australia Comprehensive Partnership Agreement (IA-CEPA), a free trade agreement between the two countries, is an important step toward boosting bilateral trade and investment. However, there remains a significant implementation challenge.


Both countries have, and will continue to acknowledge the geopolitical significance of the relationship, but it is a reality that the economic relationship has so far failed to live up to expectations.


As we await the impact of the IA-CEPA, the countries must search for alternative ways to maintain constant cooperation. For example, Canberra should seek to enhance coordination on complementary strategic objectives and avoid escalation over strategic differences. Recent reports that maritime border talks have stalled over unresolved "technical amendments" is an example of the kind of issues the relationship should desperately seek to avoid.


As former prime minister Paul Keating observed, it is a relationship that is, and likely always will be, "fraught with the dangers of misunderstandings".


Jakarta's growing relationship with China at a time of significant Sino-Australian tension, coupled with the diplomatic disruption of the pandemic, are the most recent fault lines of a relationship that has come to be defined by its vulnerabilities.


Jeremy Costa is the Australian Foreign Policy Fellow for Young Australians in International Affairs.