Tue, 15 Sep 2009
IN MOST other respects this is a golden age for Indonesian diplomacy. Its relations with its neighbours are sometimes prickly, especially with Malaysia, with which it squabbles over everything from maritime boundaries to the treatment of migrant workers. And there will always be some resentment of Singapore, a regional haven for the wealthy and, at times, a bolthole for fugitives from Indonesian justice. But these two are also partners with Indonesia in the Association of South-East Asian Nations (ASEAN), so they are among its closest allies. In general Indonesia is on good terms with all countries.

Its international standing has risen. Besides being an applicant-in-waiting for what would become the BRIIC group of leading emerging markets, it is a member of the G20 group of countries that is taking on more responsibility for running the world. It is seen as a democratic bulwark against extremist Islam, and as a vital American ally. Hillary Clinton included Indonesia on her first foreign tour as secretary of state. President Barack Obama, who spent four years at school in Jakarta, is due to visit, probably in November. As already noted, China and India are also courting Indonesia. So are Japan and the European Union, which in July lifted a ban on four Indonesian airlines on safety grounds, removing a big irritant.

As much the most populous country in South-East Asia, and its biggest economy, Indonesia has always played a dominant role in ASEAN. The regional group, after all, was founded in 1967 partly to contain Indonesia after a confrontation with Malaysia that stopped short of war. But under Suharto Indonesia led by stealth, through the power of veto, rather than as ASEAN’s public face. Now there are signs that it may become more assertive, and in an encouraging way - speaking up for the importance of democracy and human rights in a group that is too often prepared to soft-pedal, especially over Myanmar.

As ASEAN moves towards greater economic integration at glacial speed, Indonesia has a belated chance to position itself as a regional hub. Officials like to point to this year’s decision by Volkswagen of Germany to assemble cars in Java for the ASEAN market. The underlying argument is that Indonesia, because of the size of its domestic market, should be the logical destination for foreign investors looking for a base within ASEAN from which to attack the regional market. But so far firms have rarely chosen Indonesia for such a role.

One reason is the range of obstacles to doing business cited earlier in this report, from unreasonable nationalism through endemic corruption and administrative confusion to appalling infrastructure. Another is Indonesia’s image problem. It suffers unfairly from an outside perception that it is a risky and unstable place. An instructive comparison is with India, which has seen far more violent and intractable insurgencies - from Kashmir on the periphery to Maoist Naxalites in its very heart. It is also prey to many more frequent and murderous terrorist attacks, and has testy relations with a nuclear-armed neighbour. Yet, in stark contrast to Indonesia, it is considered a bastion of stability.

Some Indonesian thinkers, meanwhile, are looking beyond ASEAN. Rizal Sukma, of the Centre for Strategic and International Studies, a Jakarta think-tank, has argued that good relations with its neighbours in ASEAN should not be the country’s only concern. His call for a “post-ASEAN foreign policy” reflects both frustration with the caution shown by the regional group and a sense that it is time for Indonesia to adopt a higher profile.

With luck, it will. It has already shown remarkable powers of recovery after a long dictatorship and economic collapse. It could become a model of democratic change, Muslim tolerance, poverty eradication and rapid economic development.

As this report has shown, at present all of these are at best work in progress. The country is still struggling to meet its interlinked goals of sustained economic prosperity and political stability. But it is inching closer, and its chances of getting there have never been better.



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