Indonesia in 2006: The foreign policy challenge.

Michael Vatikiotis Singapore

The past year has seen Indonesia weather many storms. There cannot be many countries in the world forced to deal with man- made and natural disasters simultaneously. For Indonesia's newly elected government there was the tsunami and a succession of terrorist acts to recover from. The rise in global oil prices threatened domestic stability, and while other governments might have used all this to put off hard political decisions, Indonesia went ahead with local elections, a crackdown on corruption and finally raised domestic fuel prices. The sky did not fall.

Domestic distractions, although unavoidable, have in my view held Indonesia back from an important global responsibility as a democracy and it would be well and good if the coming year could see Indonesia start to play a cautiously and carefully calibrated role on the wider international stage.

Self-obsessed Indonesians often miss this point. The success of the 2004 elections and the transition to a directly elected president has transformed what the world perceived for the past eight years as a basket case of a country into the world's third largest democracy. And yet time and again over the past year when President Susilo Bambang Yudhoyono was presented with a chance to actively harness this transformation to regional or global issues, domestic problems got in the way.

Many Indonesians I speak to are skeptical about just how much impact Indonesia can have. I normally respond by saying that successful foreign policy is about being bold and imaginative. The 1955 Asia-Africa Conference in Bandung was a bold and imaginative move. In the case of contemporary Indonesia, being the largest Muslim population in the world with a democracy that genuinely provides for untrammeled freedom of expression is already reason enough for the world to pay some attention. More specifically building on the successful management of a complex direct election, implementation of local autonomy and securing of a peace agreement in Aceh, Indonesia is well positioned to play a role in promoting political reform in a post conflict environment.

Let's take the Middle East as an example. The Israeli- Palestinian conflict appears to be moving into a new phase. Israel's disengagement from Gaza and legislative elections in the occupied territories at the end of January are generating domestic political and security challenges for the Palestinian National Authority based in Ramallah. There is no shortage of aid and advice coming from Europe and the United States, but Palestinians tell me that they want more relevant , practical advice about how to build a democracy in a fractured and conflict-ridden society.

There is, for example, the whole question of the relationship between religion and the state to be addressed. There is communal stress in areas on the West Bank, in Gaza and east Jerusalem where generations of refugees and people who have grown up with a rock or a gun in their hands.

What can Europe and the United States teach these people about the reality of social and political reform? The superpowers might be best positioned to exert leverage over Israel and the Palestinians on larger security issues, but countries like Indonesia are ideally suited to guiding the Palestinians on the road to a peaceful democratic transformation.

Closer to home Indonesia should take a more proactive stand on political reform in Myanmar. Former foreign minister Ali Alatas visited Yangon recently as a special envoy of the United Nations Secretary General. A good follow up would be to gently persuade the military junta that a democratic transition like the one Indonesia has experienced, unlike the model Washington appears to have deployed in Iraq, can be inclusive and avoid wholesale and reckless retribution.

Then there's the whole issue of Indonesia's standing in the Islamic world. In Jakarta I hear concerns about the strengthening influence of conservative Islamic teaching. The government would do well to act more decisively and less defensively when it comes to countering intolerance. To my mind a low point this year was the President's slow response to those who would have churches closed and stricter enforcement of Islamic law. This damaged Indonesia's image as a moderate Muslim nation.

Instead, Indonesia should be marketing its unique brand of secular and pluralistic Muslim identity. The wider Muslim world, particularly the Middle East, needs to be shown how Islam can thrive in conditions of democracy and economic prosperity. Foreign Minister Hassan Wirajuda's interfaith dialogue makes a good start.

But going further, I would urge Indonesia's moderate Muslim NGOs and universities to reach out and find a role to play overseas, without feeling inferior to the traditional Islamic centers of learning in the Middle East, where atrophy and bitterness prevails. It is time for the Islamic new world to assert itself.

Of course, there are those who will say that Indonesia is held back by the poor quality of its bureaucracy and the inexperience of its politicians. Government leaders are wary of spending too much time overseas lest they be criticized for ignoring problems at home.

Parliamentarians are treated as pariahs when in fact they should be groomed and held up as the vanguard of the region's truly democratic lawmakers Finessing the art of delegation and the judicious appointment of experts and emissaries would do much to overcome this problem.

Indonesia has no shortage of intellectual talent. A country as large as Indonesia has plentiful human resources. Now that the government feels more secure politically, it is time to unleash this potential on the region and the world.

The writer is a visiting research fellow at the Institute of Southeast Asian Studies.