Megawati's trip: RI's new geopolitical realities

James Castle, President Jakarta Office American Chamber of Commerce

A fundamental diplomatic realignment is underway in the region. Whether by accident or design, President Megawati Soekarnoputri's just concluded tour of China, India and Korea is a profound reflection of this reality. The war on terrorism is merely a sideshow. It would be a serious mistake for Indonesia's friends to make it the cornerstone of their bilateral relations.

The President's most substantive visit was to China. The reciprocal visits of Chinese Prime Minister Zhu Rong Ji to Indonesia last November and President Megawati to China in March signal the earnest desire of both leaders to put past bilateral troubles behind them.

The Sino-Indonesia relationship has been warming steadily since diplomatic ties, broken in 1967, were restored in 1990. The courtship was temporarily derailed by the Asian crisis. September 11 has presented both serious challenges and major opportunities to the two governments and gave new urgency to restarting the process.

China, the world's most populous country, is attracted by abundant natural resources including oil and gas, timber, coal and palm oil of Indonesia, the fourth most populous country in the world. China's broader strategy has been to rebuild its geopolitical clout in Southeast Asia through strategic trade and investment activities.

Indonesia, in addition to its desire to penetrate the China market, most immediately for its large offshore gas reserves, is also eager to seek other trade opportunities and mobilize the strength of its own commercially dominant ethnic Chinese minority. But a much deeper game is also being played.

China is eager to expand its presence in the region as part of what it sees as its natural rivalry with Japan and the United States. Indonesia is eager to reduce its financial dependency on Japan and the U.S. and develop foreign policy alternatives to counterbalance the aggressive demands of Washington in the anti- terror struggle.

It is not that Indonesia supports or is soft on terrorism. Rather, there is a growing resentment of what it sees as the overbearing attitude of the U.S. and the short-term thinking that seems to drive its ambitions in the region. This sentiment existed before the Asian crisis and Sept. 11. These crises merely exacerbated it.

Indonesia naturally sees China as a potential counterweight to the U.S. This dovetails with China's concerns about the U.S. which are as much the product of its own grand vision of itself as a dominant world power with the U.S. as its only true rival, as it is of any specific acts of the U.S.

Moreover, the major economies of developing Asia have long been seeking new forms of association to balance their general dependency on the U.S. This desire had its expression in the early 1990's in the struggle for policy supremacy between APEC (Asia Pacific Economic Cooperation and EAEG (East Asia Economic Group). Australia and the U.S. supported APEC. Malaysian Prime Minister Mahathir Mohamad championed EAEG.

APEC was clearly winning the battle for the minds, if not the hearts, of Asian leaders when the Asian financial crisis occurred. The crisis weakened APEC and gave new impetus to the search for alternatives. The EAEG concept resurfaced in new form as a potential financial support system to rival the IMF. This proposal did not go far because of U.S. opposition and the huge financial burden it would have placed on the moribund Japanese economy, the only one in the region with the wherewithal to make an Asian Monetary Fund a reality.

But, although nothing concrete emerged from these efforts, it would be a mistake to ignore the sentiments they reflect. One thing the proposals had in common was the exclusion of Caucasian countries including Australia which has never been able to convincingly portray itself as part of Asia.

The prospects for Southeast Asian diplomacy have become even brighter with the renewed interest of India in the region. India is once again attempting to reassert itself diplomatically in the region. The collapse of the Soviet Union liberated India from its awkward alliance with a socialist comrade and made it easier for its political leaders to experiment with market-based economic solutions. As India moves out from 50 years of economic autarky into the global arena, it will become a vital source of investment and trade to rival China in the region.

Indonesia is particularly well placed to benefit. The political thinking of Indian independence leaders like Mahatma Gandhi and Jawaharlal Nehru helped provide attractive concepts for adaptation by Indonesian nationalist leaders like Soekarno, Muhammad Hatta and Sutan Sjahrir in the 1930's and 1940's.

Gandhi's principles of cooperation and swadeshi or self- sufficiency took deep root in the Indonesian koperasi movement and concepts like berdikari (standing on one's own feet) and mandiri (independence). The elitist democratic socialism of the Indian Congress Party provided the intellectual underpinning for the creation of Indonesia's vast state-owned enterprise system that burdens the economy today. And Indonesia's dismal romance with its own cooperative movement still remains a powerful ideological force in Indonesian bureaucratic thinking.

The February visit of six Indian members of parliament to Brunei, Malaysia and Indonesia last February is the most recent sign of India's new diplomatic offensive. The delegation included two Indian Muslim MP's. Its purpose was to promote India's position in its explosive dispute with Pakistan over Kashmir, where India would dearly love to neutralize Indonesia's natural sympathy for Muslim Pakistan against Hindu India.

The picture becomes even more complex when Japan's interests are considered. It was no coincidence that Japanese Prime Minister Junichiro Koizumi visited Indonesia and the other four founding members of ASEAN last February proposing a hastily conceived Japan-ASEAN trade cooperation scheme barely two months after China and ASEAN had inked a similar pact in Jakarta.

Japan was obviously shocked by China's proposed free trade area with ASEAN. It has always considered Southeast Asia its natural sphere of influence. But the region sees China in the ascendancy and Japan in the decline. Despite representing the world's second largest economy, Japan's diplomats have always punched below their weight. This is due both to Japan's persistent reluctance to assume policy leadership and political sensitivities resulting from the abuses of the Japanese military that occupied much of Asia during World War II.

Asia's geopolitical story of the 21st century will be the re- emergence of Chinese and Indian influence in the region. Will this be at the expense of Japanese and American interests or in concert with economic growth and political dynamism to the mutual benefit of all? Indonesia is in an ideal position to channel this inevitable competition into constructive aid, trade and investment channels. President Megawati's trip was a positive step along this road.