Megawati's trip: RI's new geopolitical realities

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.