By Phuong Nguyen
Foreign Minister Retno Marsudi on January 8 delivered an annual statement outlining the priorities for Indonesia’s foreign policy in 2015. While her speech expands on elements previously raised by President Joko “Jokowi” Widodo such as the vision of Indonesia as a maritime fulcrum, it also infuses more nuances into the question many continue to ask: How will Indonesia act, regionally and globally, over the next five years?
Retno reaffirmed that Indonesia will continue a “free and active” foreign policy, long a bedrock of Indonesian diplomacy but which carried somewhat different meanings under different governments.
Over the years, it became accepted that Indonesia would act as an independent voice on the world stage while embracing regionalism through ASEAN. Jokowi made clear that free and active to him means “making friends with countries that can provide Indonesia with benefits” since, as he put it, “What’s the point of making friends if we are always on the losing end?”
In addition to stressing traditional issues of concern such as sovereignty and the need to better protect Indonesians abroad, Retno made clear that economic development will be a key new pillar in Jokowi’s foreign policy.
Under this pillar, Indonesia seeks to pursue maritime cooperation with friendly countries, enforce laws and regulations and work with other governments to eradicate illegal fishing in its territorial waters, increase its exports to new markets, and attract more foreign investment. Two areas the minister identified for cooperation with foreign investors are the construction of deep-sea ports and development of power plants. The Foreign Ministry will form an inter-agency taskforce to ensure business opportunities and economic agreements with other countries are followed up effectively, a priority set out by Jokowi.
Retno said the government is committed to creating a “one-stop service” for foreign companies looking to invest in Indonesia and is finalizing a new bilateral investment treaty template between Indonesia and other countries.
The bilateral investment template will demonstrate how serious the administration is about boosting foreign investment. Indonesia last year announced it will not extend bilateral investment treaties with 67 countries, including China, the Netherlands, and Singapore, when they come up for renewal in July 2015, preferring instead to renegotiate on new terms. It falls on Jokowi’s cabinet to present a new bilateral investment treaty template in a timely manner and one which ideally would include adequate protection for investors.
Some observers are worried that an emphasis on internal development means Indonesia may become more inward-looking or turn away from ASEAN. In response, Retno underlined that “Indonesia will not lessen its engagement with the world.” She cited Indonesia’s active role in maintaining ASEAN’s regional security, its views on global issues from climate change to the rise of the Islamic State, and its contributions to development in the South Pacific as well as UN peacekeeping missions.
Indeed, getting economic diplomacy right may be a decisive factor determining whether Indonesia can continue to thrive as an emerging power and leader within ASEAN.
Southeast Asian countries have long regarded Indonesia a first among equals primarily because of its size, a role most Indonesian leaders have capitalized on. But while Indonesia’s achievements since 1998 are impressive and its contributions to ASEAN laudable, Jakarta’s assertive stance on some regional issues was at times met with protest from neighbors on the grounds that Indonesia should first get its own house in order before pointing at others – although overall Jakarta is seen as successful in its role as an honest broker in the region. Without an economic profile and resources to match its size, Indonesia may find it increasingly hard to exert regional leadership as others continue to expect more of it.
The recent sinking of Malaysian, Thai, and Vietnamese vessels caught fishing in Indonesian waters illegally could be seen as a response to the frustration in Indonesia that it had long been expected to act benevolently toward its neighbors in the maritime domain for the sake of regional harmony, while its fishermen were losing their livelihoods to foreign fishing crews. The “shock therapy” policy was born out of a growing gap between others’ expectations of Indonesia and its available resources. Addressing this gap may be thorny, but it is critical for both Indonesia’s economic prosperity and the future of regional cooperation.
A glimpse of Indonesia’s economic diplomacy was on display when Jokowi met with other leaders during the Asia Pacific Economic Cooperation summit in Beijing last November. He asked President Barack Obama to lift restrictions on Indonesian palm oil entering the U.S. market. With Chinese president Xi Jinping, Jokowi suggested a bigger role for Indonesia in the China-led Asian Infrastructure Investment Bank and urged the bank open its headquarters in Jakarta.
This brand of economic diplomacy will likely be very direct and imbued with Indonesia’s sense of nationalism. At the same time, Retno and those advising Jokowi on foreign policy will need to show that it is also results-driven and effective.
Regarding ASEAN, Retno said it remains a priority – rather than the cornerstone of (an expression stressed under former president Susilo Bambang Yudhoyono) – in Indonesia’s foreign policy. As a country with the largest Muslim population and the third largest democracy, Indonesia has developed an interest in various issues in other parts of the world. It has often urged ASEAN to speak on global issues, believing doing so would strengthen the grouping’s role globally. But in the near future, Indonesia can be expected to be more comfortable casting its net beyond the ASEAN framework on issues in which it believes it has strategic interests.
Many aspects of Indonesian diplomacy under Jokowi will be decidedly down-to-earth and people-oriented, but Jokowi and his team clearly have high aspirations for Indonesia both as a regional and global player. The quest to find the matching resources to fulfill that vision is beginning.
Phuong Nguyen is an adjunct fellow at CSIS focused on Southeast Asia.