Southeast Asian Regional Processes from Indonesia’s Perspective

SOUTHEAST ASIAN REGIONAL PROCESSES FROM INDONESIA’S PERSPECTIVE

Judit Pach

SOUTHEAST ASIA AND THE INDONESIAN FOREIGN POLICY

Indonesia has an independent foreign policy, traditionally based on a diversified system of relations with the Association of Southeast Asian Nations (ASEAN) in its centre1 as it is the main player shaping Southeast Asian regional processes.

Indonesia’s regional focus—which is on the Southeast Asian region—has not changed in general for decades, but, in recent years, the country has become increasingly active in the Indo-Pacific region, and in global affairs, too. A new element in Indonesia’s classical geopolitical approach is the growing importance of economic diplomacy. It has been gaining ground in the country’s foreign policy since 2014, during the presidency of Joko Widodo, and even more since October 2019, the second term of the president.

Indonesia is considered today as the world’s third-largest democracy and the most populous Muslim-majority state that has successfully built up its democratic institutions and has undergone a comprehensive modernisation process in the past twenty-two years. In its foreign affairs, Indonesia is positioning itself as a stabilising force in the region while emphasising that it aims to protect the country’s territorial sovereignty. Although not directly involved in the South China Sea dispute, Indonesia plays a stabilising role in settling the differences between some ASEAN members and China. Jakarta also actively tries to settle its border disputes with some of the neighbouring ASEAN countries such as Malaysia and Singapore, and increasingly protects the interests of the large numbers of its citizens working abroad, among others, in the two above ASEAN countries.

THE SOUTHEAST ASIAN REGIONAL ARCHITECTURE: INDONESIA AND ASEAN

In the dynamics of global power relations, the importance of Asia in world politics has grown dramatically. The economies of the Asia-Pacific

INDIA

RIAU ISLANDS

The borders of Indonesia

COCOS (KEELING) ISLANDS CHRISTMAS ISLAND PHILIPPINES

PALAU

INDONESIA

EAST TIMOR

AUSTRALIA MICRONESIA

PAPUA NEW GUINEA

region, including Southeast Asia, have also been reaching very high growth rates this decade (however, the COVID situation will significantly slow down this process, but only in 2020). The constant economic growth in Southeast Asia contributed to the emergence of a huge market. ASEAN, with a population of 650 million,2 is currently one of the most dynamically developing regions in the world.

Indonesia is a leading state of ASEAN (with the ASEAN Secretariat based in Jakarta). After the fall of Soeharto in 1998, Indonesia built up and consolidated its democratic institutions while growing into the third most populous country in the world (with a population around 270 million) after India and China. International institutions predict that, by 2030, Indonesia will be the sixth- or seventh-largest economy in the world, with a consumer class of 135 million.3 Due to its democracy-based multiparty political system, growing regional influence, and robust business opportunities, Indonesia is an unavoidable player in the Southeast Asian region.

In addition, it is worthwhile to note that Indonesia’s confidence in ASEAN and beyond has increased since its participation in the G20 group. Starting from the era of President Yudhoyono’s administration, Jakarta considers the G20 as an appropriate international instrument for assessing the global economy and for preventing future financial and monetary crises. As the only G20 member country from the ASEAN region, Indonesia uses the opportunity to represent the interests of Southeast Asia and, simultaneously, act as a spokesperson for ASEAN countries.4

Since 2014, during the years of the Joko Widodo administration, the country has increased its engagement in the Southeast Asian and IndoPacific regions and beyond, as well as with various international organisations. A leading ASEAN and an emerging G20 member, Indonesia shows its growing influence both in regional and global politics. Indonesia has considerably contributed to the stability and security of Southeast Asia and to its economic integration so that the 53-yearold ASEAN remain to be able to maintain peace and stability in the region.

Currently, Indonesia is also promoting synergy between the regional organisation and the United Nations as a non-permanent member of the UN Security Council in 2019–2020.5 One of Indonesia’s main roles in the region has always been to preserve peace. In the past, the country took part in the peace process during the conflicts in Cambodia and Vietnam, where ASEAN appointed Indonesia as an intermediary. Indonesia also had a hand in solving the conflict between the Philippine Government and the Moro National Liberation Front (MNLF). Jakarta actively participated in the formation of ASEAN’s security community.6 This security community also defends the organisation from non-military threats, such as terrorism, separatism, and transnational crime, and reflects one of ASEAN’s principles, namely, the rejection of aggression, use of force, or any other actions contrary to international law. Indonesia continues to encourage the strengthening of maritime security cooperation in the region to tackle illegal, unreported, and unregulated fishing. Besides, the country is also the driving force in the implementation of the East Asia Summit’s (EAS) Statement on Enhancing Regional Maritime Cooperation which was initiated by Indonesia and was accepted in 2015.

To ensure the centrality of ASEAN, Indonesia also initiated the issuance of the Joint Statement of the Foreign Ministers of ASEAN Member States on the Maintenance of Peace, Security, and Stability in the Region in July 2016. To solve the issue of its migrant workers, Indonesia contributed to the Vientiane Declaration on Transition from Informal Employment to Formal Employment in 2016 which mostly guaranteed protection to informal workers. Indonesia also became the initiator of the establishment of the ASEAN Seaport Interdiction Task Force (ASITF) to combat illegal narcotics trade through seaports. Jakarta is aware that there are still a number of internal ASEAN problems related to the conflict of the Rohingyas, security instability in the Southern Philippines, terrorist threats, the conflict in the South China Sea, and various other border issues requiring long-term solution. However, in general, the successful evolution of ASEAN is recognised both inside and outside the region. ASEAN’s main achievement

Kiribati Palau

5 Fiji

New Caledonia Micronesia Marshall Islands Vanuatu Tuvalu Solomon Islands Cook Islands French Polinesia

Nauru Tonga Niue Samoa Kazakhstan Kyrgyzstan Tajikistan Uzbekistan

Papua New Guinea

New Zealand Australia

ARF SCO

North Korea Mongolia EU East Timor

EAS

SAARC

Bangladesh Pakistan Sri Lanka

Afghanistan Bhutan Maldives

2 Nepal

Canada

Russia

South Korea Japan

3 China Chile Hong Kong, China Taiwan (Chinese Taipei) Mexico Peru

US

Brunei

1 Indonesia Malaysia Philippines

4 Singapore

ASEAN +3 APEC

Thailand Vietnam

Myanmar (Burma) Cambodia Laos

Lower Mekong Initiative (LMI)

India

WHAT DOES ASEAN CENTRALITY MEAN? Legend: ASEAN

energy and the environment technology political cultural economic security secretariat seat of ASEAN/+3/East Asia Summit (EAS)/ ASEAN Regional Forum (ARF) secretariat seat of South Asian Association for Regional Cooperation (SAARC) secretariat seat of Shanghai Cooperation Organisation (SCO) secretariat seat of Asia-Pacific Economic Cooperation (APEC)

has undoubtedly been the maintenance of peace and stability in the region for more than five decades. The role of ASEAN, however, can still be increased both internally and externally. Internally, the acceleration of the achievement of the ASEAN Community Vision 2025 has to be maintained. Externally, collaboration with dialogue partners can still be increased in various issues and programmes to achieve a more prosperous region focussing on deepening economic cooperation and free trade agreements.

Based on these various developments, ASEAN must move forward with playing a broader and more real role on both regional and global levels. ASEAN can achieve this through further contribution to solve the above-mentioned problems.

REGIONAL CONFLICTS AND INDONESIA

One of the most pressing issues requiring solution is the dispute between some ASEAN member states and China in the South China Sea. At the ASEAN Summit in June 2019, Indonesian President Joko Widodo reaffirmed his country’s commitment to continue negotiations between ASEAN and China to establish a code of conduct in the South China Sea. According to Indonesia, all parties must preserve the stability and peace of the South China Sea, the right to free passage and guarantee free overflight. The parties must exercise restraint and must refrain from steps to increase tensions, and the dispute must be resolved through negotiations in accordance with international law, namely, the 1982 United Nations Convention on the Law of Sea. Thus, Jakarta strongly rejects China’s claim to the maritime areas of Indonesia’s exclusive economic zone (EEZ) near the Natuna Islands.7

Generally, ASEAN distrusts China, fearing that Beijing is undermining ASEAN centrality and is trying to challenge both its unity in handling the South China Sea conflict and, recently, its COVID-19 response. ASEAN and Indonesia most probably will continue with their balancing strategies to utilise the opportunities offered by China (in trade, investment, and connectivity) while avoiding becoming overly dependent on it, both politically and economically.

Since its own initiative at the ASEAN Summit in June 2019, Indonesia has been pursuing the institutional framework of the South East Asia Security Policy architecture8 (for example, the East Asia Summit, EAS; ASEAN Regional Forum, ARF; ASEAN Defense Minister Meeting, ADMMPlus) to extend its stabilising effect to its wider environment.

As the world’s most populous Muslim-majority country, Indonesia plays an active role in matters affecting Muslims in the region, human rights and humanitarian issues affecting Muslim minority groups in particular (as seen during the Rohingya crisis). It aims at taking the lead in shaping ASEAN’s internal affairs (as, again, in the Rohingya crisis) and external relations (as with the South China Sea dispute or the Korean Peninsula).

Indonesia is a major emitting state of labour migration, with nearly eight million nationals working abroad today (mostly in Malaysia, Singapore, South Korea, Hong Kong, Taiwan, and in the Gulf countries), but not of asylum seekers. Indonesia actively supported the creation of the Global Compact for Migration and the Global Compact on Refugees, primarily to protect its citizens working abroad as migrant workers. Indonesia is not a destination country for migration, it does not support the settlement of migrants arriving in the country as a transit point for migration to Australia and considers their repatriation or placement in a third country as a solution.9

AN INDONESIAN PERSPECTIVE ON REGIONAL PROCESSES

Foreign Minister Retno Marsudi has systematically outlined Indonesia’s perspective on regional policy and beyond in her speech in January 2020.10 According to her, major world powers continue their efforts to increase their spheres of influence in Southeast Asia. Amid Chinese–US rivalry, distrust hinders the creation of a conducive environment. In this situation, Indonesia proposed the Indo-Pacific Concept last year, as collaboration would create opportunities, develop new centres of economic growth, and offer solutions to the challenges. Indonesia and ASEAN aim that this principle shine through the ASEAN Outlook on the Indo-Pacific. This Outlook is inclusive and open for cooperation with all interested parties.

In 2023, Indonesia will become the Chair of ASEAN. ASEAN will continue to be the cornerstone of Indonesia’s foreign policy. ASEAN has adopted the ASEAN Outlook, and in the next five years Indonesia wants to ensure that the implementation of the Indo-Pacific cooperation will happen. Indonesia plans to host the ASEAN Indo-Pacific Infrastructure and Connectivity Forum11 (probably in 2021 because of the current pandemic) to foster this process.

In the field of trade, ASEAN sees that protectionism has given birth to new trade barriers that ultimately put pressure on global trade. Because of the slowdown, global economic growth continues to be revised downwards. In the midst of the increasingly difficult situation, the Indonesian economy is predicted to grow 5% (and—because of COVID-19—even below 2.1% in 2020).12 Amid protectionism, Indonesia defends itself with its large and growing domestic market. A large domestic market makes the Indonesian economy indispensable in any future regional economic development, as many parties predict that, based on purchasing power parity, Indonesia will be among the top ten largest economies by 2030. On the grounds of this objective condition, Indonesia wants to establish profitable cooperation with countries in the region and beyond.

Meeting geopolitical interests can give birth to cooperation but can also lead to conflict. Related to the geopolitical dynamics of the region, there are several implications that ASEAN needs to anticipate. These dynamics could have negative implications for Indonesia and the regional stability if not managed properly. Today, besides trade, leading issues in the region are maritime security, energy security, and territorial disputes. Indonesia is directly involved in all three matters. If the country does not have a high bargaining power from the aspect of military, and especially navy capacities, the country’s sovereignty can come under threat in disputed sea border territories. The economic implications of the regional dynamics can be simultaneously both positive and negative. The positive implication involves more open opportunities for cooperation between countries in responding to threats and challenges related to maritime security and energy security, such as threats from piracy and terrorism. To respond to this threat, the key is enhanced cooperation between countries in the region. On the other hand, the negative implication is the possibility of using naval forces to secure marine resources in disputed waters, mainly fisheries, and oil and gas fields. This is obvious in the dispute over the South China Sea and the Sulawesi Sea, where countries used military power to seize the natural resources claimed by Indonesia as its EEZ. The arms race in Asia will harm Indonesia if Jakarta does not respond proportionally. According to Joko Widodo’s cabinet and the country’s Ministry of Defence, Indonesia has to develop its military force taking into consideration the minimum essential level so that the gap of power between Indonesia and other countries in the region do not widen.13

Developing the Indonasian Navy’s combat power aims not only to protect and secure the integrity of Indonesia but also to safeguard the country’s economic interests. With the Indonesian economy’s increasing interaction with East Asian countries and other regions of the world, its armed forces have to be able to secure the country’s EEZ.14

ASEAN’S INDO-PACIFIC CONCEPT

An important regional development in 2019 was that, mainly on an Indonesian initiative, ASEAN adopted its own Indo-Pacific strategy.15 It aimed to support the stability of the entire region through inclusive dialogue and increased economic cooperation. The Indo-Pacific Concept was included in ASEAN’s external relations strategy on Indonesia’s initiative at the June 2019 ASEAN Summit. The document declares strong commitment to multilateralism, the aim of further strengthening international organisations and enforcing international law. The Concept also sees unilateral and deliberate violations of international law as a threat to global stability. It also reflects Indonesia’s non-permanent membership goals in the UN Security Council, namely: (1) safeguarding stability through peaceful conflict resolution, (2) strengthening cooperation between the UN and ASEAN, (3) combating terrorism, (4) achieving sustainable development goals.

Table 1: The top 20 countries employing Indonesian migrant workers, 2011–2014 (in person)

Malaysia Taiwan (if considered separate) Saudi Arabia Hong Kong Singapore United Arab Emirates Oman South Korea Brunei United States Qatar Bahrain Japan Kuwait Turkey Italy China (without Taiwan) Fiji Islands Canada Spain * to 31 October

2011

134,120 78,865 137,835 50,301 47,786 39,917 7,306 11,392 10,804 13,749 16,616 4,379 2,508 2,723 1,016 3,408 1,072 556 –1,484

2012

134,023 81,071 40,655 45,478 41,556 35,571 8,836 13,593 13,146 15,353 20,380 6,328 3,293 2,518 1,209 3,691 1,967 970 –1,746

2013

150,236 83,544 45,394 41,769 34,655 44,505 10,719 15,374 11,269 15,021 16,237 5,384 3,042 2,534 1,518 3,746 2,055 848 –1,417

2014*

107,085 68,874 38,104 30,208 25,601 15,276 15,035 9,623 9,298 7,839 6,872 4,535 2,093 1,530 1,155 1,075 812 809 805 754

Through the Indo-Pacific Concept, Indonesia has been widening its geostrategic outlook from the Asia-Pacific to the Indo-Pacific in line with President Joko Widodo’s intent to turn the country into a Global Maritime Fulcrum.16 The growing rivalry between the US and China and the emergence of other Indo-Pacific initiatives from different nations strengthened Indonesia’s view that ASEAN must try to maintain its centrality. As a result, the draft of perspective for an ASEAN Outlook on the Indo-Pacific was handed over for consideration, and, after eighteen months of intensive lobbying by Indonesia, the Concept was finally adopted at the ASEAN Summit in June 2019. The ASEAN Outlook promotes the principles of openness, inclusiveness, transparency, respect for international law, and ASEAN’s centrality in the Indo-Pacific region. The Concept proposes a systematic approach and builds on the existing regional initiatives in which the ASEAN-led mechanisms will act as a central power for further cooperation. The Concept is not changing the existing regional architecture and the EAS is the proposed platform for advancing the Indo-Pacific cooperation. Indonesia’s ASEAN Outlook on the Indo-Pacific further underlines the importance that Indonesia attaches to ASEAN as the cornerstone of its foreign policy, emphasising ASEAN’s centrality in managing ties with the major powers in the Indo-Pacific region.

The Concept focusses, among others, on three areas of cooperation—maritime security, connectivity, and sustainable development—as suitable tools for gaining international recognition for Indonesia as a significant regional power alongside other extraregional powers like the United States, China, Japan, and India. From a regional point of view, drafting the Indo-Pacific Concept was a signal from Jakarta that it was ready to lead ASEAN again, especially after five

years of lower-profile involvement in regional affairs, compared to President Susilo Bambang Yudhoyono’s government before 2014.

The adoption of the ASEAN strategy is particularly noteworthy because it has succeeded in creating a document that is partly an alternative to the FOIP (Free and Open Indo-Pacific, FOIP), represented by the US and its partners,17 and, at the same time, one China appears to be able to live with (otherwise China-friendly ASEAN members would have vetoed it). The new ASEAN Indo-Pacific Strategy is in line with the alliance’s geostrategic priority, and the organisation was able to articulate its position while avoiding the trap of compulsion to choose between the US and China. The main characteristic feature of the ASEAN strategy is that, instead of rivalry, it emphasises cooperation and opening up opportunities out of the emerging challenges and stresses, focussing on economic cooperation instead of security aspects. Based on the Concept, ASEAN seeks to act as a mediator between the two superpowers and sees China as a partner. The US, India, Japan, and Australia support this interpretation of ASEAN’s role because the ASEAN Concept reflects the key principles of the FOIP strategies and rejects the unilateral enforcement of Chinese territorial needs in the South China Sea. Therefore, the organisation did not take a purely middle ground, but a position closer to that of the United States.

THE ECONOMIC DIPLOMACY OF ASEAN AND INDONESIA

Due to the uncertainties and transformations in the world economy (global economic recession, US–China trade war, and, recently, the consequences of the COVID-19 pandemic), enforcing economic interests is gaining more weight in ASEAN’s foreign relations and Indonesian foreign policy. ASEAN has sought to intensify its system of foreign economic relations in recent years while maintaining traditional relations (Free Trade Agreements with China, India, Japan, South Korea, Australia, and New Zealand).18

Similarly to other ASEAN members, Indonesia’s main—actually, the number-one foreign trade and the third-largest investment— partner is China, with which it has maintained a strategic partnership since 2013. As China is also the number-one source of infrastructure development projects that are critical to some ASEAN members including Indonesia, the government participates in the Belt and Road Initiative which would build a regional economic corridor involving maritime, road, rail, and water projects across Indonesia. The Indonesian government proposed projects worth USD 91 billion19 to Beijing last year.

During the Obama administration, mutual interest between the US and ASEAN countries grew. On 21 November 2015, at the third ASEAN–US Summit, the parties announced a strategic partnership for a peaceful, prosperous AsiaPacific region.20 ASEAN, and, thus, Indonesia, is important to the US because of its economic and political significance, large population, growing purchasing power, and, last but not least, because of the Association’s geostrategic location. There was a wait-and-see attitude on behalf of ASEAN when the Trump administration took office, as the new government’s isolation-based campaign promises have created uncertainty over the US foreign policy in Southeast Asia. Vice President Mike Pence visited Jakarta in April 2017, during which he assured President Widodo that his country would continue to see ASEAN and Indonesia as a strategic partner in both the security policy architecture of the Southeast Asian region and the fight against terrorism. In the trade war between the US and China in 2019, similarly to other ASEAN members, Indonesia is not taking a stand between its two major partners—rather it tries to maintain its foreign economic positions by adapting to the situation.

The economic dimension of the relationship with Japan remains important for ASEAN. For example, after signing the Economic Partnership Agreement in 2008, Japan consolidated itself as a key trade and investment partner for Indonesia. Japan and China are competing to dominate the Southeast Asian market, either as an investor or as a foreign trade partner.

For a long time, ASEAN has been considering the EU as an important source of investment and

a trading partner. In November 2009, Indonesia was the first country to have signed the PCA with the EU from the ASEAN region. Indonesia remains committed to establishing a Comprehensive Economic Partnership Agreement with the EU, but organisational and coordination barriers and, recently, the palm oil issue make it difficult to move forward. The palm oil issue (mainly arising between Malaysia and Indonesia) also hinders the EU–ASEAN negotiations on a strategic partnership from being concluded.

WHAT DOES THE FUTURE HOLD FOR ASEAN?

ASEAN will seek to continue its efforts to build cooperation in Southeast Asia and the IndoPacific region, expanding political, economic, and technological ties. In this process, ASEAN will be used as a central power to the fullest extent possible. In Indonesian foreign policy, the Indo-Pacific region is the present and future engine of sustainable global growth. Therefore, the collaborative Strategic Outlook can boost higher economic growth. ASEAN hopes that stability, dialogue, collaboration, and respect for international law will be upheld in the region. According to ASEAN, power rivalry should be converted into cooperation. ASEAN must continue to come up with innovations to step away from its comfort zone and stay relevant in responding to future challenges.

ENDNOTES

1

Prashanth Parameswaran: Assessing Southeast Asia in the 2010s: 5 Big Strategic Trends and How They May Shape the 2020s. The Diplomat. 1 January 2020. <https://bit.ly/2ybKRGX >

2

Investing in ASEAN, 2019/2020. Association of East Asian Nations. October 2019. <https://bit.ly/2X6jE0V >

3

Raoul Oberman [et al.]: The archipelago economy: Unleashing Indonesia’s potential. McKinsey & Company. 1 September 2012. <https://mck.co/2AGGkNB >

4

Indonesia’s bargaining position on ASEAN, G20 forums. ANTARA News. 6 July 2019. <https://bit.ly/3ga97us >

5

United Nations Cooperation with South-East Asian Nations Association Vital for Fight against Climate Change, Terrorism, Organizations’ Chiefs Tells Security Council. United Nations. 30 January 2020. <https://bit.ly/2WO5ySY >

Asean Security Community Plan of Action. Assotiation of Southeast Asian Nations. Feburary 2015. <https://bit. ly/36nymET >

7

Indonesia rejects China’s claims over South China Sea. Reuters. 1 January 2020. <https://reut.rs/2WQPPmc >

8

Sarah Teo: Strengthening the ASEAN-centric multilateral security architecture. 7 January 2020. East Asia Forum. <https:// bit.ly/2zlpio3 >

9

Graeme Hugo–George Tan–Caven Jonathan Napitupulu: Indonesia as a Transit Country in Irregular Migration to Australia. Australian Government, Department of Immigration and Border Protection, Irregular Migration Research Programme, Occasional Paper Series. 2014/September. <https://bit.ly/3nePdkz > 10 Pernyataan Pers Tahunan Menteri Luar Negeri RI Tahun 2020. Kementerian Luar Negeri Republik Indonesia. 8 January 2020. <https://bit.ly/3g8haYx > 11 Dian Septiari: Indonesia offers to host new Indo-Pacific forum. The Jakarta Post. 31 October 2019. <https://bit.ly/2zZTwg5 > 12 Adrian Wail Akhlas: COVID-19 to slash Indonesia’s growth to 2.1% as millions may slip into poverty: World Bank. The Jakarta Post. 31 March 2020. <https://bit.ly/2zThWYX > 13 Dr Natasha Hamilton-Hart–Dr Dave McRae: Indonesia: Balancing the United States and China, Aiming for Independence. The United States Studies Centre at the University of Sydney. November 2015. <https://bit.ly/3bSNifg > 14 Indonesia makes largest-ever deployment of troops, equipment to South China Sea island. Janes. 6 January 2020. <https://bit.ly/2WQ6o1t > 15 “ASEAN Outlook on the Indo-Pacific.” Association of Southeast Asian Nations. 22 June 2019. <https://bit. ly/3eac8Jp > 16 Rendi A. Witular: Jokowi launches maritime doctrine to the world. The Jakarta Post. 13 November 2014. <https://bit. ly/2ZB6oo3 > 17 A Free and Open Indo-Pacific. Advancing a Shared Vision. U.S. Department of State. 4 November 2019. <https://bit. ly/2z9U5Ep > 18 Free Trade Agreements with Dialogue Partners. Association of Southeast Asian Nations. <https://bit.ly/3e9Vz0e > 19 Indonesia to propose projects worth US$91 billion for China’s Belt and Road. The Straits Times. 20 March 2019. <https://bit. ly/2zYUlFY > 20 Joint Statement on the ASEAN-U.S. Strategic Partnership. The White House, President Barack Obama. 21 November 2015. <https://bit.ly/2WNB8jA >