The Permanent Puzzle of Indonesia in Australia’s Foreign Policy

The permanent puzzle of Australia’s international relations is its relationship with Indonesia. As a neighboring country of 280 million people, dominating much of Australia’s northern approaches, and an emerging great power, there is arguably no more important relationship to Canberra than the one with Jakarta. Yet the relationship remains vastly under-realized. Diplomacy is cordial, but economic and cultural exchange is minimal, and defense cooperation remains nascent.

Over the past decade Australian prime ministers have signaled their belief in the importance of the relationship by making their first bilateral international trip to Jakarta. Following his predecessors, Anthony Albanese did so when the Labor Party was elected in 2022, and he did so again following the party’s victory in the early May election.

There was not much to actually announce during Albanese’s meeting with Indonesian President Prabowo Subianto. The visit was mostly about symbolism. There was a joint parade in a golf cart, and the exchange of personalized gifts, as well as some aspirational and feel good quotes from both leaders. This was all important for relationship building, of course, but how this can be advanced to practical cooperation remains a problem.

Australia has long understood the strategic significance of its relationship with Indonesia. In the early 1990s, then-Prime Minister Paul Keating stated that there was no more important relationship to Australia than Indonesia. This is because most of Australia’s security problems can be solved through close cooperation with Indonesia. With no threats from the south, east, or west, Indonesia serves as the bulwark that can protect Australia’s northern approaches. An intimate security partnership is therefore a national imperative.

Last year, the two countries started to move toward this objective with the signing of the Australia-Indonesia Defense Cooperation Agreement. The agreement enhances practical cooperation between the two countries’ defense forces including: more joint activities and exercises; the ability to operate from each other’s countries for mutually determined cooperative activities; greater exchange of personnel for education and training; and greater technical cooperation on security technology.

This is important, but it still doesn’t get to the core of what Australia needs. For security cooperation to be robust it needs to be built upon a platform of economic interests and cultural affinity. It is here that Australia seems to be stuck.

Despite signing a free trade agreement in 2019, the economic relationship between the two countries remains relatively small. Indonesia is hungry for foreign investment to provide opportunities for its large population, but Australia isn’t even in the top 20 foreign investors in Indonesia. Alongside this, the massive market Indonesia offers for Australian exporters has never been capitalized on. As much as the Australian government has encouraged this to flourish through its Southeast Asian Economic Strategy 2040, very few businesses make the effort to explore opportunities in Indonesia.

A significant part of the problem is cultural comfort. Arguably no two neighbors are as culturally distinct as Australia and Indonesia. Customs, habits, and religious beliefs are all highly distinct. This makes the barrier to entry for cultural affiliation very high, and it makes a relationship like those between neighboring European countries difficult to achieve. This may very well be a permanent impediment.

However, there are things that the Australian government can be doing to bridge the divide.

The greatest strategic investment the Australian government could make is in compulsory Indonesian language classes from primary school through to the completion of secondary school. Australia has always put this in the “too hard” basket, or exhibited both the arrogance and laziness of expecting to engage with its neighbors in English.

Breaking this thinking is an imperative for Australia. Not only would this create greater ease of operation within Indonesia for a range of groups like business people, scientists, defense personnel, but it is primarily a sign of respect. It demonstrates that Australia is willing to make an effort to understand and engage genuinely with its neighbor.

It also would acknowledge a blunt reality. It may be difficult for Australia to stomach, but there must be the recognition that Australia is the junior partner in the relationship between the two countries, even if there is a discrepancy in wealth at the moment. This reality will become even more pronounced as Indonesia is projected to be the fourth largest economy in the world by 2050. Australia needs to make a concentrated effort to build cultural knowledge and habits of cooperation now, before a future Indonesian president considers themselves too busy to take a visit from a newly elected Australian prime minister.