Indonesia-Australia set to become brothers in arms

Indonesia and Australia finalized a new defense cooperation treaty on August 20, a potential game-changing pact depending on its still-unreleased details.

But with US-China relations at a steady simmer and Indonesia’s Defense Minister Prabowo Subianto due to assume the nation’s presidency in October, many will read the final text closely for any signs of a shift in strategic positioning of the two key regional powers.

The full details of the pact and its significance will only become clear next week when Richard Marles, Australia’s deputy prime minister and defense minister, travels to Indonesia for the official signing. However, Marles has already struck a triumphalist note, hailing the treaty as the “most significant agreement that our two countries have ever made.”

Marles indicated the treaty will make it easier for the Indonesian and Australian militaries to operate in each other’s countries as well as cooperate to support the “rules-based order”, increase the number of joint exercises, and improve interoperability.

“While, this is not an alliance as such […] This is very much both countries saying to each other that we see our respective security as being embedded in each other,” Marles said.

Indonesia, however, seems more cautious about the agreement’s implications. Prabowo hailed the treaty as a big win for both countries but was also careful to emphasize this agreement would not compromise Indonesia’s traditional neutrality.  

“As you know we are, by tradition, non-aligned. By tradition our people do not want us to be involved in any geopolitical or military alliances or groupings,” Prabowo said speaking to the media at a press conference with Australia’s Prime Minister Anthony Albanese. He framed the agreement as part of Indonesia’s desire to be a “good neighbor” to all.

“We shouldn’t believe that this is any sign that Indonesia is somehow getting off the fence in terms of aligning with the West again China,” says Sam Roggeveen, director of the Lowy Institute’s International Security Program and a longstanding advocate of tighter security ties between Australia and Indonesia.

As such, analysts have cautioned about taking Australia’s enthusiastic statements too literally. “Australia often talks up agreements with Indonesia and I suspect this case is no different, even if the agreement has treaty status,” says Euan Graham, a senior analyst with the Australian Strategic Policy Institute (ASPI).

“My sense is that Prabowo doesn’t share Australia’s view that bilateral defense cooperation with Australia is about upholding regional order. Rather, he sees relations through a neighbor-to-neighbor lens,” Graham said.

Australia and Indonesia have signed major security treaties in the past. The 1995 Suharto-Keating Pact, put together by Indonesian president Suharto and Australian prime minister Paul Keating, committed the two countries to something that neared a defensive alliance but stopped just short in deference to Indonesia’s longstanding principle of non-alignment.

Since then, however, the relationship has been complicated. Australia’s intervention in East Timor in 1999 saw the Suharto-Keating pact abandoned. And while the 2006 Lombok Treaty rebuilt relations by laying out plans for security cooperation in a wide range of areas, there have also been considerable frictions, most recently over AUKUS and the Quad, which Indonesia worries could raise tensions in the region.

With Prabowo’s election, Australia seems to see an opportunity to strengthen relations with Indonesia. Marles was in Jakarta just days after Prabowo’s election to offer his congratulations and kick off negotiations.

Prabowo himself has in the past taken a more relaxed attitude than many other Indonesian policymakers toward controversial Australian foreign policy decisions like committing to AUKUS and moving its embassy in Israel to Jerusalem. And Prabowo’s military background and muscular nationalism make him well-disposed toward defense diplomacy.

The fast rise of China has provided Australia with a strong incentive to bolster defense ties with Indonesia. Australian policymakers have often seen closer security ties with Indonesia as an effective counterbalance to growing Chinese influence in Asia – particularly among those who doubt America’s long-term reliability as a security partner.

“The great promise of an Australia-Indonesia agreement is that they share one key strategic objective,” says Roggeveen. “Which is that neither country wants to see maritime Southeast Asia dominated by China.”  Still, he expects Indonesia will continue to take a line independent of the West on the issue.

Indeed, Indonesian experts warn that Prabowo will likely be wary of anything that could hurt relations with China. “Joint patrols in the South China Sea would be something people consider very dangerous,” said Yohanes Sulaiman, associate professor in international relations at Universitas Jenderal Achmad Yani.

The Chinese reaction to joint US-Philippines patrols in the South China Sea is a warning Jakarta will likely heed, given its reliance on China for investment in key sectors and its limited ability to patrol Indonesia’s huge territorial waters.

Equally, Prabowo’s first overseas visit following his election was to China – balanced by subsequent trips to Japan and Malaysia. And Indonesia has recently agreed to revive long-mothballed joint military exercises with China.

One should also not underestimate lingering suspicions about Australian intentions among Indonesia’s political elite. Many still remember bitterly Australia’s intervention in Timor as well as more recent revelations Australia had spied on Indonesian leaders. Whatever Prabowo’s opinion on AUKUS, it will continue to raise the hackles of many security and foreign policy elites in Jakarta.

Still, the new defense agreement is an undeniable win for Indonesia-Australia relations and may contain within it the seeds of greater convergence. Ian Montratama, a lecturer at Pertamina University, flagged Marles’ statements at improving interoperability between the Australian and Indonesian militaries as potentially significant.

Under Suharto, Indonesia procured the lion’s share of its equipment from the United States, cementing their unofficial strategic alignment.

However, post-Suharto and post-Cold War Indonesia has tended to spread weapon procurement out by purchasing systems from the US and its allies, Russia and China alike – with the issue that it is then often difficult to get these varied systems to work together.

Improving interoperability with Australia would imply a pivot toward Western military suppliers for defense procurement. If this does occur, it would not leave Indonesia aligned with the West but it would certainly mean a tightening of ties and a growing dependency in matters of defense.