“Geopolitical unrest opens up a space for middle powers like Australia and Indonesia”

The Australia-Indonesia Centre, in partnership with PwC and Perth USAsia Centre, hosted a boardroom dialogue with Dr Dino Patti Djalal, Indonesia’s former deputy foreign minister and Ambassador to the United States, at PwC Melbourne on January 24th.

Dr Djalal, who also founded the Foreign Policy Community of Indonesia, shared his insights with moderator AIC Digital Economy Fellow Helen Brown and a group of senior business and government leaders in Australia on a wide range of issues, including Indonesia’s economic growth, its role in ASEAN, and its complex relationship with China.

Key points

Bilateral relations & middle power diplomacy

  • The improved bilateral relations can be attributed to the strengthening of people-to-people links enabled by New Colombo Plan, Australia’s most visible public diplomacy effort in Indonesia.
  • The world is experiencing a “geopolitical depression” in the relationship between major powers. This creates a space for middle powers like Indonesia and Australia to play a more significant role.
  • Both nations can leverage their increased influence as middle powers and improved bilateral relations to work together in the region, as they have previously in APEC and in the Cambodia conflicts.

China’s role & ASEAN

  • Indonesia is playing a balancing act with China. Even as it’s actively courting trade, investment, and tourists from China, Indonesia has also responded assertively to China’s claims in the South China Sea.
  • Following significant delays to a key strategic infrastructure project awarded to China, the Jakarta-Bandung high speed train, due to land acquisition issues, Indonesia is treating Chinese investment with increased caution. Indonesia has also limited investment from China’s One Belt One Road initiative to non-critical infrastructure projects in North Sulawesi and North Kalimantan.
  • Dr Djalal cited a research finding by Perth USAsia Centre that shows that China is seen as having the most influence in Asia (overtaking the US), but isn’t necessarily liked. The research result is also reflected by The Australia-Indonesia Centre’s Perceptions Report, which has found that both Indonesians and Australians identify China as the most important country for their future.
  • Now that that the ASEAN economic community is underway, ASEAN needs a new vision, and Indonesia holds the key to where ASEAN is heading over the next few years. Indonesia is well positioned to act as a stabilising power which has the capacity to promote a stronger and better architecture for the region.

Partnerships Coordinator
The Australia-Indonesia Centre

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