By Phillip Orchard

Australia put a long-running dispute with East Timor to rest last week when the pair signed a landmark maritime boundary agreement that will substantially boost Timorese control over oil and gas deposits in the Timor Sea. By doing so, however, Canberra may be reopening an old wound with its more important yet leery neighbor to the north, Indonesia. In response to the deal, Jakarta announced that it intends to revisit its own sea borders treaty with Australia that it reached in 1997 before East Timor seceded from Indonesia. The treaty was never ratified, partly because it failed to give equitable control over seabed resources in accordance with international maritime law. The Timor-Australia deal merely underscores the treaty’s disparities.

Still, the border dispute is bound to be an issue, even if it’s only a mild one, in a country as geographically fractured and as politically variegated as Indonesia, whose social, cultural and physical cleavages will prevent it from fully cooperating with outside powers, much as they have throughout Indonesian history. They are also why Indonesia will, at most, be an ambivalent player in the broader effort by the U.S. and its allies to forge a united front against Chinese expansion.

Reluctance and Location

Indonesia’s location makes it the linchpin of the Indo-Pacific. The country reluctantly sits at the center of the growing strategic competition over this region. It is situated amid vital global trade routes at the southern end of the South China Sea and the nexus of the Indian and Pacific oceans. Its resource-rich waters on the fringe of the South China Sea overlap narrowly with Chinese territorial claims. Indonesia is also home to the world’s fourth-largest population, including the largest Muslim population, as well to ample natural resources and a burgeoning consumer and manufacturing base. By 2050, it is estimated that Indonesia will have the world’s fourth-largest economy, according to PricewaterhouseCoopers. From end to end, it spans a distance equal to that between London and Tehran. All of this makes Indonesia something of a dormant geopolitical power — and one that the U.S. and allies like Australia would like to play a much greater role in their efforts to contain Chinese assertiveness.

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But, to date, Indonesia has rarely made its influence felt far outside its borders. In large part this is because modern Indonesia stretches the notion of a nation-state. The country is an archipelago that includes so many islands the government has never quite settled on an official count. Unsurprisingly, there has never been a singular ethnic, linguistic, cultural or religious identity.

There’s little geographic or historical logic to Indonesia’s current form, which seems perpetually on the brink of fraying around the edges. Java, the world’s most populous island and home to two-thirds of all Indonesians, dominates national politics and economics, but like the Japanese occupiers and Dutch colonists before them, the Javanese have never quite been able to dominate the entire nation. Independence movements on its fringes, from Aceh on the northern tip of Sumatra to West Papua more than 4,000 kilometers (2,500 miles) to the east, remain latent threats. In 1999, it lost East Timor altogether.

Indonesia’s geography also makes the country exceedingly difficult to pacify internally and defend from outside meddling. Distant islands that are home to ethnic hotspots are often rugged, underdeveloped and covered in jungle. With more than 50,000 kilometers of coastline, the country has no hope of sustaining a coast guard capable of fully policing such a vast area. It spends less than 1 percent of its GDP on its military, and spending on its navy pales in comparison to neighbors Singapore, Thailand and Vietnam. Weaving Indonesia’s disparate pieces into a cohesive, defensible nation-state is an interminable process.

Internal Chaos, Conflicting Policies

And so Indonesia is overwhelmingly preoccupied with its domestic affairs, either reluctant or wholly ill-suited to throw its weight around abroad. Its moves on the international stage are often influenced by domestic concerns. On the surface, for example, President Joko Widodo’s vision for turning Indonesia into a “Global Maritime Fulcrum” looks like an attempt to make the country an indispensable global shipping hub and invaluable strategic partner to powers keen to stabilize the turbulent regional waters. But the bulk of the resources earmarked for the plan are focused on boosting internal connectivity.

The more internally chaotic a country, the harder it is for its government to pursue a coherent strategy abroad. And with a politically ambitious military and a party system dominated by disparate fiefs with sharply divergent interests, Indonesia often has trouble speaking with one voice or coordinating its actions on foreign affairs. It’s not uncommon for the president, the military and various agencies to announce conflicting policies on important issues — or to act in ways seemingly intended to thwart each other’s intentions. This problem is illustrated by Indonesia’s frequent spats with Australia. Last year, for example, Indonesia’s then-military chief, who is believed to have political ambitions and links to hard-line Islamist groups that oppose Jokowi, as the president is colloquially called, caught the president off-guard when he unilaterally announced a full suspension of military cooperation with Australia over what he claimed, without much evidence, was tacit Australian support for separatists in West Papua. (The same general sparked a brief and contrived spat with the U.S. last fall.) As was the case here, such incidents are generally resolved relatively quickly, and the overall trend of bilateral military cooperation has been positive, but they demonstrate how nationalist and Islamist sentiment can routinely bleed into the foreign policy sphere.

Suspicion of outside powers isn’t entirely rooted in political opportunism. Indonesia’s internal fractures make the country exceedingly vulnerable to foreign interference — and often creates pretext for outside powers to interfere. This has been proven routinely throughout its history, beginning with Dutch, British and Portuguese colonialism but has continued since independence after the Japanese departed in 1945. In the late 1950s, the U.S. armed regional rebels fighting the fledgling central government and then backed the 1965 overthrow of leftist founding president Sukarno, supporting the purges that followed as strongman Gen. Suharto consolidated his rule. In the 1990s, the U.S. severed all military ties in response to Indonesia’s war in East Timor. Structural adjustments adopted at the behest of international institutions like the World Bank contributed to the beating Indonesia took in the 1997 Asian financial crisis, which led to the downfall of the Suharto regime and helped lay the groundwork for East Timor’s successful push for independence.

For its part, Australia was initially one of the few countries to support Indonesia’s 1975 annexation of East Timor, but Canberra changed course in 1999, compelling Indonesia to withdraw from a bilateral security pact. In 2006, ties were downgraded over Australia’s offer of asylum to West Papuan independence activists. When Australia was caught attempting to tap the phones of Indonesian President Susilo Bambang Yudhoyono and his wife in 2013, ties were frozen yet again.

Content to Be an Outsider

Fearful of the ability of outside adversaries to exploit its internal divides, Indonesia has generally been loath to get caught up in competitions among outside powers. Early in the Cold War, Indonesia spearheaded the nonaligned movement. (Ultimately, under Suharto, it sided more closely with the U.S., largely to keep domestic communist forces at bay.) Today, Jakarta is pursuing what it characterizes as “strategic equidistance” between China and the U.S. In geopolitical terms, we would say Indonesia fears becoming a shatterbelt — a country or region where the internal fractures are exploited by competing outside powers.

Consider its position on the disputes in the South China Sea. Indonesia will make a big show of sinking Chinese fishing boats caught poaching in its waters, and of fortifying its defenses around its oil-rich holdings in waters claimed by China around the Natuna Islands. But it has shown little interest in trying to influence the broader dispute over the South China Sea. It has done little to come to the aid of more vulnerable littoral states like Vietnam and the Philippines, nor has it tried hard to push for ASEAN solidarity against the Chinese. It has rebuffed U.S. and Australian offers to conduct joint patrols in the South China Sea. It’s wary of provoking any sort of Chinese retaliation. To whatever extent possible, Jakarta would like to keep the focus of its relationship with China on commodity exports and infrastructure investment. Otherwise, it wants to be left alone.

Similarly, Indonesia is eager to keep the U.S. at arm’s length. It needs U.S. support to combat terrorism and to bolster its maritime security capabilities. In 2015, the two countries elevated bilateral ties to the level of a strategic partnership, and following a visit by U.S. Secretary of Defense James Mattis in January, the U.S. finally lifted its 1990s-era ban on cooperation with Indonesian special operations forces. The U.S. recently completed delivery of 24 F-16s — the largest arms transfer between the two countries to date. But Jakarta is looking just as much to adversaries of the United States for these needs. Last month it completed a long-delayed deal for Russian fighter jets. And last week, a day after announcing that it would receive four drones from the U.S., it struck a nearly identical deal with China.

Indonesia is certainly concerned about China’s rise. And it may not be able to remain on the sidelines of regional disputes indefinitely. Despite its best efforts, it has never been able to fully extricate itself from the bigger issues unfolding around it — and it will be harder to do so as its economic and military growth inevitably expands Indonesia’s influence. But to Jakarta, the latent threat posed by China isn’t particularly that much worse than the one posed by Australia and its allies. Indonesia will do everything it can to avoid picking a side.

Phillip Orchard
Phillip Orchard is an analyst at Geopolitical Futures. Prior to joining the company, Mr. Orchard spent nearly six years at Stratfor, working as an editor and writing about East Asian geopolitics. He’s spent more than six years abroad, primarily in Southeast Asia and Latin America, where he’s had formative, immersive experiences with the problems arising from mass political upheaval, civil conflict and human migration. Mr. Orchard holds a master’s degree in Security, Law and Diplomacy from the Lyndon B. Johnson School of Public Affairs, where he focused on energy and national security, Chinese foreign policy, intelligence analysis, and institutional pathologies. He also earned a bachelor’s degree in journalism from the University of Texas. He speaks Spanish and some Thai and Lao.