United States Should Focus on Building an Enduring Relationship With Indonesia

COMMENTARY Global Politics

United States Should Focus on Building an Enduring Relationship With Indonesia

Mar 9th, 2010 5 min read
Walter Lohman

Director, Asian Studies Center

As Director of The Heritage Foundation’s Asian Studies Center, Walter Lohman oversees the think tank’s oldest research center.
On his trip to Indonesia this month, US President Barack Obama has the opportunity to position the United States and Indonesia for an entirely new partnership. To do that, the administration must keep the relationship in perspective, not burden it with more than it can bear, and focus on the big picture.

It is important to note that, in terms of US partners in Asia, Japan, South Korea and China all figure more highly than Indonesia. Indonesia is simply not on the same priority list. It may one day assume a spot at the level of Australia, the Philippines and Thailand, but it is not there now.

Still, the United States has a compelling interest in trying to forge a closer relationship with Indonesia. Indonesia is by far the largest country in Southeast Asia by geography, population and economy. It is situated at the southern entry points to the strategically and economically vital South China Sea. It is the indispensable participant in Southeast Asian regional diplomacy. It is a thriving democracy with strong constitutional underpinnings -- the freest country in Southeast Asia. It is the world’s largest Muslim-majority nation and has a tradition of constitutionalism and pluralism that well complements American global interest in freedom. Indonesia is also a critical partner in the global war on terrorism.

To fully realize American interests, the Obama team should advance the relationship slowly, keep expectations low and focus on broad areas of common interests, such as counterterrorism and counter-extremism, economic freedom, the geopolitical shape of the Asia Pacific, democracy promotion and the efficacy of the Association of Southeast Asian Nations. Certainly, presidential-level issues like these will not be fully formed by the time of Obama’s visit, or soon thereafter. They can be spotlighted, however, and given a presidential stamp of approval. Small, concrete “deliverables” are useful, but it is more important to have the president’s stamp on big ideas.

American and Indonesian priorities intersect most closely in the area of counterterrorism. First, Americans have been among those killed and injured in terrorist attacks in Indonesia and could be in the future. Second, the terrorists have regional connections and aspirations. A major plot uncovered in Singapore in 2001, not in Indonesia, first brought terrorist group Jemaah Islamiyah to international attention. The United States cannot allow these groups to flourish in one isolated corner of Southeast Asia, because that corner may have the potential to cause destruction and death thousands of miles away.

Third, the United States has an interest in Indonesian stability: Indonesia’s successful democracy is an example of Asian democracy as well as of the compatibility of liberal democracy and Muslim-majority polities. Indonesia’s political stability is also important to its role as keeper of the Malacca, Sunda and Lombok Straits, through which more than half the world’s annual merchant fleet tonnage passes.

The Rise of China

The most serious geopolitical challenge facing the East Asia and Pacific region is the rise of China. China’s massive economic growth, rapid military modernization and weighty presence in the diplomatic world are things that both the United States and Indonesia must take into account in their foreign policies. The two nations, however, approach the China challenge from vastly different angles.

The US perspective is one of a superpower with 60 years experience as the guarantor of peace and stability in the Asia-Pacific region. America is a global power with global interests at stake in its relationship with China. The US-China relationship, economically one of the world’s most important, is marked by both competition and cooperation. Over the past decade, a rough consensus has developed in Washington around a “hedging strategy,” preparing for negative outcomes associated with China’s rise, for example, great power rivalry and conflict, while engaging China in ways that promote peace, freedom, prosperity and security.

Indonesia’s perspective is first and foremost that of a developing country emerging from the political, social and economic turmoil that ensued after the fall of Suharto in 1998. A developing country’s economic priorities are often short term and sometimes acute. Indonesia does not presume anything approaching the international responsibilities of the United States -- presumptions that might cause it to conflict with larger Chinese interests. Indonesia is separated from a direct Chinese threat by miles of sea. As a result, China represents far more economic opportunity to Indonesia than a geopolitical threat.


T he United States and Indonesia share an interest in an effective, integrated, independent, outward-looking Asean. Asean has played an indispensable role in facilitating peace and dialogue on security issues that are in the interest of both countries. This historic purpose remains Asean’s principal contribution to the Asia-Pacific region.

For Indonesians, an effective Asean provides opportunity to compete and build integrated supply chains and new markets for their products. An integrated Asean is also a more attractive destination for American investment and exports. US assistance to, and consistent engagement with, Asean is in Indonesia’s interest. Indonesia’s leadership in Asean may be in America’s interest in a way it has never been previously.

trade and Investment Ties

The basic fact of the US-Indonesia economic relationship is that the United States exports approximately $6 billion in goods to Indonesia, making it America’s 37th-largest market; and imports approximately $16 billion in goods from Indonesia. Indonesia exports twice as much to Japan as it does to the United States and China. US private investment in Indonesia is about $17 billion -- of $153 billion in total US investment in Southeast Asia. Needless to say, a relationship between the third-largest and fourth-largest countries in the world should generate more economic activity. More economic activity could ultimately help form the basis for real partnership.

What Obama Should Do

The administration must keep its eye on the geopolitical ball. Obama’s immediate priority should be to establish a framework that commits the United States and Indonesia publicly to developing the relationship. The administration should maintain a priority focus on counterterrorism cooperation. Today, that cooperation is robust.

Cooperation on regional promotion of democracy, particularly in Burma, should be a critical part of the new US-Indonesian Strategic Dialogue established by the Obama State Department and should include representation from Indonesia’s House of Representatives. This initiative is a useful complement to the ongoing US-Indonesia security dialogue. Indonesia’s profession of a values-based foreign policy is an excellent opportunity to achieve mutual objectives beyond traditional security concerns.

The administration and Congress should support counter-extremism programs in Indonesia. By building and strengthening liberty-minded Muslim networks, media and school curriculums, organizations like the LibForAll Foundation are working actively to attack Islamism at its ideological roots.

The US-Indonesia partnership should address barriers to trade and investment with a focus on priority market access issues. Beyond the benefit to the investor or exporter, resolutions of such issues will send signals beyond the specific sector concerned and affect broader perceptions of the business climate. A US-Indonesia Bilateral Investment Treaty should be negotiated to provide access, consistency and transparency for American investors and to improve Indonesia’s attractiveness as an investment destination.

The US Agency for International Development should continue its main focus on education. According to USAID, its Indonesia education Initiative to improve the quality of education in Indonesia has reached more than 346,000 students and almost 24,000 administrators and teachers from more than 1,470 schools. The key elements of that $157 million program, announced in 2003, expire this year. They should be continued. Providing a quality education is vital for preparing Indonesia’s workforce to meet the demands of a modern economy -- essential to the country’s development and political stability -- and is a way of countering radicalization in Islamic boarding schools.

The United States and Indonesia are poised for a much closer relationship. Obama’s overarching goal for US-Indonesia relations should be to leave to his successor a relationship that is an enduring fixture in America’s network of Asian alliances. He can best do that treading carefully and deliberately, staying focused on big-picture priorities.

Walter Lohman is director of the Asian Studies Center at The Heritage Foundation.

First appeared in the Jakarta Globe