Indonesia's quiet rise as an Asian superpower

Later this year, Chinese and Russian leaders Xi Jinping and Vladimir Putin are expected to attend the G20 summit on the resort island of Bali, Indonesia. Although they have pushed for the exclusion of Russia from the power grouping, leaders from major western nations are also set to attend the high-level meeting in November. By all accounts, Indonesia is determined to host the first face-to-face meeting between the leaders of China, Russia and the US since the Ukraine war began in February.

Since taking over the rotational presidency of the G20 grouping, Indonesia has underscored its commitment to play a proactive role in promoting global peace and stability. In late June, Indonesian President Joko Widodo, affectionately known as “Jokowi”, embarked on an unprecedented “peace mission” to Europe, where he met his counterparts in Kyiv and Moscow.

During his exchanges with Ukrainian President Volodymyr Zelenskyy, Jokowi promised to pass on his message to Mr Putin and, accordingly, expressed his commitment to help establish contact between the two leaders in order to ensure a move towards “a peace settlement and an open dialogue”. In Moscow, Jokowi reportedly secured “guarantees” on the safe passage of agricultural products “not only from Russia but also from Ukraine".

Jokowi’s “peace mission” to Europe received relatively scant attention in western media, especially since Indonesia’s mediation efforts have yet to produce a major breakthrough. But what’s clear is that the world’s largest Muslim-majority nation and third-largest democracy has steadily emerged as a global force in the 21st century. In the coming decades, the South-East Asian country is well-placed to claim its place of pride among rising Asian superpowers of China and India.

Spanning 4,700 kilometres from the Indian Ocean to the Western Pacific, Indonesia is the world’s largest archipelagic nation, with 17,000 islands. Yet, since its independence in the mid-20th century, Indonesia, home to 275 million people, has often struggled to attract global attention commensurate to its demographic size and geopolitical heft.

Former Indian prime minister Jawaharlal Nehru once described Indonesia, along with other South-East Asian countries, as “Coca-Cola governments”, because they were seen as too dependent on the West and often lacked both strategic autonomy and international influence to truly matter. Accordingly, Indonesia was placed in the lowly “Category C” of India’s foreign policy priorities.

Decades later, leading South-East Asia expert Donald Emmerson lamented Indonesia’s marginal position in America’s regional strategic priorities, arguing “the significance of a country and the attention it receives are separate matters". After all, much smaller nations such as Vietnam or Cambodia absorbed much of the West’s strategic focus throughout the twilight decades of the 20th century.

A former Dutch colony, Indonesia was also largely ignored by major European powers, which were more focused on Russia, China and former colonies in East Asia. Thanks to bitter Cold War-era rifts, China lacked even formal bilateral ties with Indonesia for more than two decades.

For its part, Indonesia remained largely focused on strengthening the Association of South-East Asian Nations, a regional body that aimed to prevent the domination of the region by any major power.

In recent years, however, Indonesia has rapidly transformed into an indispensable power in the Indo-Pacific. To begin with, it boasts a $1 trillion GDP, with a booming digital economy that has produced unicorns and world-class start-ups such as Gojek, a multi-service platform that could soon rival FinTech giants in China and the West.

Under Jokowi, Indonesia is also exploring a transformative national development programme, which includes the construction of a new capital city called Nusantara, with a price tag of $31 billion, as well as a shift to high value-added industries, including the establishment of a Tesla regional EV battery production hub. Its pursuit of a knowledge-based economy has gone hand-in-hand with a comprehensive rural development programme, which has significantly reduced poverty and enhanced productivity across Indonesia’s provinces.

To boost economic growth, Indonesia is also overseeing multi-billion-dollar public infrastructure projects, including the Jakarta-Bandung high-speed-rail project, in tandem with leading development partners such as China and Japan. Before the end of this century, the country is expected to become the fourth-largest economy in the world, just behind China, India and the US. And with growing economic power comes rapid military modernisation.

After winning his second term in office in the 2019 election, Jokowi has embarked on an ambitious programme to strengthen the country’s defensive capabilities. The Indonesian government has allocated up to $125bn to beef up the naval and air forces, including $22bn to acquire Rafale and F15 fighters from the West. The ultimate goal of this military build-up is to transform Indonesia into what Jokowi has described as a "global maritime fulcrum", namely an autonomous and consequential power at the heart of the Indo-Pacific.

Amid the intensifying Cold War in the mid-20th century, Mohammad Hatta, one of Indonesia’s founding fathers, vowed to pursue a foreign policy that “reserves the right to decide our own destiny and fight for our own goal, which is independence for the whole of Indonesia". He advocated for a dynamic, non-aligned strategic orientation akin “rowing between two reefs”.

Over the next half-a-century, Hatta’s successors have sought to follow in his footsteps with significant degrees of success. Unlike neighbouring states such as the Philippines, Indonesia has consistently shunned overt alliances with any major power in favour of enhancing its own strategic autonomy. To this end, Indonesia assiduously pursued a balanced relationship with rival superpowers, with co-operation and competition defined on a case-to-case basis without choosing sides.

Thanks to its "multi-vector" foreign policy, Indonesia has managed to maintain strong defence and strategic co-operation with the US, China, Russia and Japan throughout recent decades. Whenever threatened by one major power, Indonesia sought assistance from the other. This is particularly in the context of Indonesia’s maritime disputes with China in the so-called North Natuna Sea, the intersection of the southern tip of the South China Sea and waters off the coast of Natuna Islands.

While maintaining robust economic and strategic dialogue with Beijing, the Jokowi administration has welcomed Russian energy investments in the disputed areas as well as large-scale military drills with the US and Japan. For its part, Indonesia has also adopted an uncompromising stance and beefed up its military presence in the disputed areas.

In recent years, Indonesia has also emerged as a proactive mediator in international conflicts, assisting in the peace process negotiations from the Cambodia-Thailand border disputes to Palestine and Afghanistan to Mindanao and Myanmar. Jakarta's deft management of delicate relations with rival powers as well as growing profile as an international mediator is also a function of its superb diplomatic tradition.

Throughout the past decade, star Indonesian diplomats such as Marty Natalegawa, Dino Djalal, and Retno Marsudi have tirelessly advocated for an inclusive and stable regional order in the Indo-Pacific, while maintaining close personal relations with counterparts from major global powers. By all indications, Indonesia is steadily transforming from a seemingly marginal regional player into an indispensable force in Asian geopolitical affairs, thanks to its booming economy, modernising military and adept diplomacy. And over the next decades, it is well-poised to join the ranks of no less than emerging superpowers of the 21st century.