Indonesia Steps onto the World Stage

Last week in the snowy Swiss enclave of Davos, President Susilio Bambang Yudhoyono of Indonesia threw down the rhetorical gauntlet and announced Indonesia’s plans to be a global player. Addressing a well-heeled World Economic Forum audience, he asserted Indonesia’s intent to influence global trends: “Asia is of course more than China, Japan, and India,” he said.

Mr. Yudhoyono has a good case to make. Indonesia is the world’s fourth-largest country and third-largest democracy. By most criteria, Indonesia has a stronger claim on BRIC membership—the group including Brazil, Russia, India, and China—than Russia. It is a member of the G-20 and a massive presence in other global fora such as the Organization of the Islamic Conference (OIC) and the Non-Aligned Movement (NAM). Indonesia is the chair of the Association of Southeast Asian Nations (ASEAN) and the East Asia Summit (EAS) this year and will chair the Asia-Pacific Economic Cooperation (APEC) forum in 2013.

Indonesian influence could be an overwhelmingly positive input as the world defines new frameworks and architecture. The World Bank is restructuring the relative representation of countries, taking into account the new role of states like Indonesia, Brazil, China, and India; the United Nations is moving in the same direction. The EAS and the ASEAN Defense Ministers’ Meeting Plus represent ASEAN-based nascent regional security architecture. These changes are investments in enhancing global stability, peace, and prosperity.

However, to be effective globally, Indonesia must strengthen its institutions at home and provide real leadership in its immediate neighborhood—in ASEAN. Neither of these challenges has been fully met.

President Yudhoyono confidently hailed democracy, human rights, and eliminating corruption as key pillars for Indonesian influence. The truth is that Indonesia is generally moving in the right direction on these issues, but stronger leadership at home is needed to institutionalize and practically implement these fundamental Indonesian values. In terms of economic dynamism, Indonesia has an incredible opportunity to lead. But though it is ASEAN’s largest economy, it has not been a leader on trade, and it has a myriad of microeconomic challenges that limit its vast potential as a hub for foreign direct investors seeking an anchor venue in the 10-country, 620-million person, $1.8-trillion gross domestic Southeast Asian market.

Indonesia’s global impact will only be effective if it can lead within Southeast Asia. As the chair of ASEAN for 2011, Indonesia faces the challenge to build on the strong and proactive leadership of Vietnam in 2010. ASEAN’s viability depends on its effective progress in achieving its leaders’ goals of economic, political, and cultural integration by 2015. Specifically, ASEAN must advance economic integration by moving beyond tariff reductions in the ASEAN Free Trade Agreement (AFTA) to enforcing the reduction of nontariff barriers; implementing guidelines laid out in the ASEAN Investment Area (AIA) and liberalizing services and movement of people; and building regional infrastructure. Politically, ASEAN’s biggest challenge is encouraging Burma (Myanmar) to create political space. Doing so means changing the paradigm on the principle of “nonintervention” in other members’ internal affairs. No ASEAN member but Indonesia could appropriately champion the case for welcoming Timor Leste (East Timor). Finally, on cultural integration, Indonesia can lead by example as the region’s largest country and reach out to its neighbors. Recent trends indicate increasing nationalist sentiment among ASEAN countries, including Indonesia. Leadership is required to change the tone and direction toward a unified identity for the region.

The vision for global Indonesian influence that President Yudhoyono eloquently shared in Davos is most welcome and should be actively encouraged. However, strong leadership at home and in the ASEAN neighborhood is a necessary condition for realizing Indonesia’s broader goals.

Ernest Bower is a senior adviser and director of the Southeast Asia Program at the Center for Strategic and International Studies in Washington, D.C.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2011 by the Center for Strategic and International Studies. All rights reserved.


Ernest Z. Bower