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Indonesia’s foreign policy takes an economic turn

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In Brief

Since President Joko Widodo (Jokowi) took office, he has been clear and consistent in explaining his foreign policy priorities, enunciating the principle of putting ‘national interest’ first. Putting national interest first is to be expected in a leader’s foreign policy. What has been notable is the way that Jokowi has defined ‘national interest’.


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Put simply, Indonesia’s policy has shifted from one based on values to one based on economics.

The changed approach was signalled in Jokowi’s first speech on foreign affairs, at the Association of Southeast Asian Nations (ASEAN) summit in November 2014. While agreeing on ASEAN’s importance, he emphasised that ‘We have to make sure the national interest cannot be lost’. He restated the principle before visiting Singapore in July 2015, saying that ‘national interests are the motivation for cooperation with other countries’.

This is a significant policy shift compared to his predecessor, former president Susilo Bambang Yudhoyono (known as SBY). Indonesia’s strategy under SBY was to raise its international status by upholding values such as human rights and democracy, and by playing an active part in global governance through institutions like the United Nations (UN). ASEAN was seen as a means of achieving greater leverage for Indonesia’s diplomacy. The economic aspect of national interest was very weak in 2005.

In 2004–2005, when SBY began his first term, the Bush administration’s war against terrorism was at its height. The Bali bombings and Jemaah Islamiah’s activities showed that Indonesia also had a security problem. With security concerns dominating international politics, preventing foreign political or military intervention was at the top of Indonesia’s diplomatic agenda. Its strategy was to emphasise that it was not a country of extremists, but a nation of moderate and modern Muslims, and a successful democracy.

This was also why SBY projected its image in terms of values rather than the economy. In contrast, Jokowi came to office during a major economic power shift. He had to project an image of Indonesia as a careful economic player that would not easily fall behind.

Three elements stand out when we examine the new foreign policy.

First is the Indonesian people’s frustration in the final years of the SBY administration. Unfortunately, towards the end of his presidency, SBY’s ‘million friends and zero enemies’ policy sounded more like an excuse to avoid taking responsibility to advance domestic demands than anything else.

Jokowi and his team were aware of these frustrations. It appeared that the new president’s plan to overcome the shortcomings of his predecessor’s platform was to share the diplomatic dividend with the people. The easiest way to do that would be by sharing the economic benefits of trade, investment and employment.

The limitations of value-based or ‘democracy’ diplomacy has been the second key factor in changing foreign policy. One milestone of SBY’s diplomacy was establishing the ASEAN Charter. This not only institutionalised the association and raised its credibility but, with strong impetus from Indonesia, ASEAN also embraced the idea of shared political values: human rights and democracy. Winning agreement from the politically diverse membership was a significant achievement.

Shared-value diplomacy also had a strategic purpose, for it was designed to create greater international leverage both by enhancing ASEAN’s strategic value and increasing Indonesia’s global status as the de facto leader.

But the limits of value-based diplomacy became clear after the coup in Thailand in May 2014, after the ASEAN charter had taken effect. As the charter prohibits the acquisition of power by extra-constitutional means, the coup violated its principles.

SBY and then foreign minister Marty Natalegawa demanded that Myanmar, the 2014 ASEAN chair, issue a statement criticising or expressing serious regret about the events in Thailand. But unsurprisingly, Myanmar was quick to acknowledge the Thai junta and the importance of the military’s need to intervene at certain times. Cambodia followed suit, acknowledging the junta because it was endorsed by the monarchy, the common source of legitimacy between the two countries.

Failure to condemn the Thai coup weakened the charter and Indonesia’s diplomatic influence in creating it. It showed the limits of what Indonesia, despite being the group’s de-facto leader, could hope to achieve through its diplomacy in ASEAN and through value-based diplomacy.

Third, the shift towards a greater economic focus fits within the current administration’s broader views on global dynamics and a shift in economic power to the East. As Jokowi’s perception of the regional and global order is fundamentally anchored in economics, it was natural for him to see Indonesia’s national interest in the same terms. The aim is to ensure that Indonesia’s economy is in the winner’s circle as global dynamics change. Looking forward, there is no hint that Jokowi’s foreign policy and its economic focus will change.

Optimists and pessimists alike will agree that this focus is good for Indonesia’s prospects. Optimists consider that, with Indonesia’s demographic bonus, there is great potential for it to be the next Asian growth engine. Emphasis on economic national interest will therefore promise a gain in Indonesia’s global political power. Pessimists will see Asia’s growth slowing and protectionism setting in. In this scenario, the government would gain credit for seeking to secure Indonesia’s economic interest by crafting a friendly regional and global environment.

The economic turn in foreign policy is more structural than based on leadership. Given how similar Jokowi and Prabowo Subianto’s comments were in pre-election debates on foreign policy, it seems likely that even if Prabowo had won the presidential election, he would have defined ‘national interest’ in similar terms. Domestic economic benefits will continue to be electorally popular and critical in Indonesia and define what is and isn’t in the national interest. As a result, it will continue to drive Indonesia’s foreign policy — at least until the next turn.

Nobuhiro Aizawa is an associate professor at the Kyushu University School of Cultural and Social Studies.

An extended version of this article appears in the most recent edition of the East Asia Forum Quarterly, ‘Japan–China Relations’.

2 responses to “Indonesia’s foreign policy takes an economic turn”

  1. This post overlooks Jokowi’s consistent focus on defending Indonesia’s sovereignty. Even the Defence Ministry’s bizarre plan to recruit up to 100 million volunteer Indonesians to receive indoctrination and some form of military training is justified in terms of resisting threats to Indonesian sovereignty.

    If Jokowi’s overriding concern is with economic growth, it is hard to understand why he recently cut short his US visit when only discussions on investment remained on his agenda. Similarly, one wonders why he chose to boycott the APEC Summit just held in Manila.

  2. A new development that in fact lends support to the author’s thesis is the announcement made a day or two ago of a moratorium on executions in Indonesia. Jokowi’s right-hand man, Luhut Panjaitan, had reportedly been urging him for several months to take this step as long as the economy was delivering slower growth.

    Until now, Jokowi seemed to be deaf to this appeal, though executions didn’t resume immediately after Ramadan as expected. Diplomatic protests made by various countries including Australia seem to have had an impact, even if too late to save their own citizens.

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