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Indonesian Foreign Policy under Jokowi

Laura Schwartz

January 15, 2015

In October 2014, Indonesia inaugurated its new president, Joko Widodo, or "Jokowi," as he is widely known. As the first president elected from outside Indonesia’s political and military elite, Jokowi’s election has been welcomed by many Indonesians as a victory for democracy and as a promise of more effective and transparent government in the future. But where some see immense potential, others voice uncertainty about how the Jokowi administration will balance domestic and international concerns, as well as about how these decisions will affect the prospects for U.S. engagement in the region.

Jokowi will likely make domestic issues a main focus of his presidency. Indeed, his actions as president so far—including increasing fuel prices to ease the substantial burden these subsidies place on the government budget—have largely dealt with pressing domestic concerns. However, he has also stated a number of foreign policy priorities, such as expanding Indonesia’s maritime presence, developing its role within the Association of Southeast Asian Nations (ASEAN) and the broader Asia-Pacific, and increasing defense spending.

On numerous occasions, Jokowi has emphasized his aim to develop Indonesia into a "global maritime axis" in the Indo-Pacific region. As an archipelagic nation, maritime competence is critical for Indonesia, but the country’s ports and naval capacity are underdeveloped. This has long affected Indonesia’s ability to connect its thousands of islands and effectively police its territorial waters. Jokowi’s calls for a stronger maritime presence may reflect concern over China’s recent confrontations with the Philippines and Vietnam in territorially disputed areas of the South China Sea.

In the past, Indonesia has acted as an honest broker among the ASEAN claimant states and China, but the recent overlap of China’s "nine-dash line" with Indonesia’s territorial waters in the vicinity of the Natuna Islands may be a factor behind Jokowi’s push for a stronger maritime presence. He has also pledged to take a hard line against illegal fishing in Indonesian waters. The public sinking of 3 Vietnamese fishing vessels that were seized in November led to speculation that Indonesia may act similarly against China by sinking 22 Chinese fishing boats seized in Indonesian waters in December. A decision to sink these ships would create tension between Indonesia and China, two key regional powers, and could have a broader impact on regional stability.

Another priority for Jokowi in 2015 is to ensure that Indonesia’s interests are well-represented in regional economic institutions. The ASEAN Economic Community (AEC), which intends to create a single market among the ten member states of ASEAN, is set to be implemented by the end of 2015. Overall, Jokowi sees the AEC as good for the Indonesian economy, but he has expressed concerns that Indonesia could become a victim of unfair trade as a result of the implementation of the AEC. His calls for protecting Indonesia’s economic interests likely stem from rising economic nationalism in the country. As Rizal Sukma, a key foreign policy expert, recently noted, the new government "will mainly underline international agendas that will benefit national economic development." ASEAN needs Indonesia’s robust participation to implement the AEC and other regional initiatives, so Jokowi’s decisions in this area will have a deep impact on the regional grouping.

As the leader of a vibrant democracy, Jokowi may need to navigate a complicated and fragmented domestic political environment throughout his presidency. His broad foreign policy objectives, as well as his goal to raise defense spending to 1.5% of GDP in the next five years, may face resistance from an opposition-dominated parliament that could prove to be antagonistic toward the new president. However, key members of the Jokowi administration have downplayed this concern. Senior adviser to the president Luhut Binsar Panjaitan recently predicted that relations with parliament will be better in 2015 as Jokowi’s firm leadership in pursuit of popular goals, including widespread economic prosperity, becomes recognized.

Though little can be certain mere months into his presidency, Jokowi’s statements so far have shown that he is likely to utilize Indonesia’s regional influence to promote policies that benefit the Indonesian economy. These broad priorities will set the stage for his administration’s actions in 2015 and have profound effects on the country’s role within the region and interaction with powers such as the United States and China. Indonesia is a growing regional power, and the decisions made during the Jokowi presidency, particularly regarding economic integration and maritime security, will affect Southeast Asia and the Asia-Pacific more broadly. As the new president’s popularity may allow for new avenues of cooperation, the United States will need to consider Indonesia’s interests as it looks to further engage with the largest economy in Southeast Asia.

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This is one of 15 essays examining how 2015 will shape the economy, political systems, and geopolitical arena in the Asia-Pacific and beyond. Download all 15 essays in PDF format or access them online below.

Laura Schwartz is a Trade, Energy, and Economic Affairs Project Associate at NBR.

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