Indonesia in Asia’s Changing Balance of Power

Southeast Asia’s largest state and the de facto leader of the Association of Southeast Asian Nations (ASEAN), Indonesia has long served as a linchpin of regional order. More recently, Jakarta’s status has risen even higher as concern over China leads countries such as the U.S., Japan, South Korea and Australia to strengthen ties with Indonesia. Yet China’s attempts to stake its own claims to regional leadership pose a direct challenge to Indonesia, while China’s development of a blue-water navy and its claims to virtually the entire South China Sea directly threaten Indonesian interests. As a result, Indonesia has found it increasingly difficult to play its traditional mediating role within ASEAN.

Indonesia’s key interests in Southeast Asia are to promote stability and ensure that the region retains its autonomy from great power influence. In the broader Asia-Pacific, Indonesia seeks what Foreign Minister Marty Natalegawa calls a “dynamic equilibrium” in which “there is not one preponderant country.” Indonesia has historically used ASEAN as a tool to pursue these goals, and Jakarta’s purported ability to lead ASEAN is an important source of its international influence. Accordingly, Indonesia has a major interest in ensuring that regional architecture is built upon ASEAN, thereby giving its members agenda-setting influence and helping prevent their domination by larger powers.

As an archipelagic state sitting astride vital sea lines of communication connecting the Pacific and Indian Oceans, Indonesia prioritizes protecting the sovereignty of its waters. As a nation of 17,000 islands that lacks the military capacity to protect itself, Indonesia has a strong interest in ensuring that major naval powers abide by the U.N. Convention on the Law of the Sea (UNCLOS). Thus, China’s naval advances and its designation of its South China Sea territorial claims as a “core” interest directly threaten Indonesia.

The South China Sea disputes, in particular, encapsulate the challenges Jakarta faces. While Indonesia has responded to China’s maritime provocations by raising them in ASEAN and ASEAN-centered regional organizations, Jakarta realizes that U.S. participation in these mechanisms is a prerequisite for responding to China by multilateral diplomatic balancing. Indonesia has therefore welcomed the Obama administration’s attention to Southeast Asia and its renewed engagement with ASEAN and the East Asia Summit, even as it is aware that the shift is driven largely by U.S. concerns over China. Sino-American rivalry therefore enhances ASEAN’s regional status but risks turning ASEAN into a forum for Sino-American competition, something Indonesia wants to avoid.

Beginning in 2010, however, when then-U.S. Secretary of State Hillary Clinton used the ASEAN meetings to state that the U.S. had a “national interest in freedom of navigation, open access to Asia’s maritime commons, and respect for international law in the South China Sea,” confrontation over the maritime disputes has become an increasingly central component of the group’s meetings.

As the 2011 ASEAN chair, Indonesia made it a key goal to produce guidelines to transform ASEAN’s nonbinding 2002 Declaration on the Conduct of Parties in the South China Sea into a legally binding code of conduct. Because Indonesia is not party to any territorial disputes in the South China Sea, Jakarta has traditionally tried to position itself as an independent mediator. Nevertheless, China does claim waters in Indonesia’s Natuna Island exclusive economic zone, an area rich in carbon resources, and Jakarta’s calls for resolution of the dispute according to UNCLOS clearly conflict with China’s positions. In July 2011, ASEAN and China did agree on a set of guidelines for the declaration on conduct, but they studiously avoid the issue of sovereignty. Hopes that the guidelines would include concrete proposals to reduce the potential for clashes, such as advance notification of military exercises and rules of conduct for parties on the high seas, were disappointed.

In pursuing a diplomatic resolution of the disputes, Indonesia must also seek to balance the interests of its fellow ASEAN members. Vietnam and the Philippines, which have borne the brunt of recent Chinese naval assertiveness, have called for greater ASEAN backing and also sought outside support, particularly from the U.S. The heightened tensions over the issue, both among ASEAN members and between the U.S. and China, underscore the challenges Indonesia faces in maintaining ASEAN cohesion while balancing the interests of China and the U.S.

These challenges are further heightened when the rotating ASEAN chair is closely linked to China, as it was in 2012. Cambodia, which held the rotating chair at the time, failed to include the South China Sea dispute on its list of key agenda items, in contrast to the 2010 and 2011 chairs, while also proposing that China be included in the drafting of procedures to implement the declaration on conduct. This led to open discord at the July 2012 ASEAN meeting, which failed to issue a joint statement for the first time in 45 years. As ASEAN’s centrality in regional architecture depends on its cohesion, any threat to the latter is a threat to a key aspect of Indonesia’s regional leadership.

Recognizing this, Natalegawa embarked on a round of shuttle diplomacy to ASEAN capitals to secure agreement on a six-point approach to the South China Sea disputes that was issued in place of the final statement. Natalegawa’s diplomatic efforts have papered over ASEAN’s differences but not resolved them. Moreover, ASEAN’s agreement to these principles does not appear to have induced greater Chinese concern for ASEAN’s position.

Clearly, for Jakarta, maintaining Indonesia’s traditional position as a mediator balancing the interests of great powers and its ASEAN partners has become more challenging. As a result, some analysts have argued that ASEAN-led multilateral processes, based as they are on soft power, are not sufficient to sustain regional order.

China’s rise has upset the regional balance of power, with Indonesia’s goal of a “dynamic equilibrium” now depending in part on the U.S. Indonesia welcomes the renewed U.S. interest in Southeast Asia but fears that the “Asia pivot” may escalate tensions unnecessarily. That, in turn, could undermine Indonesia’s ability to help shape relations among Asia’s great powers and its ASEAN partners to promote its goals of regional peace and stability.