A vast archipelago with growing geopolitical importance, massive production in critical minerals, and an economy poised to boom, Indonesia is central to a twenty-first-century U.S. strategy in the Indo-Pacific. But its role in American statecraft is often poorly understood, and Jakarta adamantly pursues an “independent and active” foreign policy. What should the U.S. strategy toward Indonesia be? What trade-offs and challenges will shape the future of U.S. policy toward this Southeast Asian giant?
Please join the Director of the Carnegie Endowment’s American Statecraft Program, Chris Chivvis, for the next installment of our Pivotal States series with Dewi Fortuna Anwar and Scot Marciel for a discussion of Washington’s strategic alternatives in its relations with Jakarta and Southeast Asia.
For past episodes from our series, click here.
Event Transcript
Note: this is a rush transcript and may contain errors.
Chris Chivvis:
Indonesia has been less critical of China, for example, than many other regional powers. China is Indonesia’s largest trading partner, has built high-profile infrastructure there, and is a major investor in its nickel industry, an industry that’s really central to Indonesia’s future economic plans. Jokowi has also stepped up Indonesia’s diplomatic role globally. For example, last year, he made a high-profile effort for peace in Ukraine, and he’s one of the few global leaders to have met with Xi, Biden, Putin and Zelensky. Indonesia’s also maintained open diplomacy with Iran, and been critical of some of America’s big Asian security initiatives like AUKUS, the partnership that ties the US, UK, and Australia more closely together militarily.
So what is Washington missing when we look at Indonesia? How hard will it be to keep Indonesia out of China’s orbit? Is trade liberalization maybe the answer? And if not, what are the other options? With me today to tackle these questions are two of the world’s top experts on US-Indonesia relations. Ambassador Scott Marciel, who is the Oksenberg-Rohlen fellow at the Freeman Spogli Institute for International Studies at Stanford University, and a former US Ambassador to both Indonesia and ASEAN. He is the author of a new book on US statecraft toward the region called Imperfect Partners.
I also have Professor Dewi Fortuna Anwar who straddles the world of academia, political activism and government. She is currently a research professor at the National Research and Innovation Agency in Indonesia, and has served as a senior advisor to the Indonesian President and Vice President, among other government posts. She joins us from Jakarta. Thanks to you both for being here.
Scot Marciel:
Pleasure.
Dewi Fortuna Anwar:
Nice to meet you.
Chris Chivvis:
Scott, I’d like to start with you, to give us a little bit of an overview of how you see America’s interests in Indonesia. Why does Indonesia matter to the United States? And when our most senior foreign policy officials think about Indonesia, what should they have at the top of their minds?
Scot Marciel:
Well, Indonesia is hugely important for the United States, and for the world, and certainly for Southeast Asia and the Asia-Pacific, partly for the reasons you’ve mentioned at the outset, Chris. The size, the world’s fourth largest country, third largest democracy. It also is home to the world’s largest Muslim population. And I don’t like to emphasize the Muslim aspect, but that is certainly a factor. It’s got a big and growing economy with tremendous potential, and it’s a big player in the region and increasingly internationally. So Indonesia has always been, since independence, very non-aligned. So from my perspective, the US strategic interest is not in trying to "win over" Indonesia in some way to be aligned with the United States. That’s just not going to happen. But rather our interest is in Indonesia continuing to be successful, stable, peaceful, democratic, more prosperous, and playing a constructive role in the region.
And as much as possible, we’d like Indonesia to work with us on regional diplomacy, economics, trade and investment, the environment, climate change, because Indonesia is a huge player in the environment. So building up that partnership. I think when we look at the US-Indonesian relationship, a lot of people like to say that it’s kind of underperformed expectations. That may be true to an extent. There’s just some fundamental differences in views about certain issues, certainly approaches toward the Middle East. But also, I think the one area of biggest weakness I see in the relationship is in the economy. The trade-investment relationship is not performed nearly as well as I think it could. So I hope that that will be a priority going forward.
Chris Chivvis:
Well, there’s a lot there to dig into. But before we do, Dewi, let me turn to you. And I’m interested in your thoughts about what American interests in Indonesia are, but I’m also interested in your thoughts about how US policy is perceived and has been viewed in recent years from where you sit in Jakarta.
Dewi Fortuna Anwar:
Yeah. I mean the US interest in Southeast Asia, and Indonesia being one of the largest country, in fact the largest country in South Asia, as you’ve mentioned, is geopolitics, geo-economics, geo-strategy. Geopolitics, Southeast Asia, has always been at the center of major power rivalry. The Cold War was very hot. One of the America’s deadliest war where thousands of young Americans died is in Southeast Asia. And Indonesia was very key. Indonesia was not part of the alliance against communism or against capitalism. It’s always been non-aligned. But the US was of course very keen to ensure that Indonesia was not one of the dominoes that fell during the communist takeover of Indochina.
Geo-strategically, there are so many flash points in the region with the South China Sea being a major point. Critical areas for navigations, important choke points have to come through Indonesian waters, Indonesia being the largest archipelago.
The geo-economics, Indonesia has always been rich in natural resources. There’s been huge American investment in the past in oil and gas and mining. America was the number one player. It still has a major economy interest. Freeport is still American owned company in Papua. So all of that is of major importance for the United States.
But I think we have to go back, Scott. The shadow of history looms large in the region, including in Indonesia. So Indonesia’s relations with the United States have always been a bit difficult. There’s been a lot of frustrations from both sides. A lot of love and hate relationship throughout the 50s when the US tried to prevent Indonesia from leaning too close to communist countries, leaning too close to China. Sukarno told the US to go to hell with its aid. And that is because of domestic politics. I mean Indonesia in fact entered into a near alliance with China. And then it swang to become anti-China and closer to the United States.
So when we are talking now about global competitions, US-China rivalry, from where I sit, there’s a sense of deja vu. We’ve been there. We’ve been here before. This seems to be back. Our history seems to be going back in circle. So Indonesia is trying to position itself to ensure its strategic autonomy while trying to engage. In the end of the Cold War, I think it is the only time that we can really do our free and active foreign policy. Because, as you can see, during the Cold War, Sukarno tilted too far to the left, Suharto seemed to be tilting too far to the right. So it’s not really a strategic autonomy at the time. Indonesia not being with its free and active foreign policy, in fact, became a defacto ally with the United States throughout most of the later part of the Cold War.
So now, what Indonesia is trying to do, Chris, is it’s trying to take advantage of what China has to offer in terms of investment, its large market and so on. But Indonesia would not be comfortable of becoming too dependent on any one country. For a long time, for decades, Indonesia has been very dependent on Japan for infrastructure development, for example. So now if you’re seeing competition for infrastructure development, it’s not US against China, it’s more or less giving also Japan a bit of some competition with China coming in. But at the same time, Indonesia is also very uncomfortable with what China is doing, particularly in the South China Sea, which also impinges on Indonesia’s exclusive economic zone north of Natuna.
So at the same time, you can really see Indonesia is not just maintaining strategic autonomy in the classic non-aligned stance of being equi-distance or trying to be neutral. No, that is not the case. It’s also trying to get the United States to be more engaged economically again. But at the same time it’s really beefing up the US-Indonesia bilateral military exercises have gone up. The Garuda Shield exercise, for example, have gone up from bilateral to become multilateral. From just a few thousand to large numbers of people, involving many countries now. So what you see is Indonesia, like other many countries in the region, are doing hedging, taking advantage, maximizing benefits, but mitigating risks in the face of China rise.
But, Scott, when you said that you didn’t want to over-emphasize Indonesia being the Muslim-majority country, that matters a lot actually. Because the US being a global player, how Jakarta perceives the US policy is not just about what the US does towards Indonesia or what the US does in the region, but also what the US does globally, particularly towards Muslim countries. The issue is Israeli-Palestinian problem remains one of the stumbling block of really warm relations between Jakarta and Washington. During the Bush period, Indonesia opposed the unilateral invasion of Iraq. And it’s always been very critical that the war on terror was considered to be more about war against Muslims and Islam xenophobia, and that affects Indonesia as a whole. So whatever the US does in the Middle East or in Afghanistan, that also affects Indonesia directly. And of course, during the war on terror, after the Middle East, Southeast Asia was in fact the most important battlefront when countering violence, extremism. So there are a lot of complex issues in how Jakarta perceives Washington and also how Washington perceives Jakarta.
Chris Chivvis:
Dewi, that’s fascinating. You’ve also laid a number of things on the table that I want to dig into. But, Scott, let me just go right back to you with that. I mean I think the idea that American global policy is at least as important in some ways in shaping the trajectory of US-Indonesia relations is an interesting point. I mean how do you respond to that?
Scot Marciel:
Yeah, I mean Dewi’s absolutely right. Of course, that does shape how a lot of Indonesians view the United States. Particularly our policy in the Middle East, toward the Arab-Israeli issue. More broadly, perceptions of US treatment of Muslims. When I was Ambassador, and that was 2010 to 2013, I talked to any number of people who said, "We have trouble with how the US... We think the US is discriminating or doesn’t like Islam." These sorts of things. So that’s been a real challenge, certainly, in the relationship, and one that we have to understand and recognize, and Indonesians are going to continue to speak out about that. And it does certainly affect the relationship.
Similarly, the US may not be happy at times with certain policies that Indonesia takes internationally. Maybe a little too willing to engage with Russia right now. In contrast to the criticism of the US about treatment of Muslims, sort of mute on China’s treatment of the Uyghurs. So it goes both ways, but I do think it’s a bigger issue in terms of Indonesian perceptions of the US than it is of US perceptions of Indonesia.
Chris Chivvis:
Dewi, could you explain a little bit about why, at least in Washington, we have the view sometimes that, and this is also true of other countries like Turkey and there are other countries that we could think of, that some countries will be critical of American policy in the Middle East, but then give China a pass when it comes to Xinjiang and the Uyghurs. Why is it that we have that perception and to what extent is that actually true?
Dewi Fortuna Anwar:
For Indonesia, if you go back, the history, in 1955, Indonesia hosted the first Asian African Conference, the Bandung Conference. There, the issue of Palestinian independence, the self-determination, a Palestine state was already one of the agenda, besides the fight for independence of other countries in Asia and Africa. And up to now, all the other countries have regained their statehood except the Palestinian issue. So for the Indonesian government, the issue of self-determination of the Palestinian people remains an unfinished homework. So for the Indonesian government, it is not a religious issue. It’s more this is an unfinished self-determination issue.
But for the majority of Indonesians population, for the Muslim, it’s a religious sentiment that daily they see persecutions. The Palestinians, the reaction of the Israelis, the occupation of the West Bank, the discriminations to the Palestinian people, this is something that they feel very strongly about. So Islam is not usually a key factor in Indonesia’s foreign policy, but when it comes to the Palestinian issue, it always has been one of the aspect that it has a veto power.
So Indonesia still does not recognize Israel, does not have diplomatic relations with Israel up to now, since that time. Because this is one area, any government initiative that says, "We’ll recognize Israel," it will go down very badly. Including, for example, is it under 18? This young football, soccer club that included an Israeli team, two governors, one from Bali who’s not a Muslim, and one from Central Java, Ganjar, who is not considered to be an Islamist. These two governors refused to allow the Israeli team to come. And people say, "Why are they doing that?" Because these are not seen to be Islamists. But don’t forget, they both come from PDIP, which is the remnant of Sukarno’s party, the nationalist party, and they have a very strong position on that. Now [inaudible 00:16:09]-
Chris Chivvis:
It’s a very central issue for historical reasons. Yeah.
Dewi Fortuna Anwar:
Yeah. So then to answer why for the Xinjiang issue, well, I want to be cynical about it in a way, because there are not exactly a lot of news on CNN or BBC about what actually happened Xinjiang, because the world media does not have free access to that region. So you’re not confronted daily of a conflict there, because it’s very controlled. China has also been very adept engaging Muslim organizations in Indonesia. They brought leaders from the Nahdlatul ‘Ulama and so on to that part. And I can also tell you that they have been very active also. China has been very active in establishing Chinese study centers in Islamic institutions, universities. Not in main universities, not like University of Indonesia or the big universities. But they have been very careful, selective. Some of the smaller Islamic universities, they have established Chinese studies there. And so they have been very good at what you call public diplomacy, and it seems to have paid off. There is lack of publicity about it worldwide and also active public diplomacy by Beijing.
Chris Chivvis:
No, that’s very interesting. Let me just step back a little bit here, and I want to go again to the broader question of Indonesia’s relationship with China. Scott, I think it was implicit at least in what you said a few minutes ago, that there is a risk of Indonesia drifting more and more into China’s orbit. Do you see that actually happening over the course of the last few years? Or is this something that American policy makers need to guard against?
Scot Marciel:
I’m not too worried about Indonesia drifting into anyone’s orbit. Indonesia is really proudly independent, and it also is far enough away from China, and has the mass in terms of size, population, economy, to stand up for itself and resist any excessive gravitational pull. That doesn’t mean that Indonesia won’t work closely with China on things like infrastructure as Dewi said. It absolutely will. But I’m not really worried about Indonesia drifting into the Chinese orbit.
And from a US perspective, even if we were worried about that, the thing to do is not go to Indonesia and say China’s bad, which sometimes American politicians are tempted to do. It’s not a helpful approach. We should be focused on what we’re doing and how we can build a relationship with Indonesia. And the same goes for the rest of Southeast Asia. None of these countries want to be vassal states of anyone else. They all want their independence, their strategic autonomy, as Dewi said. So we need to have some confidence and trust in them, and focus instead on being a good partner.
And I think when we look at the US-Indonesia relationship, there’s a lot of positives. This is not a bad relationship. There’s a lot of business. There’s a lot of diplomacy. There’s a lot of people-to-people ties. But it’s not as good as it could be. And I think strengthening the economic side, continuing to strengthen the education side. The environment side, I mentioned earlier Indonesia’s one of the world’s largest emitters. The US and Japan are leading a G7 effort working with Indonesia on this so-called Just Energy Transition Partnership to help Indonesia accelerate its shift from coal to cleaner energy. And it’s crunch time for that partnership to work. So the US needs to show that it and its partners can deliver and do their part on that. So it’s working with Indonesia, recognizing there’s going to be some differences here and there. That should be the focus rather than worrying so much about what China’s doing.
Chris Chivvis:
That’s it. That’s a really interesting framing. Can you talk maybe just a little bit more about what we might do to deepen the economic relationship?
Scot Marciel:
Yeah. The economic relationship’s been a struggle for some time. I mean I just looked at the trade numbers this morning, and they have gone up the last few years after being relatively stagnant for a while. Still around $35, $40 billion in bilateral trade, which is not very much for two very big countries. And my argument would be, and Dewi may disagree, Indonesia has been relatively protectionist for a lot of years. It has sort of a protectionist default, which I’ve always thought may be partly the legacy of being colonized by a Dutch company caused a lot of long-term ambivalence about dealing with Western companies. And investment, there’s significant US investment. A lot of it, as Dewi said, has been in the natural resources sector, which is good, but it’s also a sensitive spot for Indonesia. So I think there’s opportunities to do more in, again, clean energy technology. There’s a thriving startup market in Indonesia. There’s a lot of opportunity, but it’s been tough to break through. When I was there, the biggest issues we faced really on a government-to-government level were over trade and barriers to trade.
Chris Chivvis:
Dewi, what’s your reaction to that? I mean what would you put at the top of the list of ways to strengthen US-Indonesia relations? Would it be economics and trade or would it be something else?
Dewi Fortuna Anwar:
Well, Indonesia and the US has signed already a comprehensive strategic partnership that covers everything under the sun. There’s politics and security, there’s economic, there’s technology, there’s people-to-people, maritime cooperation and so on. On the security side, Indonesia of course doesn’t want to become overdependent on the US again for its military procurement, because Indonesia suffered from US embargoes and sanctions over the East Timor issue. And that really undermined Indonesia’s defense capability. So Indonesia is keen to get the best technology transfer from whatever countries that offers, but clearly still wants to buy some of the US as well. I think in fact it’s already procuring that. And the US, again, has restored military-to-military relations with Indonesia. So a lot of Indonesian military officers, they get their training from the United States. That was stopped for a while after the East Timor crisis.
But on the economy, it can be deepened. As Scott mentioned, it’s mostly in the extractive sector. And usually, extractive sector is in remote areas. They do not really generate a lot of employment opportunities either. That’s very limited. And also the duration is quite limited. For example, Mobile Oil used to be very big in gas, in Aceh, which also became a source of conflict with the Free Aceh Movement. But now, the gas is no more. So if the US can come to offer this green economy, this blue economy, then it’s a lot of opportunities, because the US is of course quite advanced in the technology there.
But coming back to China, regardless, for the US, the worry is about the geopolitics, the geo-strategic issues, what China is doing in the South China Sea and so on, what it does to the freedom of navigation. But I’ve written an article on this, on Indonesia-China relations coming full circle. Most Indonesian people are less concerned about geopolitics, geo-security. They’re more concerned about their own internal economic livelihood. And China has always been a problem. Relations with China is not just a foreign policy issue for Indonesia, it’s always been part of domestic politics. So we have to be very careful about that. Because, as you know, the largest overseas Chinese are in Southeast Asia, and they are very influential economically.
During the colonial periods, they were used as middlemen, as the class that extracted taxes, that controlled the trade. So they often became targets. Rather than attacking the Dutch, or attacking the British, or attacking the Spaniards, the local Chinese tended to be the vulnerable targets, and they have suffered massacres, and a lot of unpleasantness throughout centuries. And it happened again at the end of this new order period when the Suharto regime fell down, anti-Chinese riots in Indonesia. So we have to be careful about not having this anti-China hysteria, because it’s always got conflated with domestic politic as well. So Indonesia, this remained the suspicions, because China was accused of supporting the Communist Party in Indonesia. That led to the death of several generals. In fact, that triggered the fall of the Sukarno government and the rise of the very anti-communist military regime.
And the suspicions, everything to do with China and Chinese, as you know, were totally forbidden throughout the Suharto period. Indonesia froze diplomatic relations with China between 68 and 1990, and didn’t even allow Chinese scripts on ketchup bottles coming to Indonesia. The Economic Review, the magazines, even the Travelers’ Tales, the Chinese characters needed to be absolutely blackened. So that was totally banned. Indonesia only normalized relations again with China in 1990.
But while the economy is growing very steadily, there are concerns about the impact to Indonesian workers. There’s a lot of criticism, for example, that a lot of Chinese investment also bringing not just white collar workers, but also blue collar workers. Now, if investment from Europe or from the United States, from Japan, of course it doesn’t make sense for them to bring their own blue collar workers, it’s too expensive. They would only bring the higher level, and they would train local people to be mid-level managers, and then all the workers would be local. But the Chinese company do not operate in that way. They design the projects, they bring their own workers and then they build it. So there’s a lot of criticisms that’s less of the multi [inaudible 00:27:55] effects from the Chinese investment. So there’s a lot of-
Chris Chivvis:
Dewi, is that difference well understood between the benefits of Western as opposed to Chinese?
Dewi Fortuna Anwar:
Yeah, yeah. So there’s a lot of hoax news in fact, before the last presidential elections. In fact, General Prabowo, who is now in the government as Minister of Defense, one of the issues that he raised, for example, and the parties that criticized President Joko Widodo for being too close to China, was that they allowed an influx of millions of Chinese workers to Indonesia. Which is not true of course, but the fact of the matter is that there are workers from China. They’re not in large numbers, but that is the business deals that Indonesia signed. So this remains a very sensitive issue with Indonesia.
Chris Chivvis:
[inaudible 00:28:44]
Dewi Fortuna Anwar:
Yeah, so when Indonesia joined the ASEAN and China Free Trade Arrangement, Indonesia was not really well prepared for the influx of Chinese manufactured products and agricultural products. So there’s huge demonstrations when the ASEAN-China Free Trade Agreement came into effect in around 2011. The huge demonstrations on the streets of Jakarta asking the government to revoke that, because it’s very difficult now to find Indonesian fruits in supermarket. Fuji apples and oranges from China are much cheaper than oranges from Medan or Kalimantan. So because of Indonesia’s poor connectivity, shippings within the islands sometimes are less efficient and more expensive. So imports from China are finding the markets. Even batiks, printed batiks from China. So there’s concerns of too much exposure of Chinese economy.
So for the domestic constituents, it’s about the impact of Chinese economic penetration that they worry about. And of course, Indonesia, again, being the world largest Muslim nation, being a communist is anathema. China, it’s capitalist now, it’s still a communist system. So for the majority of Indonesians, that doesn’t go well. We do not have the same values. So we can have very good cooperation, but we have different values, and there are also concerns, as I said about the socioeconomic-
Chris Chivvis:
I think a lot of what you’re saying, Dewi, really supports what Ambassador Marciel was saying about the likelihood that Indonesia will remain independent and autonomous in its foreign policy given the cultural factors that you just laid out, as well as the economic ones. This is pivotal states with the American Statecraft Program at the Carnegie Endowment, and this is the time when we start to go to questions from our audience here. We already have a few coming in and they are about ASEAN, which I think we should probably, given the events that are going on today, spend some time talking about. So we’ve got one right here on President Biden’s decision not to attend the ASEAN Summit. A lot of people have been talking about this. I mentioned it in my opening comments. Let me ask you, Scott, can you give us your view on this? Is this a sign of America’s lack of interest in Southeast Asia, or if not, how should we read it?
Scot Marciel:
First, I’m someone who’s always argued very strongly that US presidents should attend these summits. I think it’s really important to show up consistently. That said, a couple of things. One, President Biden and his team have engaged with Southeast Asia very substantively and consistently since they took office. Two, I mean, President Biden’s going to Vietnam, which is an ASEAN member, instead of going to Indonesia. I mean arguably he could’ve gone to both, but then with the G20 Summit in between, it would’ve been a very long trip and not really viable. So personally, I wish he were going, but I think you see very steady and consistent and substantive US engagement with Southeast Asia during this administration. And I think that helps a lot. People will still be disappointed that he didn’t go and that he sent the Vice President.
Another point would make is Xi Jinping has sent his deputy every year and nobody says anything about that. Part of that is because China is clearly engaged in the region all the time. So people don’t doubt China’s interest. The problem with the US President not showing up is not just not showing up, but not showing up combined with failing to be engaging with the region. I think, at this point, the US is engaging quite well with Southeast Asia. Dewi can disagree, but my experience with Southeast Asians, they want to see consistent engagement over a period of years. And then if the President misses an occasional meeting, that’s acceptable.
Chris Chivvis:
But there is an argument that China is sort of overwhelming the United States with its presence in many countries in the region, diplomatic, economic and otherwise. Is that true or is that just not the case?
Scot Marciel:
I wouldn’t say overwhelming. I mean the US diplomatic presence, China’s diplomatic presence, I think, I don’t know the exact numbers, they are probably pretty similar. Certainly China’s become a bigger economic player and a bigger trade partner, although the US remains a very, very large export market. So China’s very active, but again, I don’t think it’s a matter of having to match investment for investment or scholarship for scholarship. Again, given that Southeast Asian countries want to be autonomous, want to be independent, and want to have good relations with both countries, it’s not so much matching China as making sure that the US is doing all that it can to be a very good and reliable partner.
Chris Chivvis:
Really interesting point. Dewi, how about you? What do you think about President Biden’s decision not to go? And also what are other people saying about it in Jakarta?
Dewi Fortuna Anwar:
Since I’m no longer the government, I can be as blunt as I like, and frankly, I’m very disappointed. Because the fact of the matter is, the key word is reliability, being a reliable partner. And through the Trump administration, ASEAN was clearly not considered that important, because throughout the Trump administration, the United States did not even appoint the Ambassador to ASEAN. So the position remained vacant, and President Trump attended the East Asia Summit once, and then after that, he gave it a miss for the entire duration of the administration. So there’s a huge expectation when the Biden administration came that talk about support for ASEAN centrality and continuing, more like Obama 2.0, really close again, that the US is going to be engaged again. So there’s a lot of expectations. And in the first year, it went up, people are quite happy, but they are still waiting for it.
So when President Biden said that he is not coming for Indonesia, as a chair ASEAN, it is very disappointing. Because usually, the Asian summit comes later in the year. Usually, the first summit, which is just for ASEAN members, will be early in the year, and this, I think it was earlier. It was held in May, was it? April or May. And then usually, the next one will be in late October or November.
The Indonesian government brings the summit forward to early September to make it possible for leaders who are attending the G20 also to come to ASEAN meetings first. So you can imagine that Indonesia as a host is trying to rush a lot of this agenda, and bring it together, and bring it forward at least two months early. And after all that, President Biden still doesn’t come. But if he only goes to India to G20, and then he has to rush back home, maybe people say, "It’s okay." But to add insult to injury, he’s going to Vietnam but missing Jakarta, Indonesia is the largest member of ASEAN, regarded as the natural leader, and that is bending backward in terms of the timing.
So yes, we are disappointed. It doesn’t mean that Vice President Harris is not welcome, that she’s not going to be substantively very, very solid in leading the US team. But the fact of the matter is that it’s like we don’t think ASEAN is that important when we don’t think that Jakarta is that important. That is that sense. We think the US-
Chris Chivvis:
So here’s the question then, from an American perspective, Scott, why does ASEAN matter? I think this is something that someone like you, you were the Ambassador to ASEAN, but I mean when you had to explain it to people, and I’m not just talking about around the state Department, but I mean more broadly than that, I mean why should American citizens care that their President goes to a meeting like this?
Scot Marciel:
Yeah, I think there’s a couple of reasons. I mean, ASEAN is not this bold, incredibly dynamic international organization. Not that there’s a lot of bold, dynamic international organizations to begin with. It’s cautious, it’s consensus-based. The meetings themselves are, frankly, often rather dull, although there’s a lot of side meetings that are very important at these meetings. But to me, the main thing about ASEAN is it’s really important for the 10 member countries that together constitute almost 700 million people or represent 700 million people, and collectively would be the world’s fifth largest economy. It’s a really important institution for all of them, and it has helped do its primary job, has done very well, which is keeping peace among those 10 countries, and that was-
Chris Chivvis:
Which is in America’s interest, no question about it.
Scot Marciel:
Very much in America’s interest. And going to those meetings, one, you end up having a lot of important meetings, bilateral meetings, and small meetings that are very valuable, even if the central plenary meeting, if you will, is not that exciting. But two, to put it in simple terms, we used to say, "It’s a 10 for 1." You go to one place and you’re paying respect to an institution that’s important to all 10 countries, and that helps your relationship with all those 10 countries. And vice versa, not going is seen as somewhat dismissive.
Now, the Vietnamese won’t mind because they’re hosting the President in Hanoi, but otherwise it’s disappointing. But ASEAN has really been very important in keeping the peace in Southeast Asia. Its ability to convene all the world’s major leaders, that’s the only institution that could do that, because ASEAN isn’t threatening to anybody. So they can call everyone together, and everyone will come. And also, again, this is a part of the world that’s very dynamic economically, becoming more and more important economically. Looking out to the future, as much as we can predict these things, this is going to become a more and more important region economically as well as strategically. And again, you don’t go to the ASEAN meetings for the ASEAN meetings. You go to the ASEAN meetings, because it’s 10 countries in a really important region that matters a lot.
Chris Chivvis:
Really interesting. Dewi, what would you add to that from where you sit in Jakarta?
Dewi Fortuna Anwar:
Yeah. President Biden has reiterated over and over again that ASEAN is at the heart of the US Indo-Pacific strategy because the ASEAN region is really geographically at the heart of the Indo-Pacific, and it is the primary convener of all of the powers around the region. So one want to say, in the one hand, that ASEAN is at the center of the US strategy, but then you’re missing this very important summit, which the host is the largest member of ASEAN. I find it a bit mind-boggling, to put it in French. I find it a bit strange, put it that way.
Chris Chivvis:
Okay. Well, we have a number of questions coming in here. This again is Pivotal States with the Statecraft Program at the Carnegie Endowment, "I’m delighted to be here with Ambassador Scott Marciel, former US Ambassador to Indonesia and ASEAN, and Professor Dewi Fortuna Anwar, who is a research professor in Jakarta, and former high-ranking Indonesian government official." Let’s take this question right here, because I think this has come up about the Just Energy Transition Partnership. The question is specifically on whether or not it will facilitate mineral cooperation between Indonesia and the US, especially with regard to nickel. And Indonesia of course is one of the world’s largest reserves of nickel, and has been developing and putting nickel at the center of its economic strategy. Isn’t that right, Scott?
Scot Marciel:
Yeah, absolutely.
Chris Chivvis:
So what are the prospects for the Just Energy Transition Partnership, as you see it?
Scot Marciel:
Well, the Just Energy Transition Partnership was an agreement between the G7, led by the US and Japan, plus, I think, Denmark and Norway, and Indonesia, where the G7+ countries would agree to mobilize, with the private sector support, $20 billion. And Indonesia would agree to accelerate transition from out of coal to cleaner energy. And this was announced last November. Indonesia has been working on an investment plan. They come up with specific projects that would then lead to tapping the money. I don’t know how it’s going to work out. There’s a real question there. It’s a huge opportunity for both Indonesia and the US, as well as the rest of the G7, and actually globally, to see if one of these partnerships can work. Indonesia has been complaining somewhat about the financing. They’re not happy with the amounts and how concessional or not it may be. But I think both sides are still really working to try to make this happen. So it’s a wait and see thing for us.
Now, linked to that is the critical minerals that Just Energy Transition Partnership doesn’t directly go into the critical minerals. But related to that, Indonesia is trying to process nickel, go from a exporter of raw nickel, to process nickel, and eventually to actually build electric vehicle batteries there. The Indonesian officials have said that they would like to have a limited free trade agreement with the United States that would allow Indonesian processed nickel and maybe eventually batteries themselves to take advantage of the Inflation Reduction Act, which gives a $7,500 tax credit. But the critical minerals side of that, the critical minerals would either have to come from the US or from a country with a free trade agreement with the US. So Indonesia has broached that idea. Personally, I think it makes a lot of sense, because the US is trying to diversify, not rely totally on China, but there’s been no official movement on that yet, but I think it’s a huge opportunity.
Chris Chivvis:
Dewi, let me ask you the question that’s come up here about Indonesia’s possible role in doing more on Myanmar. Do you think there’s more that could be done at the current juncture?
Dewi Fortuna Anwar:
Well, Indonesia’s Chair of ASEAN, the Special Envoy unfortunately, it’s rotating now within ASEAN. That’s another issue. But at the moment, as you know, when the coup took place, Indonesia at the time, although the chairmanship of ASEAN was held by Brunei in 2021, it was Indonesia that initiated the meeting in Jakarta that also invited the junta, making it very clear that the invitation to the junta was not a recognition of the junta. But making the junta accept this five-point consensus, to end the violence, to release the political prisoners, to ask the junta and the other parties in Myanmar to have inclusive dialogue. And also to ensure that the junta would allow access to humanitarian assistance and also the appointment of an ASEAN Envoy to meet with all sides.
At the end of the day, internal conflicts must be decided by the people themselves. The US has a lot of experiences, with all the US military might and economic wealth and so on, not much could be done to bring lasting peace in Afghanistan, for example. And Myanmar has been on and off ASEAN, and Indonesia also played an active role in the earlier transition to democracy. Myanmar used to look to Indonesia where the military also was very dominant in politics. At the time I was in fact also quite actively involved, through various institutions and also personally, we said, "Just clean up your act a bit, not to be so blatantly cruel and violent."
In Indonesia, the military enjoyed international acceptance throughout the new order government, while enjoying power, sharing while remaining dominant. So they look at the Indonesia model before 1998 where the military played a role in politics. But now, I’m not sure whether Myanmar still looks to Indonesia for a model because they probably see the Indonesia has gone too democratic. Maybe they look at the Thai model where the military continues to hold sway.
But I believe that ASEAN should play an active role in trying to ensure that member states should comply with the principles that ASEAN himself has agreed upon. In the ASEAN charter, it talks about adherence to democracy, adherence to protect the human rights, rule of law and constitutional change of government. And any organization should abide by the rules and should have the ability to enforce the rule. Unfortunately, ASEAN is not there yet.
And I believe that at the moment, ASEAN has made it possible to exclude the top leadership of Myanmar from attending ASEAN meetings. So despite the lack of an enforcement mechanism in ASEAN, and despite this stress on consensus decision making, the nine ASEAN countries have been able to make consensus, excluding Myanmar. But I think that we need to go further than that. If Myanmar is serious about continuing its membership within an organization like ASEAN, then I think the junta should think very deeply whether it wants to continue to thumb its nose to the five-point consensus, which is now the main starting point, the main platform for ASEAN. Myself personally, I’ve always been very critical of ASEAN’s lack of enforcement mechanism.
Chris Chivvis:
Scott, do you agree that we are sort of at the limits of what could be realistically expected?
Scot Marciel:
Yeah, well, I was also Ambassador to Myanmar from 2016 to 2020, so I know a little bit about that situation. And I think you can be critical of ASEAN for not being tougher vis-a-vis the junta. I think that’s fair, and that’s because it’s split, it’s divided, ASEAN is. On the other hand, this junta, the Generals who are leading this junta, these are not people who compromise. They’re absolutely brutal like nobody I’ve ever seen in my life. So I don’t think even the best diplomacy from ASEAN is not going to convince these guys to stop the violence against their people or surrender power. The only thing that has a hope of working is massive pressure. ASEAN’s done some on that front. I would like to see it do more, but it’s unlikely, because of the split within ASEAN.
Chris Chivvis:
There’s a question here that I actually had been wanting to ask, which is turning towards the future, what we think the opportunities and risks are going to be in US-Indonesia relations? Obviously, President Widodo is coming to the end of a long term as the president of Indonesia in 2024. And there are a number of different contenders out there to take the reins of state. I wonder, Dewi, from your perspective, we could start with you, if you could talk a little bit about how different outcomes in the upcoming presidential election could affect these dynamics that we’ve been talking about, the future of US-Indonesian relations?
Dewi Fortuna Anwar:
Yeah. Because Indonesia has a clear doctrine, foreign policy doctrine, a free and active foreign policy, and non-alignment is very much in our DNA, there’s not much of a sharp swing that you can expect from Indonesia’s foreign policy. We don’t expect the kind of sharp swing that happened from Sukarno to Suharto. There is the kind of strategic autonomy, non-alignment meaning now not being aligned to anybody, but also being in multi-alignment, multi engagements. So what Indonesia would like to do is to engage with all countries for our mutual benefits and to have more choices. Indonesia doesn’t want to be boxed into one corner. For example, only having to become too dependent on China, or too dependent on Japan, or too dependent on the United States. So the most important thing is to have choices. So if the US is concerned about China becoming too dominant, for example, economically, the panacea to that is to come with your own offers. Flesh out the IPEF, the Indo-Pacific Economic Framework, make it more concrete.
While talking about standards and governance is good, people in my part of the world are also extremely materialistic. They want to see the color of your money, how much are you going to invest in what particular areas? The next presidents will continue to focus on ensuring Indonesia’s value-added economy. So Scott talks about this protectionism. A lot of Indonesia has been criticized, for example, that in fact a lot of countries are very upset that Indonesia, it’s not exporting its raw materials like nickels and so on. But I think all the Indonesian leaders in the future will want to continue to improve Indonesia’s position in the global value chain by also having its value-added industries here.
And want to work with the industry of the future, the digital economy, this energy transition. And the US is way ahead here. It’s proven technology, the US has all the research capacity, and all the technological know-how that is trusted. So we hope that the US will play a big role again. And when it comes to the region, don’t be so fixated on China and focus only on the military dimensions, because again, people in Southeast Asia relates economic development to security. Because for most countries in the region, a lot of our insecurity still comes from within from communal conflicts, from regional grievances and so on. So delivering economic development is still very much key to peace and stability.
Chris Chivvis:
Essential in many countries around the world that the United States is engaging with. Scott, do you also see no big changes in any of the presidential candidates or coming out of the presidential election next year?
Scot Marciel:
Yeah, I mean, I think there could be some changes if Prabowo Subianto is elected, there may be some change. But I agree with Dewi that within certain parameters, and those parameters are non-aligned, free and active. So I wouldn’t expect dramatic shifts. It would be more here and there. And I think for the future of the relationship, the security part of the relationship is now pretty good. It can always be better, but I think that could be pretty good. It’s the economy, focus on clean energy technology, and also education. Our universities are one of our greatest assets. Excuse me. The number of Indonesians studying in the United States has been pretty stagnant for a while. I think we should be trying to get more Indonesians to study here, and promoting these so-called people-to-people ties.
Climate and clean energy and working with Indonesia in the minerals, because Indonesia’s got a lot of minerals that we don’t have. It’s got serious environmental issues with how a lot of those minerals are being both mined and processed. So if we can work with Indonesia to make it attractive for higher quality investment in those areas, I think it’s a win for Indonesia in terms of jobs and the environment, but also a win for us in terms of the multiplication of sources of key minerals.
Chris Chivvis:
Well, we’re coming to the end of our time here on Pivotal States. It’s been a great discussion. I want to ask you a question that I like to ask at the end of these sessions. And that’s that if you were to sit down with President Biden, what would be at the very top of your list? What would you put right there smack at the top? Professor Anwar, let me ask you first.
Dewi Fortuna Anwar:
Well, I’d say treat Southeast Asia on its own merit, not as a derivative of the US policy towards China. So don’t only just come to Southeast Asia when you’re worried that another power is muscling-in in your territory. Southeast Asia doesn’t want to be taken for granted. It’s a huge region. It’s strategically important, it’s a huge population, economically dynamic. So treat us with consistency, not parachute one time, too much attention at one time, and then disappearing for another moment. Nurture the relation in a more consistent manner.
Chris Chivvis:
Fantastic. Ambassador Marciel?
Scot Marciel:
I’m smiling because what Dewi just said, at the risk of plugging my own book, that’s pretty much the conclusion of my book. Southeast Asia is important in its own right, deal with it consistently, not episodically on its own merits. I mean, actually, if you’re worried about China, that’s the best way to proceed, but it’s also the best way to get a positive reception in the region.
Chris Chivvis:
That’s a fantastic place to end. Ambassador Marciel, Professor Anwar, thank you so much. It’s been a great discussion. I look forward to continuing it in the future, and thanks everyone for joining us.
Scot Marciel:
Thank you.
Dewi Fortuna Anwar:
Thank you.
