Indonesia’s Path Between the Reefs

This week, Indonesia heads to the polls to elect a new president. Any exercise of democracy in this sprawling, diverse archipelago nation—the world’s fourth most populous country—is nearly continental in scale. Several candidates are vying to replace the popular president, Joko Widodo, known as Jokowi, who has ruled the country for the last decade but must now step down owing to term limits. The campaign has seen three main rival coalitions spar over the place of dynasties in Indonesian politics (Jokowi’s son is the running mate of Prabowo Subianto, the leading presidential contender, who had lost twice to Jokowi but now has the president’s full backing) and over other issues of importance to the public, including the appropriate role for government in driving economic growth and questions about foreign investment. The other two presidential candidates are the former governor of Jakarta, Anies Baswedan, and the former governor of Central Java, Ganjar Pranowo.

The election also comes at a time when Indonesia, as the biggest country in Southeast Asia, finds itself on the frontlines of the intensifying competition between China and the United States. Under Jokowi, Indonesia and China have grown significantly closer. Jokowi sought to spur the Indonesian economy through major infrastructure projects, many funded with the help of China. Trade between Indonesia and China has exploded steadily in recent decades, after the two countries normalized relations in 1990. (For much of the Cold War, the two capitals were at odds.) But Indonesia has also sought to underline its traditional nonalignment, cultivating ties with many powers while resisting any attempt to bring it into a formal alliance. It has pushed back firmly against Chinese adventurism in the South China Sea near Indonesian territory, and a few presidential candidates have used strong language about safeguarding the country’s security in the face of the implicit threat from China.

Managing relations with China, maximizing the benefits and mitigating the risks, is likely to continue to be an important theme in Indonesia’s foreign policy in the coming years. Relations with China remain a contested issue in Indonesian domestic politics, as elites tend to be divided in their perceptions of the benefits and dangers of close relations with Beijing. Although China is regarded as a very important market for Indonesia’s exports and a major source of foreign investment, particularly for Jokowi’s signature infrastructure projects, cheap imports from China have undermined Indonesia’s manufacturing and agricultural sectors. The influx of large numbers of Chinese laborers to work on projects funded by Chinese loans has triggered protests. Many Indonesians are concerned about the negative environmental and social impact on communities in eastern Indonesia of China’s investments in nickel mining and smelters. Becoming too economically dependent on China, some say, could weaken Indonesia’s ability to stand up to Beijing on its encroachment in the South China Sea. Distrust runs deep; some Indonesians continue to harbor the suspicion that China supported a communist coup attempt in Jakarta in 1965.

And yet despite this disquiet regarding China, Indonesia’s overarching foreign policy is unlikely to change. Jakarta will refuse to pick a side in any contest between Beijing and Washington. Since it finally freed itself from Dutch rule in 1949, Indonesia has adopted a “free and active” foreign policy that forbids the country from entering any military alliances. This doctrine and Indonesia’s policy of nonalignment (Indonesia was a founding member of the Non-Aligned Movement in 1961) have been enshrined in the country’s 1999 Foreign Relations Act. They are regarded as sacrosanct values and part of Indonesia’s national identity that no political leaders can easily set aside. But Indonesian elites also believe that upholding these principles makes practical sense; the country’s interests will be best served by autonomy, not by hewing to the inclinations of a more powerful external partner.


In 1948, Mohammad Hatta, Indonesia’s first vice president, proposed that Indonesia’s foreign policy should try to “paddle between two reefs” by navigating a “free and active” path for the country. Indonesia would not join any military alliances or Cold War power blocs but would instead chart its own course. This doctrine has survived the Cold War and continues to define Indonesia’s foreign policy, even as the broader region finds itself in the midst of a new era of great-power competition.

Indonesia cannot cut itself off from China, nor can it allow itself to be dominated by China. Like many other countries in the region, it pursues a hedging policy that allows it to cultivate economic ties and strong diplomatic engagement with China while still retaining its autonomy and freedom to maneuver. This approach goes beyond simple neutrality or nonalignment because it is purposeful, not passive. Nonalignment mostly means not entering into military alliances or taking sides in a great-power rivalry. By contrast, hedging in foreign relations requires taking risks in cultivating close ties with one power to accrue certain benefits while concurrently trying to minimize those risks by developing ties with an opposing power.

Economic pragmatism drives much of Indonesia’s approach to Beijing. China is not just Indonesia’s largest trading partner but also its second-largest foreign investor. In recent years, Chinese loans have funded ambitious infrastructure projects, such as high-speed trains, power plants, and smelters. Indonesia has benefited from China’s Belt and Road Initiative, its vast infrastructure investment program, and the China-led Asian Infrastructure Investment Bank. The two governments agreed to a “strategic partnership” in 2005 that was upgraded to a “comprehensive strategic partnership” in 2013, and Indonesia and other members of the Association of Southeast Asian States also engage with China through various regional mechanisms facilitated by ASEAN.

Jakarta will refuse to pick a side in any contest between Beijing and Washington.

At the same time, Indonesia’s defensive military posture has changed in light of China’s growing regional ambitions. A flash point has emerged around Indonesia’s Natuna Islands, which sit in the southern edge of the South China Sea. Chinese provocations near these islands, including the incursion of fishing boats accompanied by Chinese coast guard vessels into waters claimed by Indonesia, have spurred stern rebukes from Indonesian officials and the dispatch of warships and soldiers to the area.

For much of the twentieth century, Indonesia’s military posture was heavily inward-looking, bent on suppressing internal threats. That has changed in recent decades as Indonesia has steadily increased its defense budget to modernize its military, with considerable investment in its air force and navy, and as China has grown more aggressive in the region. To that end, Indonesia has welcomed greater coordination with the United States. In August 2021, Indonesian and U.S. forces carried out their largest ever bilateral joint exercises, involving well over 3,000 soldiers. The following year, a new exercise involved over 4,000 troops from 14 countries, including all the members of the security partnership known as the Quad, which features Australia, India, Japan, and the United States. Since 2021, the United States has funded the construction of a maritime training center in the Indonesian island of Batam, strategically located at the southern entrance of the Strait of Malacca, to support the Indonesian Sea and Coast Guard.

With this balance of economic, diplomatic, and security ties, Indonesia has tried to avoid dependence on a single country. It also seeks to assert itself as a middle power, capable of convening states, mediating disputes, and setting agendas in regional and international forums. The size of its economy has won it entry into the G-20. As the association’s largest member, Indonesia is generally regarded as the natural leader of ASEAN, and the group is headquartered in Jakarta. Through ASEAN, Indonesia wants to ensure the region’s strategic autonomy. And it hopes for greater stability in Southeast Asia and the Indo-Pacific by including major powers in the diplomatic architecture of the region. For instance, at the formation in 2005 of the East Asia Summit, an association of key Indo-Pacific countries, Indonesia insisted that membership of the group be widened beyond East Asian and Southeast Asian countries to include Australia, India, and New Zealand, thereby preventing the EAS from being dominated by China. The United States and Russia also became members of the EAS in 2011. Similarly, in 2018, Indonesia proposed an initiative called the ASEAN Outlook on the Indo-Pacific as a counter to the various Indo-Pacific frameworks put forward by other countries. By contrast to the official U.S. vision for a “free and open Indo-Pacific” and its zero-sum mentality of competition with China, Indonesia’s version, which was launched by ASEAN in 2019, underlines the importance of ASEAN-led regional mechanisms that are inclusive and promote habits of dialogue.


Indonesia’s presidential election has revealed only small differences between the candidates when it comes to foreign policy. In his previous two presidential campaigns against Jokowi, in 2014 and 2019, Prabowo presented himself as a hypernationalist, railing against the foreign exploitation of Indonesian natural resources and, in particular, China’s growing penetration into the Indonesian economy. Now, Prabowo styles himself as Jokowi’s successor; he has stressed the importance of having good relations with both the United States and China, describing the countries as great civilizations that have contributed much to the world. For his part, Anies has criticized Jokowi’s transactional foreign policy record, with its emphasis on winning foreign investment; he has nebulously promised to pursue a more values-based foreign policy and to ensure that Indonesia will play a more active role on the global stage, which Jokowi largely shied away from. Compared with the other two candidates, Ganjar is much more focused on domestic issues; he sees foreign policy principally as a tool for advancing Indonesia’s economic development. The three candidates also have minor disagreements about ASEAN—Ganjar has been critical of the body for its inefficient decision-making process—but they are all committed to adhering to the country’s traditional free and active foreign policy and nonaligned stance. None of the presidential candidates seems especially preoccupied by Indonesia’s place in the rivalry between China and the United States.

There are of course internal debates among the country’s elite about which way Indonesia should go, but elite attitudes regarding the country’s foreign relations, particularly with the major powers, have been relatively constant since the early days of independence. The long period of Dutch colonialism, the short but brutal Japanese occupation during World War II, and the great political instability of the early years of independence that was exacerbated by the interventions of external powers—notably the United States and China—have left deep suspicions of the intentions of great powers. Indonesians fear that others covet their country’s vast resources and strategic location. Although Indonesia has to depend on more advanced and richer countries for its development, there is a general consensus that Indonesia must not become dependent on any one country but must diversify its external engagements, such as when it comes to obtaining loans or purchasing military equipment, with the ultimate goal of becoming more self-reliant.

Support for Palestinian statehood has always been a feature of Indonesia’s foreign policy.

Some Indonesian elites still have negative feelings about Washington despite the warming security ties of recent years. As the world’s largest Muslim-majority country, Indonesia was critical of the way that the United States conducted the so-called war on terror and strongly opposed the U.S. invasion of Iraq in 2003. Support for Palestinian statehood has always been a major feature of Indonesia’s foreign policy. The United States’ seemingly unconditional support for Israel, with which Indonesia will establish formal diplomatic relations only when an independent Palestinian state is established, has rankled elites in Jakarta. The devastating Israeli retaliation against Hamas’s October 7 attack has further tarnished the image of the United States among Indonesians.

Despite those misgivings, most Indonesian elites have no interest in aligning with China. They remain committed to autonomy in the country’s orientation. As a result, the election will have little bearing on the trajectory of Indonesian foreign policy, particularly with regard to the major powers and the use of ASEAN to help manage relations with those powers with the larger aim of ensuring the region’s independence. Learning from the experience of the Cold War, ASEAN member states have no desire to see the region again become a proxy battleground for great-power tensions, nor do they want to choose between the two superpowers. Picking between China and the United States would only sow division among the member states of ASEAN, undermining the relative peace, stability, and prosperity that the region as a whole has enjoyed in the decades since the collapse of the Soviet Union.

The return of great-power rivalry and the resulting uncertainty in the region has made Indonesia’s traditional free and active foreign policy doctrine and its adherence to the principle of nonalignment all the more important. But the country won’t just be a bystander. The rivalry between the two superpowers will encourage Indonesia to play a more active role in the region, crafting a web of diplomatic groupings and partnerships that will help Southeast Asia—and even the wider Indo-Pacific—avoid polarization. Stability, Indonesia knows, lies not in picking sides but in taking as many as possible.


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