India & Indonesia: A shared future

The forthcoming visit of Indonesian President Susilo Bambang Yodhoyono as the chief guest on Republic Day, January 26, 2011, should go beyond the ceremonial state-level visits of other dignitaries. Given that two decades have progressed since the initiation of India’s “Look East” policy in the early 1990s, our bilateral ties with the most

significant player in the region remain at a lower level than they should be. This visit by President Yodhoyono, the second since 2005, will have to move forward from the previous one during which the strategic partnership agreement was signed between India and Indonesia.
The commonalities that link India and Indonesia together are plenty — geographically, Indonesia is India’s closest maritime neighbour, just 90 nautical miles. The western most tip of the Sumatran island, Banda Aceh, is the closest to India’s eastern most outpost of Andaman and Nicobar islands.
While this geographical link is critical, there is a shared history as well. Both emerged in the post-colonial period as independent nation-states, though the early period of democratic politics in Indonesia gave way to a military rule, which lasted from 1965 to 1998, while India adopted a democratic polity which has sustained till date.
India and Indonesia also share ethnic, religious and racial diversity. India’s motto of “unity in diversity” finds resonance in the “binneka tunggal ika” philosophy enshrined as a principle of Indonesian state policy in its approach towards managing diversity and ethnic plurality.
The 2005 visit by Mr Yodhoyono initiated the strategic partnership agreement between the two countries, with a focus on increasing bilateral trade and cultural exchanges. In fact, the agreement targeted trade to the tune of $10 billion by 2010.
In 2006, the volume of trade between the two was $5.5 billion, while our current economic ties have expanded to the tune of $11.7 billion. In October 2010, the two countries finalised the Free Trade Agreement (FTA) in goods. Indonesia is the sixth country among the Asean (Association of Southeast Asian Nations) with whom India has signed a bilateral FTA.
Given the energy demands that India is facing in order to sustain its economic growth, Indonesia could become a vital ally. Approximately 47 per cent of India’s coal import comes from Indonesia. India is looking to offset this with imports in crude oil and natural gas. Under the India-Asean FTA, palm oil has been a major import for India. In the services sector, Indonesia looks to India for assistance in the fields of IT, healthcare and pharmaceuticals, even education. While the FTA in trade in goods will be beneficial to Indonesia, an agreement in services will be to India’s advantage given that India is ranked 9th in the global services sector.
On the political front Indonesia has become especially important since its transition to democracy in 1999, which is now in the process of consolidation.
The setback in Thailand and the opaqueness of Burma will continue to challenge the Asia-Pacific region, and it is in this context that Indonesia and the Philippines are going to be credible players as democratic allies in the region. For India, whose neighbourhood remains challenged with issues of democracy, there is need to look for political partners outside the South Asia region and in this context developing political ties with Indonesia will remain a key objective of our bilateral ties.
It is important to remember that the crux of India’s “Look East” policy remains economic relations, not so much political, strategic and security related aspects. While India is a player in several multilateral groupings within the region, the real depth of political and security level ties is lacking. For both India and Indonesia this will become a critical factor given the rise of China.
While currently the relations between Beijing and Jakarta are cordial, there is concern how China’s rise will impact the region. There is also fear that Beijing will play one regional power against the other, in its attempt to stay ahead. And this is a view that India shares.
India is being seen as a regional player and an emerging power whose economic rise will shape the region in the years to come. Indonesia, too, is once again being seen as a potential regional leader and it will be vital for India and Indonesia to further the promise of partnership between one another. As regional players in a changing Asian matrix, it will be imperative for these two states to partner with each other to ensure long-term political and security-related stability in the region.
At the global level there is an interesting development. The United States is simultaneously strengthening its ties with India in South Asia and with Indonesia in the Asean region. The pivot of the US’ integration with Asean is once again focusing on Indonesia, with increased military ties and also looking at Indonesian democracy within the context of the rise of Islamic politics. In fact, one of the debates that currently affect the India-Indonesia ties is the question of a permanent seat at the United Nations Security Council (UNSC). Both countries remain keen stakeholders in the reform and restructuring of the UNSC. There has been speculation that the US backing for India may cause strains in India’s bilateral ties with Indonesia. However, if there is political will on both sides, the realisation of the benefits of partnership will far outweigh the realpolitik debate.
Unlike the 2005 visit by President Yodhoyono, this visit needs to take place with a greater promise of
commitment to strengthening the bilateral ties. The strategic partnership needs to be enriched with more at the political and security levels.
India has looked at the Asia-Pacific region as a significant part of its foreign policy. In that, Indonesia should be the most critical player. As emerging powers in the uncertain future of a region that is in transition, India and Indonesia need to enhance their integration with each other.

Dr Shankari Sundararaman is an associate professor of Southeast Asian Studies at the School of International Studies, JNU

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