Introduction

Indonesia’s political landscape is experiencing a significant shift that subtly leans towards increased military engagement in civilian affairs.

Following Prabowo Subianto’s election as president, Tentara Nasional Indonesia (TNI) has become a more visible and constant presence in a multitude of areas, including economic development and political process.

TNI’s role under the current government has expanded beyond traditional defence duties and into civilian matters, as will be explored below.

Although such may also be interpreted as TNI’s support for the government’s affairs, its consequences are significant. This is because such activity transcends TNI’s conventional role as the security provider and affords it an opportunity to participate in the state’s governing process.

This is not new. The military was a primary force in Indonesia’s politics during former president Suharto’s New Order regime, during which it incorporated the concept of dwifungsi (dual role)in security and governance. Reformasi, however, facilitated the segregation of the military from civilian government, a process that is often colloquially referred to as “going back to the barracks”.

However, developments in recent years suggest that the military is returning to political centre stage.

TNI’s Growing Prominence: From Jokowi to Prabowo

Prabowo’s military background and connection profoundly define his identity as a political actor. It plays a big role in how Prabowo’s administration is using his military background to strengthen TNI’s role in Indonesia’s political and social landscapes. Following former president Joko “Jokowi” Widodo’s co-optation of Prabowo as defence minister in 2019, this became even clearer.

During Jokowi’s administration, military personnel were assigned to various civilian administrative roles and non-traditional activities, including disaster relief, infrastructure development, and social programmes. Jokowi highlighted that, notwithstanding the expanded responsibilities, the military’s primary role remained on counter-terrorism, maritime security and national development.

Concurrently, Kepolisian Negara Republik Indonesia (Polri) emerged as the main security entity, capitalising on robust political affiliations. During this period, Polri frequently aligned itself with political figures and entities, at times becoming embroiled in political disputes to suppress opposition or dissent.

For instance, even after leaving office, Jokowi allegedly instructed Polri’s inspector general to lobby the senior officials of Partai Demokrasi Indonesia Perjuangan to keep him and his family within the party. Compared to Polri, TNI exhibited a notably restrained presence in the political sphere, keeping itself mostly in the background, though occasionally emerging above the surface.

This arrangement is shifting under Prabowo’s leadership. TNI appears to have a more prominent role in certain areas, including food security and regional elections.

The establishment of agricultural battalions exemplifies this, with 100 new military units being formed to manage national food security initiatives.

This activity, which was spearheaded by Prabowo during his tenure as Minister of Defence, assigns the military with the responsibility to develop agricultural initiatives, such as the food estate scheme in Central Kalimantan that became contentious.

Regardless, this indicates a considerable expansion of TNI’s role in the areas of economics and development.

Another example is TNI’s participation in the logistics of the recent regional head elections. All three of TNI’s forces deployed their personnel and assets – such as aircraft carriers, helicopters and warships – to distribute election materials like ballots and boxes.

The initiative to integrate troops into regional government activities demonstrates the growing relationship between military forces and civilian governance. These measures indicate TNI’s expanded role in state-building efforts, wherein the armed forces participate in the nation’s economic and political processes while simultaneously safeguarding the state.

Public Perception: Indifference, Confidence or Acceptance?

A significant part of TNI’s seeming resurgence is the lack of considerable popular opposition. In contrast to the events during reformasi, where the people united to oust Suharto and consequently pushed the military away from the political scene, the present shift appears to have largely escaped significant examination or scrutiny.

Despite some instances of dissent, the general populace seems largely indifferent or, in certain instances, are endorsing the military’s expanding influence.

A variety of factors contribute to this societal attitude. Firstly, Indonesia’s historical backdrop influences the people’s perception of TNI, often laced with a romanticised sense of respect and yearning for them to be put in charge.

In contrast, the police have not played a significant role in the national heroic narratives and are oftentimes embroiled in cases of corruption or power abuse. Clashes between the police and the public are also quite frequent.

A portion of the population, including those residing in the regions, continue to view TNI as a crucial, stabilising entity that provides security and order in a nation troubled by regional disparities, economic inequalities and unceasing political turmoil.

Secondly, Prabowo’s portrayal of himself as a decisive and dynamic leader may have distracted the public from the fact that TNI is slowly returning to the centre stage. There is also a potential that the public will dismiss this concern as long as Prabowo remains in the driving seat, becoming a somewhat balancing force against TNI’s expanded role.

Unlike Jokowi’s bureaucratic and technocratic approach, Prabowo projects a straightforward, assertive yet populist image, appealing to a population that heretofore felt disconnected from the political process. His approach resonates with those who see him as a leader, someone who acknowledges their challenges and is actively addressing them.

However, it would be erroneous to think that the people’s lack of rejection towards TNI’s return indicates a complete endorsement of the military’s expanding authority.

Some quarters of the population might not grasp the direct and indirect consequences of TNI’s increasing presence. Besides, they may also consider it as an unavoidable compromise in a country grappling with economic and security issues.

Regardless, the absence of strong public debate and critical discourse surrounding these developments is concerning, indicating that the nation is slowly becoming desensitised to the military’s participation in governance.

A New Dwifungsi?

This shift necessitates a review of the status of democracy in Indonesia. Local NGOs and international human rights organisations alike have consistently warned of the danger of diminishing democratic space in the country.

To be fair, this shift does not directly signify a decline in democracy in Indonesia. Nonetheless, it indicates a transition to an era where coercive power may feature more prominently in day-to-day business, owing to the military’s presence being interwoven with the governance structure.

The military’s growing presence in critical dimensions such as food security, regional politics and electoral processes indicates that it is ready to be involved in sectors outside its traditional mandate.

This blurring line between the military and civilian spaces is not necessarily a throwback to Suharto’s dwifungsi in the New Order era, but something that is uniquely Prabowo’s in nature. Besides, we are still only in the beginning of Prabowo’s administration – how this dynamic would change or develop in the future remains to be seen.

Some portents are suggestive of how this would unfurl, however. Firstly, Prabowo’s Red and White cabinet features the largest numbers of TNI and Polri retirees in the nation’s history. Secondly – and this is more symbolic than substantial – Prabowo sent almost all his cabinet members to a three-day boot camp at the military academy in Magelang after the inauguration, where they were draped in military garbs and taught discipline courses.

Unlike the New Order era, which explicitly integrated the military with civilian politics, Prabowo’s strategy thus far indicates a more nuanced approach, wherein TNI plays a crucial role in several pockets of government affairs.

All these suggest TNI’s relative progress back into the centre stage, blurring the line between military and civilian affairs.

Conclusion

This development requires considerable attention. The increasing military engagement in food security and regional elections also indicates the shrinking role of civilian authority in these areas. If this trend continues and expands to other domains, it might jeopardise fundamental democratic principles like accountability, checks and balances, and civilian oversight.

The public’s indifference – or implicit endorsement – of this shift intensifies the problem. As indicated above, a number of Indonesians view the military as a stabilising force. Yet, further studies should be conducted to investigate what this means to their perception of democracy in Indonesia. The nation finds itself at a pivotal moment, necessitating careful examination by both the populace and the global community regarding the possible lasting effects of TNI leaving the barracks. Without careful vigilance, Indonesia could veer toward a path that undermines its democratic ideals, all under the guise of stability and security.

Part of an ongoing article series on Indonesia’s regional elections 2024.

Introduction

Indonesia’s Pemilihan Kepala Daerah Serentak 2024 (2024 Simultaneous Regional Head Elections – Pilkada) was meant to be a demonstration of Indonesia’s decentralization and commitment to classic democratic values.

Pilkada was indeed touted as the crown jewel of the post-1998 reformation era, especially with regard to local governance, a pluralistic hierarchy of leadership and the representation of the various interests of Indonesia’s sprawling archipelago.

Yet, this past Pilkada has exposed a worrying decline of democratic norms. What was meant to be an instrument for the people to exercise their political rights ended up being an avenue for power accumulation, dynastic clientelism and oligarchic hegemony.

Power Accumulation

To demonstrate this, let us turn our attention to President Prabowo Subianto’s oversized coalition Koalisi Indonesia Maju (the Onward Indonesia Coalition – KIM).

KIM was formed during the 2024 presidential election from political parties supporting Prabowo’s bid to run for the presidential office. The coalition consists of Gerakan Indonesia Raya (Gerindra), Partai Amanat Nasional, Golongan Karya, Partai Demokrat and other parties that did not make it to the House of Representatives.

KIM further inflated and became KIM Plus when several more parties – including Partai Nasional Demokrat, Partai Kebangkitan Bangsa, Partai Keadilan Sejahtera and non-parliamentarian Partai Persatuan Pembangunan (PPP) – joined its rank for Pilkada.

Such an oversized coalition underscores ambition to implement political hegemony across Indonesia.

KIM Plus has a wider support base, politicizing local elections into nothing more than extensions of national politics. This centralization of power has rendered Indonesia’s political landscape more homogenized and centralized, thereby undermining the independence and plurality of local governing institutions.

Furthermore, it also threatens the diversity and creativity that have long been the hallmarks of Indonesia’s democratic and decentralized framework, as it marginalizes local voices and stifles innovation in governance.

In this year’s Pilkada, KIM Plus candidates won in 60% of the areas contested. This presents a concern, as regional elections, which were originally intended as a pathway for local self-determination, instead became an opportunity for political elites in Jakarta to entrench their power.

Allegations of active interference – “cawe-cawe” in former president Joko “Jokowi” Widodo’s parlance – began circulating in the days leading up to the elections. Reports collected until October 2024 show that gubernatorial candidates Ridwan Kamil-Suswono (Jakarta), Andra Soni-Dimyati (Banten) and Ahmad Luthfi-Taj Yasin (Central Java) were explicitly endorsed by both Jokowi and Prabowo.

A letter signed by Prabowo, for example, requesting Jakarta voters to support Ridwan Kamil, was published a few days before the election during masa tenang (cooling-off period), a time when campaigning is prohibited.

The move was later clarified by a Gerindra executive as a reasonable campaign strategy, despite major legal and ethical concerns involved. This is despite the Indonesian Election Law (UU No. 10/2016) prohibiting government personnel from campaigning while in office unless on official leave.

Such action, thus, blurs the lines between Prabowo the president and Prabowo the political actor. It violates the concept of neutrality and opens the door for further tampering in future elections.

The General Election Supervisory Agency (Badan Pengawas Pemilu – Bawaslu) has rejected claims of tampering due to a “lack of evidence”. Unfortunately, however, Bawaslu’s inaction has stoked popular mistrust.

Critics contend that Bawaslu’s position could result from political pressure, a lack of institutional autonomy or even an effort to keep appearances of stability against mounting public mistrust. This begs the question about the susceptibility of ostensibly objective bodies to outside influence, especially in a political environment progressively controlled by centralized power.

What made the process even less credible was the deep involvement of Jokowi in Pilkada. Though he is out of the office, Jokowi reportedly encouraged Prabowo to endorse candidates linked to his political dynasty, such as Luthfi-Yasin in Central Java.

The strategic alignment between Jokowi and Prabowo represents an alarming consolidation of power in the hands of Jakarta’s political elites, forming a political system that favors their interests and disregards the needs and aspirations of the regions.

Moreover, this dynamic undermines power decentralization that has allowed diverse regions to determine their development path, creating a homogenized political make-up in which power radiates out from the center (i.e. Jakarta).

The backstep to centralistic governance is particularly harmful to Indonesia’s democracy, given its experience with decentralization in post-reformasi era and given the country’s vast diversity.

Indonesia is a pluralistic country with differences in geography, culture, economy and regional needs. This diversity helps democracy thrive, fostering a marketplace of ideas and competition, as well as ensuring that policies are tailored to the needs of local communities. Moreover, regional autonomy has allowed local leaders to create solutions tailored to their goals.

Such a political space could potentially diminish after this Pilkada, as its results (i.e. KIM Plus’ victory in 60% of areas contested) could pave the way for a forced uniformity for the regions. The regions’ unique aspirations may be drowned out by the political interests of the Jakarta elites, who may seek to profit from their power accumulation or win future political contestations.

Tampering

Another popular narrative in this Pilkada is the misuse of government funds, colloquially known as politik gentong babi (pork-barrel politics).

It has been demonstrated that local leaders were mobilized to win votes for the contestants, such as what happened in Central Java. For instance, 90 village heads were gathered in a fancy hotel in Semarang, where they were reportedly lobbied to support certain candidates for the gubernatorial election.

Moreover, the Village Fund has been “weaponized” to compel village heads to obtain votes for certain candidates in exchange for its continued flow of funds, such as what happened in South Halmahera.

This is why oversized, concentrated powers such as KIM Plus could undermine democracy, as such coalitions could easily utilize state funds and resources to achieve political targets.

Social assistance programs were exploited too. In North Sumatra, where Jokowi’s son-in-law Bobby Nasution ran for governor (and won), some alleged politicization of social assistance that help him win. Similarly, in Surakarta, the KIM-supported Respati Ardi-Astrid Widayani pair allegedly distributed basic food aid during the pre-election lull.

Although Bawaslu has declared that no violation was committed in these instances, the indication of the candidates’ blatant exploitation of the social welfare programs cannot be ignored. By weaponizing public resources for political campaigns, the political elites have reduced Pilkada to contests for wealth and power, rather than a legitimate avenue for the region’s self-determination process.

Dynasties in the Region and Jakarta’s Exceptionalism

To make matters worse, dynasty politics has further entrenched oligarchic networks in Indonesia’s democracy. In this year’s Pilkada, more than 605 candidates were linked to political dynasties, double the figures from the previous two Pilkada cycles.

Those involved in dynasty politics today are local franchisees of national coalitions that exchange loyalty for access to power. This trend, as well as the acceptance of Jakarta’s political elites towards such practice, turns Pilkada into a mere appendage of the power struggle in the center which ultimately erases local autonomy.  The Bobby Nasution-Surya and Respati-Astrid pairs are some such examples.

Yet, the outcome in Jakarta presents an entirely different dynamic. The Pramono Anung-Rano Karno pair, who were backed by Partai Demokrasi Indonesia Perjuangan, managed to clinch a win against KIM Plus’ candidates Ridwan Kamil-Suswono.

Their successful campaign cleverly leaned on Rano’s cultural resonance as well as alliances with former governors Anies Baswedan and Basuki Tjahaja Purnama, which helped bridge ideological divides.

Still, Jakarta’s exceptionalism only highlights a basic truth: That Pilkada has lost its identity as a platform for grassroots politics and become an opportunity for a power grab by Jakarta’s elites.

The similarities between this year’s Pilkada and the last two presidential elections are concerning. Both relied on the misappropriation of public resources (some cases are still alleged), intervention by the sitting president and mobilization of institutions to deliver the desired political outcome.

Such strategies undermine public confidence in democratic institutions and are reminiscent of the New Order’s heavy-handed measures to maintain power. Despite the post-reformasi aspiration for democracy, Indonesia’s state today has increasingly become homogenous and centralized, while authoritarian practices are becoming more common. The absence of a pluralist system that respects differences and regional autonomy diminishes dissenting voices and alternative ideas.

Conclusion

The results of the 2024 Pilkada are nowhere near rosy for Indonesia’s democracy. With KIM Plus-backed candidates winning in 60% of the contested area, a centralized form of governance appears to be coming back to Indonesia’s political setting.

Once a trademark of the reformasi era, Pilkada has now become an avenue for political elites to consolidate their power, as the governance practices become more homogenous and centralized, thus marginalizing innovation and regional needs.

The developments surrounding Pilkada have thus threatened Indonesia’s democratic future, dampening the expectation for further democratic consolidation in the next five years. Without alternative angles and adequate representation, Indonesia is bound to have an outdated and disconnected governing system that will not serve its people.

Introduction

Indonesia’s Foreign Minister Sugiono declared Indonesia’s interest in becoming a member of the Brazil, Russia, India, China and South Africa (BRICS) grouping. According to him, this is an exercise of Indonesia’s bebas aktif (independent and active) foreign policy approach.

Many view this move as an opportunity for economic growth and diversification. However, a closer look raises a crucial question: Are the potential benefits worth the risks?

There are significant opportunities and risks. Beyond the promise of wider market access, Indonesia’s alignment with BRICS could strain its relationships with key Western partners and even limit economic opportunities with traditional allies.

To maximize national interest, the government must carefully weigh whether a BRICS membership genuinely advances Indonesia’s economic goals or risks isolating it from existing engagements with Western economies.

Economic Opportunities

President Prabowo sees BRICS as a path to expand Indonesia’s economic alliances, offering new markets, investment sources and more autonomy from traditional Western partners. BRICS countries make up around 30% of the global economy and represent 43% of the world’s population, driven mainly by China and India.

This substantial market size and consumer base underline the organization’s potential influence as a global economic force. In 2022, BRICS countries contributed US$9.25 billion in FDI to Indonesia, or 21.2% of its total. Given its existing economic relations with these countries, Indonesia’s participation may bolster its export-orientated economy by diminishing tariffs and other non-tariff barriers.

Prabowo is also advocating for Indonesia to embrace the BRICS bilateral currency exchange initiatives to strengthen trade amidst global financial volatility and lessen its reliance on the US dollar.

Moreover, reducing reliance on Western economies appears aligned with Prabowo’s nationalistic stance. Indonesia is seeking increased independence and resilience in the face of global economic instability. Given its strong connections to Western markets, diversifying Indonesia’s economic portfolio is a necessity, which can be done by engaging BRICS countries.

To illustrate this, the United States is Indonesia’s second largest export destination, with US$23.28 billion in commerce in 2023. Therefore, a BRICS membership has the potential of diverting Indonesia’s strong economic relationship with the West, provided strong economic activities between Indonesia and BRICS countries can be fostered.

Indonesia’s natural resource wealth can be an attractive point for other BRICS members. In 2023, Indonesia was the world’s largest palm oil exporter, producing 47 million metric tonnes of crude palm oil, thereby meeting 54% of the global demand and generating US$23.97 billion in revenue. In addition, Indonesia is the fifth largest coal producer and possesses substantial nickel as well as other mineral reserves that are essential for modern technologies. These make Indonesia an attractive potential member in the perspective of BRICS countries.

Joining BRICS would afford Indonesia greater opportunities to increase exports and maximize profit from investment projects in its natural resources. As per the government’s data, Indonesia’s export value stood at US$258.82 billion in 2023, a figure that might further expand if Indonesia could tap the potential of the BRICS markets.

While Indonesia can benefit from its resource industry, there is also a strategic imperative to reduce overdependence on it. A membership in BRICS could help Indonesia attract foreign investment into non-resource sectors, thus creating a more balanced and resilient economy.

Unlike historical exploitative practices by Western countries or even China itself, which have often involved one-sided agreements that benefit foreign powers at the expense of local economies, Indonesia must negotiate terms that protect its economic interests. The varied economic interests of BRICS members can create opportunities for Indonesia to negotiate deals that are mutually beneficial rather than exploitative.

Besides, BRICS consists of a diverse group of countries that have different economic systems, political ideologies and development strategies. Many BRICS nations, including Brazil and India, have demonstrated a commitment to sustainable development. Indonesia can advocate for agreements that prioritize sustainable practices, promoting its own environmental and economic goals while engaging with other BRICS countries.

Economy vs. Autonomy

While BRICS offers promising economic opportunities, Prabowo’s administration is tasked with managing the potential complexities of such an accession. China and Russia have enhanced their geopolitical influence through economic alliances. Given its non-alignment policy, Indonesia must remain vigilant to prevent the erosion of its sovereignty that might transpire from its closer engagement with BRICS countries.

In other words, Jakarta should carefully manage its economic relationships within BRICS to maintain policy independence and avoid overreliance on a single partner.

The decision to accede to BRICS suggests a willingness to participate in a “revisionist” group. BRICS countries, such as China and Russia, are known for their efforts to reorganize international norms and institutions to reflect a multipolar power structure. They also seek to challenge the Western-established global order.

Prabowo considers that Indonesia is capable of placing itself on the world map in a multipolar setting; however, the journey is accompanied by a lot of risks.

Indonesia has not taken any sides in international conflicts, but being part of the BRICS block can change this scenario. The aspirations of the BRICS countries to create a third or even a fourth currency system may lead to a head-on collision with Western countries. Such a position from the bloc, which openly seeks to revise the global order and financial system designed by the West, poses a danger to Indonesia’s ties with other Western countries.

The threat is not only limited to the Western links. For quite some time, Indonesia was able to make inroads in Southeast Asia owing to its policy neutrality. This has enabled Indonesia to take on the leadership roles of the Non-Aligned Movement (NAM) as well as ASEAN. By virtue of ASEAN’s non-alignment, Indonesia is able to exercise strategic independence and manage relations with the Western and BRICS countries in a balanced manner.

However, a BRICS membership may also raise questions among other ASEAN Member States (AMS). It may signal that Indonesia seeks to diversify its attention away from ASEAN, which ironically may weaken ASEAN’s unity, cohesion and capacity to assert its centrality vis-à-vis global affairs.

While BRICS promotes trade cooperation, Indonesia may face challenges from member countries, particularly China, as they would also seek to compete with Indonesia’s domestic market.

This is evidenced by recent events. The large volume of Chinese imports into Indonesia has had a negative impact on both the Indonesian manufacturing and textile industries. Many local companies have been put out of business because of the adverse effects of Chinese products, which are too cheap to compete against.

It is still possible for Indonesia to see more imports from BRICS, though this would entail creating more uncertainty within its domestic market. Therefore, it is essential for Indonesia to promote the establishment of equitable trade norms within BRICS to ensure fair competition and avert dumping practices, or the sale of commodities at excessively low prices.

Indonesia’s most recent experiences with Chinese investment are noteworthy. Under President Joko “Jokowi” Widodo, Indonesia’s economic initiatives were significantly influenced by Chinese investments, particularly in the downstream processing of nickel.

There has been criticism that 41% of Chinese investment goes to metal processing companies that are environmentally harmful. In addition, many Chinese-operated nickel smelters in Indonesia have free foreign exchange agreements to allow the transfer of revenues back to China. Such agreements limit Indonesia’s economic gain, considering it also plays a role in processing the nickel exports.

These examples demonstrate the urgency to implement stringent regulatory criteria when engaging BRICS countries to guarantee that foreign investments contribute rather than incurring losses to Indonesia’s economy and environment.

Prabowo’s administration must assess the symbolic and substantive value of BRICS. Indonesia’s accession to BRICS may turn out to be theatrics without sound strategies and policy measures. Besides, membership in one more international economic association does not, as practice shows, automatically accord economic benefit. Additionally, its membership in BRICS may be nominal, as it could be unproductive participation that only drains effort and resources when the domestic economies are weak.

Instead, the new administration needs to address the weak points of Indonesia’s economy and enact policies that could protect it from unfair trade as well as investment practices.

Balancing Ambitions

The government’s plan to join BRICS must incorporate a strategy that focuses on bolstering the Indonesian economy, the independence of its diplomacy and its regional power. Indonesia needs to be able to continue exercising its non-alignment policy but wrest the economic opportunity offered by BRICS. Furthermore, Indonesia must intensify its engagement with AMS, pursuing policies and projects that prioritize intra-ASEAN cooperation to stave off any potential undue influence emanating from BRICS countries.

Moreover, Indonesia must stay true to its strategy of putting its eggs in multiple baskets. Indonesia can seek to enhance its trade agreements not just with BRICS but also with key partners like Japan, South Korea and Australia. For instance, Indonesia could negotiate a multitiered trade agreement that allows for preferential tariffs with AMS and these partners while also facilitating trade with BRICS countries.

Conclusion

The strategic entry of Indonesia into BRICS is a complex decision that will put Prabowo’s ability to reconcile economic ambition and Indonesia’s professed non-alignment position to the test.

By joining BRICS, Indonesia can enhance its exports, attract international investment and reduce its reliance on the US dollar. This progress, however, is dependent on Jakarta’s ability to contain the potential vulnerabilities that might come from the engagement, especially the political and economic challenges arising from an enhanced partnership with China and Russia.

Acceding to BRICS may boost Indonesia’s economic potential and its standing in the multipolar world order. However, such a step comes with its own challenges. Indonesia’s priority is to ensure that its domestic economy and environment will not be undermined by economic engagement with BRICS countries. Active and measured diplomacy must also be exercised. Indonesia must retain its non-aligned posture and anticipate shifts in global politics.

The bottom line is, Indonesia’s accession to BRICS must not come at the cost of giving up parts of its sovereignty and national interest.

Introduction

Since the Xi Jinping presidency started, China has undertaken major domestic monetary and fiscal reforms to maintain China’s centrality to the region’s economy. The Middle Kingdom may have faced an economic downturn lately, but its government has taken proactive steps to ameliorate the situation.

The latest pronouncements by the Chinese government regarding its economy are meant to strategically signal its resilience while also restoring market confidence from those in Southeast Asia and beyond.

China’s Economic Reform and Regional Opportunities

The 26 September 2024 session of the Political Bureau of the Communist Party of China Central Committee stressed the importance of such executive measures as cutting the reserve requirement ratio (RRR) and altering the mortgage rate. The Bureau deemed these necessary to stimulate the property sector and improve the financial outlook.

Such policy shifts are a realistic response to the regional context, opening opportunities for Southeast Asian countries such as Indonesia to deepen their engagement with China’s economy and seek out cooperative benefits.

The announcement that China will inject approximately 1 trillion yuan into the financial market and reduce the reserve requirement ratio by 0.5% underlines China’s intention to enhance liquidity and promote growth in the economy.

In a way, such measures aimed to reinforce the soundness of China’s financial markets and reassure its regional allies that Beijing remains committed to stabilize its economy irrespective of external and internal headwinds.

The effect of the policy was immediate and broad, as seen by the Shanghai Composite Index increasing by 4.59%, the Shenzhen Component Index increasing by 9.17% and the technology-biased ChiNext surging 17.25% after the National Day holiday reopening.

Joint trading volumes reached new heights, totaling 3.45 trillion yuan on the Shanghai and Shenzhen exchanges, surpassing the former high of 2.6 trillion yuan. This demonstrates the effectiveness of China’s regulatory reforms to restore investor confidence and increase economic activities.

Many in China must feel optimistic about the Chinese real estate market and for good reason. Beijing’s attempts to solve problems within the sector, which constitutes an essential part of China’s economy, include cutting the opening down payment for new residential mortgages from 25% to 15%.

These mortgages, which are expected to relieve loan burdens to around 50 million households and bring older mortgage rates up to the current standard, are predicted to save the country large amounts of resources, approximately 150 billion yuan annually. The significance of such crucial measures is also to help reverse the continuing decline of the real estate market within China.

By bringing back the property market, it has been reported that the primary goal the Beijing government seeks to achieve is enhancing the domestic economy. Most significantly, it creates the conditions for more effective regional economic integration since a strong economy in China is a powerful engine of growth for co-development with others in the region.

Complex Interdependence

Southeast Asia stands to gain considerably if China undergoes an economic revival. The revival of the A-share market has seen an increase in demand from foreign investors, which is likely to result in many investments in the Southeast Asian markets.

This is especially pertinent for countries like Indonesia, which has received Chinese FDI in the development of critical infrastructure. For instance, China’s intent to improve regional connectivity – which was demonstrated with projects like the China-Laos Railway – offers prospects for other investments that would enhance Indonesia’s trade and integration in the region.

China’s development of the town of Mohan – an important border site is situated in Yunnan province (a vital connecting point between China and Southeast Asia), underscores China’s pledge to promote regional economic development and joint progress. This development aptly exemplifies China’s openness to enhance economic relations with the rest of Southeast Asia.

Moreover, with its dominating position in the foreign trade, China has also emerged as an integral component in the regional economic system. The total volume of the foreign goods trade reached US$5.88 trillion in 2023, which means it accounted for 12.4% of the total global trade.

China has managed to retain its position as the most dominant trading nation in the world for the seventh year in a row and this only goes to reinforce its standing in terms of regional trade. Furthermore, with a service trade volume of US$933.1 billion, Southeast Asian countries have the capacity to gain economic benefits by engaging in a deeper trade relationship with China.

These figures show that there is still a need for countries such as Indonesia to engage themselves passively with China’s developmental strategies, such as the Belt and Road Initiative (BRI), which has the potential to increase trade volumes and create new markets.

The increasing economic ties of China with Southeast Asia may be understood in the context of the complex interdependence theory, which states that as states become more interlinked economically, socially and politically, the probability of conflict decreases because it is too costly.

This model helps us comprehend why it may be in the interest of some Southeast Asian countries like Indonesia to become more integrated with the Chinese economic model, which would, in return, enable the creation of a more constructive and harmonious regional context. By implementing an interdependence model, regional economies can avert risks of instability and promote joint growth, which ensures that all parties benefit.

Challenges

Nonetheless, developing more active economic engagement with China is not without problems. Greater economic engagement means that any policy shift or economic activities derived from China will have implications across the region.

For Indonesia, which is a major recipient of Chinese investment in key sectors such as infrastructure, manufacturing and real estate, this dependency poses hazards as variations in Chinese investments tend to import volatility to the local market and economies.

China has taken steps such as issuing extremely long-period treasury bonds as well as special local government bonds to help stabilize shocks to its financial and real estate markets. These measures indicate that China understands that its activities affect the economy of the region; Southeast Asian countries can rest assured that China is mindful of its potential pitfalls.

However, while the increased flow of Chinese capital into Southeast Asia is critical for meeting the financial needs of development projects, it can also imbalance the markets and stifle efforts to improve local capacity.

Therefore, Indonesian authorities are required to manage foreign investments, including foreign capital coming from China, to ensure that these investments are aimed at achieving sustainable development goals that will benefit its domestic economy.

Recent crises such as the crash in Indonesia’s textile industry – due to massive capital inflow and import of textile products from China – exemplify this concern. Such cases further underscore the need for Indonesia to erect some rules and regulations that could shield local industries.

Constructing a legal regime that encourages cooperative ventures and technological transfer would allow Indonesia’s enterprises to utilize Chinese capital in a more efficient manner, resulting in development without surrendering control of essential sectors and assets.

Strategic options for ASEAN and Indonesia

To deal with the economic resurrection of China, Indonesia and its ASEAN peers should take a more aggressive stance, allowing for deepened economic cooperation while diversifying their economic relations.

With shifts from primary commodity export reliance to developing core sectors such as manufacturing, technology and services, Indonesia could skillfully integrate itself within regional supply chains with China at the center.

For instance, rather than chiefly importing finished goods, Indonesia could aid in China’s production networks by establishing its own electronics and automotive components industries. Predominantly, this strategy would assist Indonesia’s economy by retaining more foreign earnings but majoring in the core activities of such industries.

However, to avoid being “swamped” by imported goods, Indonesia does require a framework of policies to aid domestic industries, especially in their formative stages including trade standards and promotion of sectors where it has a comparative advantage. Such strategy could attract more foreign investment into Indonesia and improve the country’s economic position. 

Central to this strategy is financial regulation and financial stability. Indonesian policymakers must concentrate on building sound financial institutions and laws that will adequately absorb the sudden influx of Chinese capital while reducing risks associated with volatile capital inflows.

Reinforcing its financial control and risk management policies will allow Indonesia to withstand almost any impact even after internal changes in Chinese policies.

There is a great need for ASEAN to pursue better economic integration with China. When bargaining with Beijing, especially in regards to the BRI, ASEAN ought to seek to remain true to the ASEAN centrality and encourage a more even distribution of Chinese investments around the ASEAN countries.

However, such commonality of purpose is not easy due to the very diverse political and economic structures within ASEAN. For example, Malaysia’s engagement with the BRI projects has demonstrated the extent to which such investment can be politicized which hampers ASEAN’s effort to voice out as a single entity.

To ensure ASEAN centrality vis-à-vis these complexities, the bloc could seek to focus on developing broad parameters, which would enable them to promote common interests within the region. This would guarantee a united regional position on engagement with China while ensuring that individual member countries are allowed the leeway to pursue bilateral deals that suit their domestic variables.

ASEAN Member States can leverage regional projects that foster infrastructure development, technological advancement and agricultural growth in a manner that is sustainable for the region. Such a position would enable these countries to engage China in a manner that is beneficial to them, alleviating excessive dependency on Chinese capital and promoting a coherent as well as cohesive regional economy in the process.

Conclusion

To sum up, as a result of recent changes in the strategies of the Chinese authorities, Southeast Asia and Indonesia have been presented with a new opportunity to enhance their economic relations with China while fostering their own economic advancement.

The region’s response should be neither too cautious nor too aggressive in order to augment its integration with China while improving its strategic stance. Since China’s economy is now poised to expand steadily, there is an opportunity for ASEAN to establish itself as a regional bulwark that focuses on regional economic progress and stability.

Introduction

President Joko “Jokowi” Widodo’s choice to forgo the 44^th ASEAN Summit – which took place in Vientiane, Laos, on 9 October 2024 – constitutes a strategic miscalculation that might deeply affect Indonesia’s regional stature and foreign policy aims.

As the largest member and de facto leader of ASEAN, Indonesia’s participation in the high-level event is crucial for steering the bloc’s direction, fostering unity and addressing common concerns among all members.

At a critical moment requiring Jakarta’s leadership, Jokowi unintentionally undermined Indonesia’s dedication to ASEAN by attributing his absence to domestic transitional factors.

Indonesia, ASEAN’s (Supposedly) De Facto Leader

The constructivist theory posits that state behavior is shaped by both their material capabilities as well as the values and norms they aspire to project and embody.

Indonesia’s sustained role as the de facto leader of ASEAN is predicated on its active engagement, influence and commitment to the collective norms and ideals of the region. This is because norms and ideas about leadership are established via ongoing actions and interactions.

This is also evidenced through the pivotal role Indonesia has played under Jokowi’s administration, influencing the overall trajectory of the ASEAN through its advocacy for initiatives such as the ASEAN Charter, the ASEAN Outlook on the Indo-Pacific (AOIP) and the Five-Point Consensus concerning the Myanmar crisis.

These contributions profoundly influence ASEAN’s identity and strategic stance in recent times.

Furthermore, the constructivist perspective also posits that ongoing interactions and sustained engagement in diplomatic contexts influence the comprehension of leadership. For example, Jokowi’s participation in past summits enhanced Indonesia’s standing and emphasized the nation’s normative position as the primary catalyst of ASEAN.

The prevailing view of Indonesia as a reliable leader and guardian of ASEAN principles is thus threatened by Jokowi’s choice to abstain from the Summit. The dual nature of leadership – encompassing both authority and the preservation of credibility to exemplify effective guidance – suggests that this change in perception could hinder Indonesia’s ability to influence the agenda inside the bloc.

In light of Jokowi’s absence, Vietnamese Prime Minister Pham Minh Chinh conveyed his hope for Indonesia’s ongoing contribution to ASEAN’s development under the new administration’s leadership.

Even Prime Minister Sonexay Siphandone of Laos commended Indonesia for its historical achievements and recognized that Jokowi’s attendance would have bolstered the bloc’s cohesion in tackling regional concerns.

Such sentiments represent the heightened expectations of Indonesia’s ASEAN allies, rendering Jokowi’s absence even more significant.

Jokowi is also a prominent leader who has established contacts within the bloc—his absence has thus deprived Indonesia of an opportunity to reaffirm its leadership role and presence in the region.

This absence could potentially create a leadership gap, opening the door for other parties with differing or competing interests to assert themselves and shape the regional agenda in ways that might not align with Indonesia’s strategic goals.

While Vice President Ma’ruf Amin’s participation guaranteed Indonesia’s representation, the nation’s diplomatic stature was not on a level with that of other countries. Due to Ma’ruf’s insufficient expertise in international diplomacy, he was unable to effectively convey Indonesia’s influence and engage in critical discussions.

This is not the first time Jokowi has skipped international events. Foreign Minister Retno Marsudi has consistently championed Indonesia’s interests internationally, often compensating for the president when Jokowi prioritized domestic and political interests.

In the absence of the head of state’s direct involvement, even the most adept diplomat can achieve only marginal success in their diplomatic efforts. Indonesia’s foreign policy necessitates more than a mere assortment of activities; it demands sustained high-level engagement to ensure legitimacy and efficacy.

The Reason

The Foreign Ministry press briefing stated that Jokowi’s absence is due to his involvement in the power transition process, as Prabowo Subianto is slated to take over the presidency post later this month. However, this inadequately justified the choice to forgo such a significant gathering.

With more than a week remaining before Prabowo’s inauguration, Jokowi has more than sufficient time to complete all his outstanding obligations to ASEAN. His participation in upholding the legacy of his foreign policy and assuring ASEAN allies of Indonesia’s steadfast commitment would have been appropriate.

Jokowi’s decision to stay back thus eclipsed the objectives of his administration, leading many to question whether ASEAN was genuinely a priority for Jakarta during his tenure.

What This Means to ASEAN

The current situation in ASEAN renders this omission particularly noteworthy and troubling. The region is presently confronting multiple intricate challenges, such as the escalating rivalry between the United States and China, the humanitarian crisis in Myanmar, and repercussions from major conflicts in several parts of the world.

The leadership of Indonesia is crucial for guiding the bloc through what will seem to be several tumultuous years in the future. Under Prabowo’s administration, Jakarta must reaffirm Indonesia’s position as the regional anchor in order to maintain Indonesia’s proactive involvement and ensure continuity as well as stability within ASEAN.

The constructivist thesis also argues that Indonesia’s leadership role in ASEAN is dependent on both power dynamics and the norms and expectations of other nations regarding Jakarta. The normative authority of Indonesia is undermined if it fails to fulfil these expectations, thus obstructing the nation’s capacity to lead by consensus and secure backing for its initiatives.

Jokowi’s choice may inadvertently prompt other regional leaders to scrutinize Indonesia’s dedication to the collective ideals and principles of ASEAN, unbeknownst to him. Given that Indonesia – the conventional linchpin of ASEAN – may forgo participation in such a significant assembly, it is perplexing why other nations would feel obligated to attend every conference.

Worse, it might send the wrong signal that ASEAN high-level meetings are no longer worthy of its leaders’ time and effort, a significant blow to the multilateral process in Southeast Asia.

Moreover, it might trigger a broader concern with Indonesia’s foreign policy. Despite the administration’s focus on pragmatic diplomacy and economic development, it often lacks constructive engagement in regional and global issues.

For example, critics pointed out Indonesia’s lack of gusto in asserting pressure to stop violence in Myanmar, even as the country chaired ASEAN last year. This reflective viewpoint has strengthened the suspicion that Indonesia may have diverged from its conventional leadership role in the region, though deeper investigation is necessary.

Although Jokowi’s decision may yield short-term benefits to his political agenda, it undermines the nation’s global influence and reputation. This disengagement may have enduring consequences for the strategic significance of a nation seeking to establish itself as a middle power in Southeast Asia and the Indo-Pacific while expanding its economic influence in Latin America and the Caribbean.

Conclusion and Ways Forward

Indonesia’s involvement in ASEAN Summits and other regional fora should be regarded as essential platforms for the nation to assert its influence on the future trajectory of regional developments.

Jokowi’s absence jeopardizes Indonesia’s regional standing and somewhat weakens ASEAN’s unity in navigating a challenging geopolitical landscape, constituting a diplomatic misstep and a strategic error.

This is unfortunate considering Indonesia is gaining significance amid the intricate dynamics of the region, characterized by competition among major countries and domestic political instability.

The Indonesian authorities must acknowledge the imperative for a more assertive and engaged foreign policy to uphold ASEAN’s centrality as well as to ensure Jakarta’s prominence in regional leadership.

Only through unwavering engagement can Indonesia sustain its role as the cornerstone of ASEAN and a significant contributor to Southeast Asia’s growth.

With the transition to a new administration under Prabowo, Indonesia has a substantial chance to realign its foreign policy and restore its leadership role within ASEAN. Prabowo clearly comprehends the importance of regional and international ties, as evidenced by his broad diplomatic initiatives following his decisive political triumph.

Prabowo must prioritize fortifying Indonesia’s standing within ASEAN, championing initiatives to uphold regional tranquillity and ensuring that Jakarta remains a reliable leader and ally. In short, he needs to quickly ameliorate this reputational damage.v