SBY Cancels State Visit to the Netherlands

Indonesian President Susilo Bambang Yudhoyono was on board his jet at Jakarta’s Halim Perdanakusuma Airbase earlier today, about to depart for a state visit to the Netherlands, when he received word that an obscure Indonesian separatist group now in exile in the Netherlands had filed for an injunction in a Dutch court to have him arrested upon arrival. SBY disembarked from the Garuda airliner and announced to the press that he would cancel the visit.

For those keeping score at home, that’s two canceled visits to key partner countries– the United States, the Netherlands– in the space of a month. (Giving rise to some humorous suggestions that SBY was merely trying to beat President Obama’s record in this respect). http://www.spbo.in/

Reporting on Aceh, on the Interpreter

I apologize for the radio silence over the last month on Jakartica. I have been furiously trying to finish up some work before I leave Indonesia in a few days to return to the United States to complete my graduate studies, while battling a couple of tropical illnesses (no worries– annoying bugs, but nothing serious).

I have, however, been posting on the Interpreter, the blog of Sydney’s Lowy Institute for International Policy. The Interpreter sent Andrew Siddons and I up to Aceh late last month, where we interviewed local officials, aid workers, and residents on the complex situation there. Andrew and I both really enjoyed Aceh– it’s beautiful country, full of remarkably gracious and welcoming people, and home to some of the best coffee in the archipelago. The reconstruction of Aceh is a great success story, considering the totality of the conflict and destruction it suffered from 1976 to 2005. But success has raised expectations, and now Aceh faces many challenges.

The first post, looking at how the province’s former insurgents have been performing in their new jobs in government, can be found here. The second post, on the strange success of the peace process, absent actual progress toward a final agreement, can be found here. Andrew’s radio report can be found here. I will have a third post going up early next week, on the politics of religion in Aceh.

Mearsheimer on Indonesia’s Straits

The American scholar John Mearsheimer recently delivered a lecture at the University of Sydney. He spoke primarily about the rise of China and the implications of that rise for Australia. Because Mearsheimer is a traditional realist, in the international relations theory meaning of that term, he naturally told his audience to expect a great power rivalry between the United States and China at some point at least twenty years from now. In Mearsheimer’s view, Indonesia is an important venue in that contest– so important, that he suggests we could even see a PRC military presence on Indonesian soil in the years after 2030. He explains his thinking below:

China’s dependence on imported oil, which is already substantial, is going to increase markedly over the next few decades. Much of that imported oil will come out of the Middle East and most of it will be transported to China by ship. For all the talk about moving oil by pipelines and railroads through Burma and Pakistan, the fact is that maritime transport is a much easier and cheaper option. The Chinese, of course, know this and it is one reason why they are planning to build a blue water navy. They want to be able to protect their sea-lanes that run to and from the Middle East.

China, however, faces a major geographical problem in securing those sea-lanes, which has significant implications for Australia. Specifically, there are three major water passages that connect the South China Sea and the Indian Ocean. Otherwise, various Southeast Asian countries separate those two large bodies of water. That means China must have access to at least one of those passages at all times if it hopes to be able to control its sea-lanes to and from the oil-rich Middle East.

Chinese ships can go through the Straits of Malacca, which are surrounded by Indonesia, Malaysia, and Singapore, or they can go further south and traverse either the Lombok Strait or the Sunda Strait, both of which cut through Indonesia, and both of which bring you out into the open waters of the Indian Ocean just to the northwest of Australia. China, however, is not likely to be able to get through the Straits of Malacca in a conflict with the United States, because Singapore, which is closely allied with Washington, sits astride that passageway. This is what Chinese strategists call “the Malacca dilemma.” Therefore, China has a powerful incentive to make sure its ships can move through the two main openings that run through Indonesia.

This situation almost certainly means that China will maintain a significant military presence in the waters off the northern coast of Australia and maybe even on Indonesian territory. China will for sure be deeply concerned about Australia’s power projection capabilities, and will work to make sure that they cannot be used to shut down either the Lombok or Sunda Straits or threaten China shipping in the Indian Ocean.

I should mention that I don’t subscribe to the traditional realist school of international relations theory for a variety of reasons I will not get into on this blog. In this particular case, I think Mearsheimer’s conclusions are both overdetermined by geography and insufficiently aware of it– he neglects to mention the grave difficulty that the merchant marine has in navigating both the Lombok and Sunda Straits due to their dangerous current patterns and shallow features, difficulties that drive up maritime insurance costs dramatically and give mariners a strong incentive to avoid them.

But as the constructivist scholar Alexander Wendt says, “anarchy is what states make of it,” so to the extent strategic thinkers in Beijing, Jakarta, Canberra, and Washington find Mearsheimer’s arguments convincing, they will have an impact.

Which of These Is Not Like the Others

Josh Kurlantzick has a post up at Asia Unbound, the blog of the Asia staff of the Council on Foreign Relations, suggesting that we ought to be wary of the high growth numbers that many Southeast Asian economies are posting this year. He notes that this growth is export-based, and thus subject to the whims of external shocks like the East Asian Financial Crisis of 1997-1998 and the Global Financial Crisis of 2008-2009. He further notes the difficulties that governments in the region have had in spurring domestic consumption in order to diversify drivers of growth.

He is right about most of the countries he cites–Singapore, Thailand, and the Philippines (and I would add Malaysia to that list)– but he is mistaken to include Indonesia among the bunch. Indonesia is not like its neighbors in the region, in that it already boasts substantial domestic consumption numbers, numbers which sustained it through last year’s crisis with a 4.5% growth rate. (The rate was helped by robust spending on the legislative and presidential elections, which some economists suggested amounted to an astounding 1% of GDP).

In fact, Indonesia has the opposite problem: a dearth of foreign investment and exports. Conventional wisdom holds that export-focused investors have shied away from Indonesia for two reasons, corruption and its decrepit infrastructure. Intangibles like rule of law, sanctity of contract, and regulatory reliability– all things that are held hostage by this country’s endemic culture of corruption– matter to foreign firms. So, too, does the ability to reliably deliver a product, a capacity frequently diminished by inadequate infrastructure.

I recall a resources client I once worked for, in a previous life as a political risk analyst, which told our firm’s principals that after three months of regulatory obstruction and unreliable delivery, they were ready to just give up on Indonesia. No matter how much better the price of the ore coming out of the hills here was, the difference would be made up in the cost of delays and hiring consultants and lawyers to seek ways around those delays, or scrambling to find alternative sources at the last minute.

All this has made Indonesia a market of last resort for resources and in other exports, and is holding the country back from even greater growth. Tragically, few in power in Jakarta seem interested in changing the culture that has created the problem.