As China moves to 'rescue'​ Indonesia, time for Australia to step-up

UPDATED FRIDAY 8TH MAY 2020

Two critical issues now facing Australia, due to the Covid-19 pandemic, are firstly our deteriorating relationship with China, and secondly the USA and it’s chaotic political leadership during this crisis, and the dramatic economic implications. These two outcomes will coincide with China probably becoming more belligerent and aggressive in a post Covid-19 world, leaving Australia even more politically isolated and economically vulnerable.

In this environment, Australia’s relationship with Indonesia, and also India, needs to be embraced and strengthened now. What complicates this important strategic objective however, is Australia’s relationship with Indonesia comes at a time when our northern neighbour faces both a health and economic calamity far greater than in Australia, and one that potentially could lead to financial upheaval and also social instability should food supplies - and particularly rice - become scarce.

As of 7th May 2020, Indonesia has recorded 12,776 Covid-19 cases and 930 deaths, but these official numbers have been derived from a testing rate of around 280 per one million people, compared with many nations, including Australia, with testing rates around 9,000-18,000 per million citizens. The governor of Jakarta, Anies Baswedan yesterday said that he believed the death rate in Jakarta alone is over 2,000, so therefore the conclusion can fairly be drawn that these official figures are significantly understated, and that Indonesia is just at the beginning of its long battle with Covid-19 along with its frightening economic consequences. 

A death rate of more than 150,000 people is a real possibility.

Meanwhile, as millions of Indonesians find themselves out-of-work, President Jokowi has announced a financial safety-net for those who need urgent government support. But with 100 million people earning less than $2.00 per day, trying to support all of Indonesia’s citizens affected by the economic fall-out is near impossible. In the province of West Java for example, that is home to 45 million people, only 2,500 citizens have so far received any government welfare payments. Indonesia desperately needs financial and medical support, but with Australia focussed on our own Covid-19 issues – and with our Department of Foreign Affairs battling to repatriate thousands of Australians still stranded overseas - there has been little time to consider the needs of our giant neighbour. 

In the past two weeks, Australia has recalled Gary Quinlan, our highly respected and experienced ambassador to Indonesia, for genuine health reasons. The message unfortunately, was seen as Australia wanting to abandon Indonesia in their time of need, along with most Jakarta-based journalists including those from the ABC, Fairfax and News Limited. The ‘abandonment’ view is incorrect, but at present perceptions are everything. 

China has already indicated it is ready to ‘rescue’ Indonesia, along with plans to reinstate tourist flights to Bali as early as June.

Fortunately for Australia, offers of help from China are often greeted by many Indonesians with scepticism due to a long-standing distrust and suspicion of ethnic Chinese. But president Jokowi is acutely aware of just how important China is right now as Indonesia's major importer, provider of tourists, and most importantly a huge financier of many large projects within Indonesia. China, with a close-eye on the US activities and future role in the region, will be keen to cultivate an even closer relationship with Indonesia, and Covid-19 provides an ideal environment in which to build greater trust between Beijing and Jakarta.

But where does this leave Australia?

In a post Covid-19 world, Australia will need to build on our current extensive, yet shallow, relations with Indonesia. We will need to substantially increase our military and border protection ties, including joint patrols, whilst resisting the temptation to reduce foreign-aid as part of our own budget repair mission, and to use these funds to build capacity within Indonesia’s public service administration, policing, health and security sectors. 

If Indonesia's economy falls into recession - and the likelihood of this happening is now very real - there will be a need for Australia to 'step-up' with financial support for Indonesia, and importantly to work closely with the Jokowi administration to ensure a continued stable food supply.The recently concluded trade agreement, known as IA-CEPA, will now officially come into effect on 5th July 2020. It provides an immediate and significant opportunity for a closer and stronger business and trade relationship between Australia and Indonesia with a focus on partnerships between our two countries that can include agriculture - with an urgent emphasis on food supplies - and also within the services, education, infrastructure and health sectors.

Australia cannot deal with a recalcitrant China alone. Nor can Indonesia. We need these ‘strangers next door’ like never before as along with India, Indonesia will be critical for not only our own economic progress, but importantly our regional security and stability. 

Australia has been good with the rhetoric about our relationship with Indonesia. ‘Less Geneva, more Jakarta’, may soon need to become, ‘A bit less Beijing, and a lot more Jakarta’, and this pandemic is surely going to test the sincerity and depth of these words, and also our mutual commitment to each other. 

Ross B. Taylor AM is the president of the Perth-based Indonesia Institute Inc.