Meet southeast Asia’s rising star
Oct 10 2013
Indonesia is a cosmos in itself. With over 17,500 islands, the country straddles along more than one-eighth of the equator! In Bali, there lives the only Hindu majority population outside South Asia. On the main island of Java, many traces of former Hindu cultures remain. In the popular shadow puppet theatre, the stories of the Ramayana and Mahabharata have a central place. Being the country with the biggest Muslim population in the world, Indonesia has a constitution that guarantees freedom of religion. Six religions, Islam, Hinduism, Catholicism, Protestantism, Buddhism and Confucianism have official status.
Since ancient times, the islands of today’s Indonesia were known for their abundance of valuable spices. European and Arab seafarers and colonial expeditions, from the Portuguese to the Dutch, were ambitious to secure the sea-lanes to the fabled Spice Islands. Much later, in the 20th century, it was natural resources, in particular, coal and oil, that lured foreign powers to the Indonesian archipelago. Today Indonesia ranks 21st amongst the world’s oil producers.
Nobody doubts that in economic terms, the 21st century will be the Asian century. Recently people have also started to worry about Asia becoming the focus of future conflicts. It is not only the traditional rivalry between India and Pakistan or the regular tensions caused by the North Korean regime that put Asia on the map of geopolitical strife. The rapid rise of China’s economic, military and political might is causing widespread concern. Already the US has begun to reassign strong naval forces from the North Atlantic to the Pacific. Not only India, but Australia and Japan are also alarmed by increasing forays of the Chinese into the Indian Ocean.
In the South China Sea, a number of island disputes point to increasing conflict potential between the People’s Republic and a number of ASEAN countries. Indonesia is not amongst them, but it is obvious that straddling between the Pacific and the Indian Ocean, between south and east Asia, Indonesia is having a pivotal position in the emerging Asian conflict scenarios.
It is, therefore, not surprising that major powers are giving more attention to Jakarta. Recently, the new Chinese leader Xi Jinping made a state visit to Indonesia. Beijing is keen to expand its presence on the Indonesian markets, where a growing urban middle class is acquiring purchasing power for goods that China produces. At the same time, Beijing wants to assure Jakarta of its peaceful intentions in the ASEAN region. Japan, too, has recently expanded its presence in Indonesia. Soon after he had been elected as prime minister, Shinzo Abe visited Jakarta. At present, no month passes without a major Japanese company announcing substantial new investments in Indonesia. It is obvious that Jakarta is not disinclined to get more attention from Japan, not least as a counterweight to the Chinese.
Relations between Indonesia and neighbouring Australia have often been strained in the past. Jakarta rightly resented a condescending attitude of Canberra. Newly elected Australian prime minister Tony Abbott made it a point to make his first overseas visit to Jakarta. There are disagreements between the two countries concerning immigration, but the visit served to indicate the strong Australian desire to strengthen trade and investment. Canberra, too, has substantial strategic interests in the sea-lanes that lead through the Indonesian archipelago. Due to the present budget troubles, US president Obama had to postpone a planned visit to Indonesia. But there can be no doubt that Washington keeps a close eye on developments in Indonesia, which as one of the moderate Islamic countries, is of major geopolitical interest to the west.
There are concerns about the Indonesian currency as well. The rupiah, like the Indian rupee, had come under speculative pressure. Like India, Indonesia runs a current account deficit that is not sustainable in the long run. However, it would be totally wrong to compare the current troubles with the Asian crisis of 1997-98, which led to the downfall of the Suharto regime. Indonesia’s economy is much stronger today than it was 15 years ago. More importantly, Jakarta has embarked on a very successful course of political and institutional modernisation. President Susilo Bambang Yudhoyono will end his second term in 2014. Already very capable successors such as the mayor of Jakarta stand ready to jump into the fray of what promises to be another successful democratic election.
(The writer is the Far East correspondent of Swiss daily Neue Zurcher Zeitung)