Indonesia: A Long Road to Regional Power Status

Observers of Indonesian politics may have imagined themselves in a time-warp during January 2008, when autocratic strongman General Suharto remained the country’s prime newsmaker. Even after his death, his legacy pervades the Indonesian military in its quest for regional power status.

After ten years of seclusion following his removal from power, as the eighty-six year-old Suharto struggled for life in a Jakarta hospital, his medical ailments were followed intently by millions of Indonesians with decidedly divergent opinions over the man who ruled the country with a tight grip from 1967 to 1998. His monopoly on the national spotlight before his death served to highlight how dramatically Indonesia’s geopolitical realities and priorities have changed in the tumultuous years following his fall from power.

From a centrally governed, corrupt, army-dominated state primarily oriented toward Western powers and focused on stability, Indonesia has evolved significantly in recent years, though the pace of that evolution has been painfully slowy at times. The new Indonesia is decentralised, democratising and modernising, with military aspirations that look beyond static territorial control to a technologically advanced, well-balanced military, exercising regional influence. Indonesia is beginning to turn more and more to Beijing in this quest, rather than to Tokyo or Washington. Will Indonesia soon be a regional power in Southeast Asia? Some of its new partners seem to think so.

Following a December 2007 visit to Indonesia, Russian Air Force Commander Colonel General Alexander Zelin enthusiastically declared the country ‘one of the great powers in the region’, and spoke warmly of opportunities for personnel exchanges, joint exercises and the sharing of military technology between the two nations. The General’s exuberance over Russo-Indonesian relations may be well-founded, considering the exceedingly friendly relations between the two countries in recent months, including a $1 billion arms deal signed in September 2007. China has likewise taken a shine to Indonesia, signing a strategic co-operation agreement in 2005, leading to a series of adjoining agreements on military personnel exchange, joint development of military hardware and arms production, extradition treaties and trade agreements.

Indeed, in November 2007, Indonesian Defense Minister Juwono Sudarsono was forced to assure reporters that Indonesia had no plans to sign a defence pact with China and stood for an independent foreign policy. Such close co-operation with Russia and China was impossible under the anti-communist Suharto regime and has seen a parallel weakening of bonds with former ally countries like Japan and the United States.

Japanese influence in Indonesia, as elsewhere in Asia, has likely peaked and is now competing with the attentions and resources of China. The recent Indonesian decision not to renew liquid natural gas export contracts with Japan as they expire in the next ten years will drastically affect Japanese energy supplies from one of its most important suppliers, and Indonesian purchases of Russian submarine technology only serve to heighten Japan’s military unease in the region. The United States’ relationship with Indonesia has never fully recovered since the 1999 embargo cutting military aid and supplies in response to Indonesian human rights violations in East Timor.

Although some military support has returned in response to Indonesia’s role in anti-terror operations and for emergencies like the 2005 tsunami (which allowed Indonesia to purchase parts for its C-130 Hercules transport planes) access to American aid and arms suppliers is no longer guaranteed, leaving Indonesia open to eager international suitors with all the accessories of an up-to-date military, including Russian offers of amphibious tanks, advanced SU-30 fighter planes (of which Indonesia has purchased six) and Kilo class diesel submarines (as many as ten of which may be purchased by Indonesia). Defence Minister Juwono Sudarsono minced no words in late 2007 when he openly stated that purchasing weapons from Russia caused far fewer headaches over human rights than dealing with the US.

Shifting partnerships and weapons purchases aside, Indonesia requires far more fundamental internal reform if it hopes to necessary convert its new partnerships into a stronger regional presence. The country remains wracked by corruption and bedevilled by a military structure that has, over decades, entwined the Indonesian army in a myriad of illegal business ventures and deeply involved it in local community politics, to the detriment of both army professionalism and regional democratic reform.

President Susilo Bambang Yudhoyono’s administration, in power since 2004, faces serious internal obstacles to continued growth and stability that can only be tackled through the continuation of reforms begun in the last decade. The specific steps President Susilo can take in the coming years - assuming he survives the Presidential elections of 2009 - remain to be seen. 

Removing the military from its non-military interests

Currently, the Indonesian military (the TNI) controls a vast network of legal and illegal business interests raising revenue outside the approved budget process, including the running of businesses and foundations, the provision of services for hire, the running of protection rackets and other practices wholly outside of its constitutional role and the national interest. Removing the army from these sources of revenue, built up over the past three decades, would go far in professionalising the military and fulfilling the democratisation that has progressed with reasonable success in the political arena. The good news is that a landmark 2004 law required the government to take over all military businesses by 2009 and passed with support from the public, the parliament and military leaders. The bad news is that as of January 2008, no reforms have been implemented and no regulations for the law have been issued.

Increasing the military budget and distributing it more effectively

Due to the military’s off-budget revenues, the government is accustomed to a relatively low level of military spending that has only started to pick up in recent years; US $3.1 billion was allocated in 2006, in contrast to around US $1.2 billion in 2000. To serve a military of over 375,000 personnel (predominantly serving in the army) this amount remains inadequate, especially considering aging Indonesian military equipment (often over twenty-five years old, at best) and low infrastructure standards. The Indonesian military is mostly made up of soldiers with substandard equipment and resources. Professionalising that army to match its size with effectiveness should hold priority over enlarging the force. Some Indonesian military leaders have suggested a minimum number of 800,000 troops to effectively secure the nation, which remains unlikely considering the military’s current limitations.

Improving infrastructure

Recent months have seen some improvement in Indonesian defence infrastructure, including the building of radar sites along the Malacca Straits and peripheral island chains. Plans for improving and adding regional naval bases for patrols and security operations are moving forward in the budgeting process, albeit slowly. Much more must be invested into Indonesia’s basic ability to service and maintain its military before it considers significant overseas purchases. Recent expressions of doubt from Indonesian Navy Chief of Staff, Admiral Sumardjono, concerning the ability to maintain the submarines purchased from Russia highlight the seeming confusion in Indonesian military spending. Indonesia should not be purchasing advanced systems it cannot properly maintain.

The question remains whether Indonesia can become a great power in the Asia-Pacific region. The answer to such a question is dependent on the resolution of a series of internal handicaps having little to do with the purchase of advanced weaponry. The removal of dubious funding sources from the military and the creation of a truly functional military budget is essential. Combining these actions with continued investment in modern military infrastructure, would allow sustainable military growth in Indonesian, and this is to be welcomed as a positive step for increased security and stability in the Asia-Pacific region, provided Indonesia’s human rights record continues to improve.

Indonesia has made new friends in the region and will in coming years look less and less like the country ruled by Suharto. For the moment however, the nation still echoes with the many years of his rule and will continue to do so until reforms are followed through. Suharto’s legacy lives on.

Andreas Berg
Senior Research Intern
International Centre for Security Analysis (ICSA)

The views expressed above are the author's own, and do not necessarily reflect those of RUSI.