Australia-Indonesia Relations - New Directions

With Responses from
Dr Tim Lindsey
Associate Director - SE Asia Law Centre,
The University of Melbourne
and
Mr Chris Adams
Regional Manager - Asia, Community Aid Abroad
Participant - Dunlop Asia Leadership Program

 

ASIALINK -June 25th 1999

The Hon Alexander Downer :

It is my great pleasure to be talking again at an Asialink function. Asialink has played an invaluable role in heightening awareness within Australia of the importance of developments in our region, and in the need for Australians to pay more attention to what is happening in our own back yard.

This is a vital task, even if something of a thankless one. As Foreign Minister, I am constantly reminded of Benjamin Disraeli's remark that "the very phrase 'foreign affairs' makes an Englishman convinced that I am about to treat of subjects with which he has no concern". I often think you could insert the word "Australian" there, and still have it about right.

Of course, what happens in the world around us is important to us all, and nowhere are developments more important for Australia than in Indonesia. Today I want to discuss the situation in Indonesia and also in East Timor, and what impact events in those places will have on Australia. And in doing so I want to suggest that, despite all the problems demanding attention that we see there, we have seen the emergence of some overwhelmingly positive factors for our neighbours, and for ourselves.

One policy constant

Before I move on to look at the rapidly-changing scene in Indonesia, and Australia's response to it, I want to remind you of one constant policy factor in Australia's post-war history: the recognition that events in our northern neighbour matter a great deal to Australia.

When our Government released the landmark Foreign and Trade Policy White Paper in 1997 we identified the relationship with Indonesia as lying at the heart of Australian foreign policy (along with our relationships with the United States, China and Japan). Such a focus was, and remains, absolutely correct.

If I was to be asked why Indonesia is so important to Australia, reference to any map of our region would be sufficient response: Indonesia is located strategically astride our northern approaches, through which more than half our exports pass. It is the largest country in South East Asia, both in terms of geography and population. Indeed, it has the largest Muslim population in the world. Australia has also benefited for many years from Indonesian policies and actions that have advanced regional cooperation and stability in South East Asia and the wider Asia Pacific region.

To those who argue we have paid too much attention to our relationship with Indonesia I ask: "What is the alternative?" What would Australia have been like if Indonesia had been much more aggressive and interventionist in its dealings with the region? What if Indonesia had adopted a very antagonistic approach in its dealings with Australia? Or what if Indonesia had not achieved a substantial measure of economic advancement and poverty alleviation over the past 30 years?

The answer must be that any of those scenarios would have been a serious setback for Australia and for the region. Of course, were they to come to pass today they would be just as harmful. It is such considerations that more than justify the effort that this, and previous, Governments have put into Australia's relations with Indonesia. And by any fair and objective standard, you would have to admit that Australia has played its hand very well.

Indonesia in uncharted waters

When many commentators examine Indonesia in mid-1999, they seem all too ready to adopt a smug, "I told you so" tone. Ancient grudges are being revived, old scores are being settled. Hindsight rules supreme.

In fact, the Indonesia of today would have been almost unimaginable a mere two years ago. The country then was still experiencing strong economic growth, with little inkling that it was soon to feel the brunt of its worst economic crisis in half a century. Suharto had been in charge for more than three decades, and looked set to die in office. There was little possibility of relaxation of Jakarta's iron grip in East Timor - or anywhere else in the archipelago, for that matter.

Indonesia has been hit by two massive shocks, which have rocked the very foundations of its society. The first was the economic crisis, which saw Indonesia's economy shrink by almost 14 per cent in 1998, with inflation running at over 70 per cent. No longer could continued growth be taken for granted. No longer could crony capitalism pull the rest of the population along on its coat-tails. The economic bubble had burst, exposing the need for thorough economic reform.

In the wake of the economic crisis came massive political change. The Suharto era ended. Golkar, the political party that was once so closely tied with government as to be almost indistinguishable from it, has become only one of several dozen political parties. Political prisoners were released, while subjects that once were absolutely taboo became part of everyday political debate. In a country where reform had been very low on the agenda, the possibilities suddenly seemed endless. And with the holding of the General Election for the People's Representative Council on 7 June, Indonesia has become the world's third largest functioning democracy.

Let me say a little more about the election, although the remarks I make are constrained by the fact that a final result has yet to be announced. We've heard a lot about irregularities in voting, and dissatisfaction with the speed of the count. On the first matter, there do seem to have been some problems around the country, but the scale of the incidents complained of appears to be minor when compared to the total votes lodged. The reports I have received from Australia's group of election monitors indicates that the ballot was generally free and fair, and those judgements are backed up by the views of other international monitors. It is encouraging that, in areas where irregularities have been confirmed, Indonesia's General Elections Commission (the KPU) has been willing to order recounts, and even fresh balloting.

On the matter of the speed of the count, while delays are frustrating, we must remember that this is the first time such a ballot has been conducted in over 40 years. More than 100 million voters have had to select between 48 parties in national, provincial and district elections, all of which were conducted and counted at the same time. Accounts from the field suggest that local electoral officials have been very thorough in the count - which, ironically, has slowed the process. And given the nature of communications in the Indonesian countryside, even under perfect conditions we would have to expect to wait some time for all results to come in.

I do not blame the KPU for wanting to ensure that, when the results of the vote are made known, they are as accurate as possible. This is, after all, an historic event for Indonesia, and one which will fundamentally change the face of its politics. And I also remind myself that even in Australia it takes some time for election results to be finalised - especially Senate votes or, say, the result in the NSW Legislative Council.

As for the election outcome, my considered response will have to await the final result. But some things are clear. Megawati Soekarnoputri's Indonesian Democratic Party of Struggle, the PDI-P, appears to have won the largest slice of the vote. Golkar, on the judgement of most observers, has come in second. Only three other parties have gained substantial numbers of votes: the Peoples Awakening Party (PKB), led by Gus Dur; the Peoples Mandate Party (PAN) led by Amien Rais; and the United Development Party (PPP), led by Hamza Haz.

On the basis of these available figures, Indonesia's new parliament is set to be a very lively place indeed. Some form of coalition arrangements will be necessary to secure the Presidency, and later to pass legislation. This next phase in Indonesia's year of elections will be fascinating, as all parties concerned come to grips with the realities of sharing power and selecting agreed candidates for the Presidency. As much as the election itself, it will constitute a test of Indonesia's commitment to the democratic process.

While we've seen the beginning of a new era in Indonesia's political life, there has also been some mildly encouraging news on the economic front. Growth could return by early next year. The exchange rate has stabilised, and inflation has fallen steadily. Interest rates are also expected to continue to fall which will assist economic recovery, while markets seemed to take the results of the national elections well. Initial surveys show that overall poverty levels in Indonesia have not increased as dramatically as might have been feared, and the IMF has concluded that Indonesia is generally sticking to its reform program - a judgement with which we concur.

Now, Indonesia obviously still has a long way to go before it is out of the woods, but it is definitely headed in the right direction. For our part, Australia will continue to offer assistance to Indonesia that is tailored to meet the country's economic and social needs. From the outset of the economic crisis we have targeted bilateral aid to put Indonesian economic development on a more sustained path, with emphasis on economic capacity and institution building. We have also provided humanitarian assistance to address the worst impacts of the crisis on the poor.

Many of you will be aware of Australia's contribution of more than US$1 billion to Indonesia's IMF package. I worked hard to ameliorate the more austere and potentially socially debilitating edges of the IMF's original proposals, and I'm pleased to note that the new package seems to be running well. Australia also provided export credit insurance to assist trade, and have been active in groups like the G22 and APEC in exploring solutions to region-wide problems and effective international responses to global financial volatility. Our total bilateral aid program for Indonesia has been increased by over a third in the last financial year, and we have committed $121 million in assistance for 1999/2000. It should also be mentioned that Australia has provided a total of $1.1 million in the current financial year to the International Committee of the Red Cross (ICRC) for its activities in Indonesia. Over half of these funds will be specifically earmarked for East Timor where the ICRC is playing a crucial role in monitoring human rights as well as delivering much needed relief assistance to displaced persons.

We've also given Indonesia considerable assistance in coming to grips with the new demands of its reformed political system. We have provided $15 million, channelled through the United Nations Development Program and the Australian Electoral Commission, to help produce and distribute voter education material, train electoral staff and help establish a national tally room for the June elections. As I mentioned earlier, we sent a team of 25 observers, including parliamentarians, to monitor the elections themselves. We've strengthened judicial training in Indonesia, and have provided support for Indonesia's National Human Rights Commission - the Komnas HAM.

Many challenges remain for Indonesia. On the economic front, reform of the banking sector is still a vexed issue, and private sector debt workouts are also making slow progress. Investor confidence (particularly of the ethnic Chinese) is still uncertain, and external funding requirements will remain high so long as investors stay away. On the social front, the tragic violence we have all seen on television news reports over recent months shows the fragility of Indonesia's new freedoms, and the risks of social, religious and ethnic conflict. But great progress has been made, and Indonesia can count on assistance from the Australian Government and people as it makes its first steps along the road of reform and freedom.

A new era in East Timor

While the economic crisis and subsequent political change has transformed Indonesia, it has also opened up the opportunity for a fundamental re-examination by the Indonesian Government of East Timor's status. Put simply, once President Suharto left office, East Timor's future could be put back on the agenda.

The Australian Government is proud of the role it has played in this process. It is now a matter of public record that Prime Minister Howard's letter to President Habibie late last year - in which he suggested an act of self-determination by East Timorese and made clear Australia's support for the release of Xanana Gusmao - helped catalyse the situation, leading to Indonesia's decisions on possible independence for East Timor and the transfer from prison of Xanana Gusmao.

In the months that have followed, Australia has been fully involved as the discussions on East Timor's future have unfolded. The key to the situation has been the sixteen-year long negotiations between Indonesia and Portugal, which culminated in the signature of the Tripartite Agreement at the United Nations in New York on 5 May. Australia is not a party to the Agreement, but we nevertheless are fully supportive, and have made clear to all parties our willingness to assist with its implementation in any practical manner.

We've shown our support in deeds as well as words. We've already given $10 million to the UN Trust Fund and have pledged a further $10 million in "in-kind" logistical support to the UN mission - which has been put to good use helping the UN Mission in East Timor (UNAMET) get up and running. At the same time, Australian agencies have been committing personnel and expertise to the UN process: the first fifteen of the 50-strong Australian Federal Police officers deployed as UN civilian police advisers have now arrived in East Timor. The UN also announced last week that the entire UN police contingent will be headed by Alan Mills, an Australian AFP officer. Australian ADF personnel will soon be deployed as military liaison officers. In addition, behind the scenes, Australian Electoral Commission officials have been assisting UN headquarters with electoral planning. And last week I spoke with UN Secretary General Kofi Annan on the possibility of Australia providing additional logistical support for the UN presence in East Timor if required.

The Government has acted to ensure that Australia has the resources to handle changes in East Timor. Earlier this year the Department of Foreign Affairs and Trade set up an East Timor Task Force to coordinate work in this area. We've established our Liaison Office in Lisbon to ensure closer dialogue with Portugal during the implementation of the Tripartite Agreement. And the Australian Consulate in Dili - the first to be established by any country - is now up and running, with the arrival of Consul James Batley on 8 June.

From the moment the possibility of a vote by East Timorese on self-determination became a reality, the Australian Government's policy approach has been predicated on two matters -the need for the East Timorese people to be fully consulted at all stages, and the need for change, whatever form it might take, to occur in a peaceful and orderly manner.

Now if change is to occur peacefully, something has to be done to improve security in the territory, including through bringing pro-integration militias under control. Despite mischievous assertions to the contrary by some in Australia, this is a matter we have pressed in forceful terms with every level of the Indonesian Government from the President down. We have done so often, since the discussions on the territory's future first began, and will continue to do so for as long as the point needs to be made.

Under the Tripartite Agreement, Indonesia is clearly responsible for maintaining order in East Timor and for protecting its people. Indonesia's Armed Forces must bring to account all persons responsible for violence and killings in East Timor, and must ensure that all people are able to exercise their vote without intimidation.

I'm pleased to see that these calls by Australia and others have borne some fruit. In my discussions with Secretary General Annan last week, we agreed that security in \Dili and some of the other major centres in East Timor had improved considerably. But safety of people elsewhere on the island must still be addressed, and there is some way to go before the overall security situation could be said to be acceptable. Indonesia needs to lift its game, and we, together with the UN and other like-minded countries, will continue to press this point in Jakarta and Dili.

The other matter I discussed at some length with Kofi Annan is progress towards the holding of the ballot on East Timor's future. It is absolutely essential that the vote is free and fair, and we will be keeping in close contact with the UN on its assessment of whether the prerequisites for the vote can be met. We believe the short delay announced this week by Mr Annan is sensible for logistical reasons. However, we have a window of opportunity here, that cannot be held open forever. Delay too long, and the danger is that the whole process will go back to square one. Such an outcome would be in no one's interests.

So we hope for a successful ballot in August. But that will be just the beginning of the process of change in East Timor. Once the decision is made on the territory's future, all parties will need to manage a smooth transition to either wide-ranging autonomy or formal separation, leading to independence. Indonesia's commitment that it will not just walk out and leave East Timor in a state of chaos if separation is chosen is welcome. We need also to consider how the security environment within East Timor will be handled: in my view, there will almost certainly have to be some international confidence-building and administrative presence in East Timor from an early stage.

The East Timorese people will also have to start the formidable task of reconciliation. Whatever the result, one side will be disappointed, but will have to accept the will of the people. The victors will need to be sensible and magnanimous in defeat, if the island is not to degenerate into internal conflict that may fester for generations. Both sides will need to make concessions if lasting peace is to become a reality. While reconciliation will be a difficult process, there have been some encouraging signs recently of dialogue between the two sides - something which we obviously welcome and support.

Australia stands ready to lend a hand to east Timor, whatever its future status. We are already the largest bilateral aid donor to East Timor by far, having budgeted over $7 million in development assistance for the 1998/99 financial year. We are also one of the largest contributors to the International Committee of the Red Cross in East Timor, with donations of more than $5 million since 1982/83. We've given practical assistance in the area of legal aid and human rights monitoring, dissemination of information on human rights issues as well as long-term assistance in the areas of health, education and rural development to improve the everyday lives of the East Timorese. And we have this year sent several AusAID missions to assess the future developmental and humanitarian requirements for an autonomous or independent East Timor.

Conclusion - new, and positive, directions

Clearly, the road ahead in both Indonesia and East Timor will not be completely smooth. The problems that both places face are formidable, and numerous. But I invite you all to consider where they stand today, and where they were just two short years ago, or even just one year ago. Given that contrast, given the manner in which even more significant problems have been solved, I have no doubt that people of conviction and good will can meet and overcome these new difficulties.

Australia has had to deal with situations in Indonesia and East Timor over the past two years that have been completely without precedent. Our policy responses have been practical and very effective, and entirely honourable. We haven't sought to score points in the Australian domestic arena, but have tried to make a real difference to the lives of people in Indonesia and East Timor - and we have succeeded.

I think every Australian can be proud of the role their country has played. We've assisted Indonesia during its worst economic crisis for generations, and have helped them make the transition from totalitarianism to democracy. And we've helped win self-determination for East Timor, something no other Australian Government had been able to do over nearly a quarter of a century.

Many people in Australia will continue to criticise developments in Indonesia and East Timor, and Australia's response to them. I welcome their involvement, and I welcome constructive criticism. But I invite them to consider two matters. Firstly, that there are still powerful groups in Indonesia who are dissatisfied with the way events have unfolded, and who would like to see a return to the ways of the old regime. Such forces take comfort from foreign criticism of Indonesia and see it as condemnation of reform, although that is not the spirit in which it is given.

But more importantly, I invite them to temper their criticism with recognition of the great progress that has been made in Indonesia and on the issue of East Timor. We really do need to stand back and distinguish the forest from the trees every now and again, and this is one of those times. We should, and will, continue to point out those areas where Indonesia has room for improvement, but we should also give full credit where credit is due.

This year has the potential to be a real turning point in the histories of Indonesia and East Timor. Australia has done its bit so far, but we need to maintain that effort, and help ensure that Indonesia and East Timor fully realise the promise of freedom and prosperity that they take into the new millennium.

 

Response from Dr Tim Lindsey :

Reformasi has been one of the most momentous changes in the half-century of Indonesia’s existence. There can be no doubt that the changes brought by reformasi, despite the accompanying violence and hardship, are both long overdue and for the better. But major transition in any country usually gives its neighbours something to worry about.

This is particularly true of Indonesia’s new political pluralism. Democracies, however raw and vulnerable,are always harder to deal with than dictatorships. The days when ‘Indonesia’s’ view could be got just by asking the President are gone, hopefully for ever. Now the aliran - the ethnic and communal groupings that have been the stuff of Indonesian realpolitik for centuries - have resurfaced. It is extraordinary to think that after 30 years of prohibition under Soeharto the old groupings of santri, and abangan Islam, liberal democrats and even the long-lost left have re-emerged.

Australian policymakers - and that includes government, media and business - must resist the temptation to see this old pluralism reborn as confusion and instability. That would play into the hands of forces that want an excuse to re-invoke the strong ‘integralist’ or authoritarian tradition in Indonesian politics, enshrined still in the constitution. I am referring here to factions in the military (formerly ABRI, now TNI) and groups allied to the Soeharto clique .

They are the big losers in recent events. The military has lost its pre-eminence as protector of the rakyat, the people, and has been shamed by revelations of its violence. Some officers hope for a return to their old status by old methods. They would like the new democracy to suffer the same fate as the so-called democratic experiment of the ‘50s: dissolved in military-backed constitutional coup using the supposed instability of the parliamentary system as an excuse.

Another consequence of the new pluralism delivered by the elections is that instead of dealing with a strong man in power indefinitely, Australia will have to deal over the next 5 to 10 years with shifting cliques and coalitions and a series of leaders - including including a strong woman. Right now power is brokered not by President Habibie alone or even very much by him but through figures such as Abdurraman Wahid (‘Gus Dur’), Megawati Soekarnoputeri, Nurcholis Madjib, Akbar Tanjung, Adi Sasono, General Wiranto and Dr. Amien Rais. It is critical that Australia doesn’t try to pick winners but build links with all political groupings - even those seemingly less important or even hostile - and does so across government, private and NGO sectors. Amien Rais may have collapsed electorally but, to test our visual imaginations I can see him becoming Indonesia’s Harradine. I won’t push this analogy much further — I really can’t see Gus Dur as Mal Colston and of course there could never be another Alexander Downer.

Another consequence of the disintegration of the now-old New Order is a ‘rebirthing’ of Indonesian nationalism. This was demonstrated last week by the poor showing at the polls of Rais’ PAN which advocated the Indonesian ‘F’ word, federalism, and Timorese independence, while the PDI, which opposes these ideas, was by far the most successful party.

Australia must realise that Indonesian support for a unitary state is not the result of Soeharto-ist indoctrination but a deep-seated political conviction held by most Indonesians and fundamental to their view of themselves. We have to remember that a revolution and dozens of ‘mini-wars’ have been fought to achieve or maintain a single united state. Secession in Australia here is a subject for joking but it is not for many Indonesians, certainly not for the 60% or so living on Java. So Megawati’s nationalism is touching a deep vein - one tapped by her father when he founded Indonesia.

One area where this issue of Indonesia’s national integrity will become critical is in relation to the multilaterals. Most major political parties in Indonesia have acknowledged that the IMF and World Bank effectively control economic policy . They have little choice but to do what they are told. If you look at the extraordinary wave of reform introduced by Habibie since Soeharto fell (labour law, political laws, political prisoners, electoral laws, banking reforms, regional devolution, anti-monopoly law, etc) almost every one is a tick on the IMF’s checklist. The extent to which foreign organisations perceived as secretive and ‘neo-colonialist’now control government in Indonesia is a topic of resentment among political elites. The issue is squarely one of national sovereignty and Mahathir stirring the anti-Western possum will keep it on the agenda.

Megawati has indicated that she will try to renegotiate arrangements with IMF and we can read this as a signal for more than that. Australia will have a task picking its way through this minefield - pushing Indonesia’s legitimate concerns again in the US as the Minister did a year ago but doing so without earning the painful displeasure of America and the markets.

Finally the other major issue for our relations - East Timor. This has long been a key problem domestically for Australian governments dealing with Jakarta but it was never a key issue in Indonesian domestic politics - and nor, for that matter, is Australia. Habibie’s left-field initiative offering independence to East Timor was perhaps an attempt to swat annoyance out of the way rather than considered policy. Although it has pushed Timor to the front again internationally we must be careful not to exaggerate its significance in Indonesia, especially at the village level.

To apply my two themes of resurgent pluralism and reborn nationalism to the Timor problem, we can see that in fact these two forces ultimately contradict one another. The move to pluralism is the dynamic to which Habibie surrendered. Nationalism is the force which is resisting, through the army and political groupings. But then we also have these issues in another permutation on the ground in Timor. First, pluralism. East Timor is not a united society. The violent pro-autonomy militia represent vested interest groups who have prospered or at least survived under Indonesia - army-linked in some cases, also landholders and officials. They are a minority but they are armed and they have moved pre-emptively to wipe out those they fear will wipe them out, with horrific consequences.

On the other hand nationalism in East Timor is the province of the pro-independence group led by Xanana Gusmao and they have a profoundly moving and compelling argument to mount, as we all know and acknowledge. But, whatever the justice of the situation (and that favours independence), and whatever the outcome of the referendum, East Timor will not find peace until the opposed groups reach a reconciliation.

Gusmao himself has said this but the problem he acknowledges is how to do it. The Dare negotiations will only be small part of this process. They will not resolve matters on their own. Again Australia’s role in this will be hard, especially because of our embarrassing past as a key supporter of Jakarta’s occupation a position that required some fancy footwork after Habibie’s remarkable flip-flop. I don’t know what role Australia can make for itself in East Timor, whether autonomous or independent. Clearly we must regain ground with the independence movement. Our past links to Jakarta and our interests in the Timor Gap coupled with our obvious importance as a future aid donor may allow us a role as a go-between. This would recognise the importance of working with different voices in a plural polity but it will require skilful - even brilliant - management. One thing is certain quick-fix solutions are more likely just to draw out the problems in East Timor. Let us hope that a rushed UN ballot in August does not prove to be one of those, although the indications are grim given the absence of an effective peacekeeping force, whether Indonesian or foreign.

So this is brave new world for Australia Indonesia relations and potentially vastly more difficult for our government than ever before. But it should also be a time for optimism We are seeing the world’s third largest democracy emerging and with it the economic recovery of the worlds’ fourth-largest nation. In not much more than a year Indonesia society and culture has begun to flower as it has not done for over 40 years. This is what we should focus on as we try to find a new role for Australia as a SE Asian partner.