Prime Minister Manmohan Singh’s state visit to Indonesia from October 10 to 12 will attract a lot less attention than his recent trip to the United States or his meetings with the Chinese President. Yet, he has a lot more in common with Indonesian President Susilo Bambang Yudhoyono than either Xi Jinping or Barack Obama.
Both Dr. Singh and Mr. Yudhoyono are currently in the final lap of their second terms in power. While both were initially heralded as potentially transformational statesmen, they are nearing the end of their tenure as lame ducks.
They have seen their countries crest a wave of economic growth over the last decade. India and Indonesia’s youthful demographic profile and expanding middle-class consumer base have led many an excitable investment banker to mark them as the economies to watch. But the once cantering economies have slowed, and current account deficits and plunging currencies are among the unappetising items on the Last Supper that Dr. Singh and Mr. Yudhoyono are left digesting.
But India-Indonesia parallels run a lot deeper. Since Indonesia’s transition to democracy in 1998, the commonalities with India have only increased. India is the world’s largest democracy and Indonesia its third largest one. The two countries are also home to the largest (Indonesia) and third largest (India) number of Muslims in the world. Both are members of important multilateral forums like the G-20 and East Asia Summit.
India and Indonesia are maritime neighbours. Given that Indonesia rules the major waterways between the Indian and Pacific Oceans—- waters through which more than half of all international maritime trade passes — the strategic significance of the relationship looms large. In fact India’s 2009 maritime strategy document listed the Sunda and Lombok straits, both under Indonesian control, as major choke points with complicating potential for Indian interests. Cooperation with Indonesia is a prerequisite to enable the Indian Navy’s operations in these waters. Joint coastal monitoring has been ongoing since 2010, but there is a need to step up this cooperation, including joint maritime exercises and training.
The relationship with Indonesia has also assumed greater importance in the context of China’s rise and expanding regional reach. Both India and Indonesia have the potential to act as balancing powers and can aid each other in their mutual goals of engaging China to benefit from its economic might, while ensuring that Beijing’s power is not untrammelled.
In the past Indonesia has proven helpful to India, as in 2005, when it lobbied within the Association of South East Asian Nations (Asean) for India’s inclusion in the East Asia Summit, a regional grouping that Beijing had been keen to keep New Delhi out of.
Mediator role
In recent months Indonesia has been playing the mediator’s role within Asean to find a solution to China’s maritime disputes with countries like Vietnam and the Philippines. These efforts appear to have born some fruit with Beijing agreeing to talks with Asean on a code of conduct for handling conflict in the South China Sea, despite it being a long-standing Chinese position that any such discussions be confined to bilateral meetings. India would do well to support Indonesia’s role in diffusing tensions in the region’s flashpoints.
Counter-terrorism is another field where Indonesia and India should deepen their cooperation. They have both suffered from major terrorist attacks by radical Islamist groups in the last decade. Indonesia’s record in cracking down on terrorist outfits has been excellent and its anti-terrorism training school based in the city of Semarang, is one of the region’s top institutions.
Economic relations between the two countries, another focus of Dr. Singh’s visit, are not insubstantial. Two-way trade was worth around $21.3 billion in 2012. Forty-six per cent of India’s trade with Indonesia consists of palm oil imports. India is in fact Indonesian palm oil’s largest consumer. Indonesia is also India’s biggest supplier of coal, with some 76 per cent of Indian coal imports originating there.
While there is some Indian investment in Indonesia, focused on automotives (Tata Motors has just launched three models of cars), textiles, steel and banking, talks on a comprehensive economic cooperation agreement (CECA) have yet to take off.
Indonesia has a large Indian diaspora, many of whom play an influential role in the Indonesian economy. The entertainment industry, with its Sindhi moguls, is a case in point.
Yet, India has failed to exploit these connections. The lack of direct flights connecting India and Indonesia is a dampener on business as well as people-to-people exchanges.
In contrast, the Chinese diaspora is an active economic bridge between mainland China and Indonesia, and several direct flights link Indonesia to Chinese cities, including second-tier ones like Fuzhou and Xiamen. Indonesia’s trade with China stands tellingly at $66 billion.
Indonesia has just concluded hosting this year’s APEC (Asia Pacific Economic Cooperation) meeting and with it several world leaders held talks with Mr. Yudhoyono to cement ties with the archipelago. Dr. Singh will therefore be only one in a long line of international luminaries to have been seen shaking Mr. Yudhoyono’s hand over the last weeks.
And yet India and Indonesia can potentially have a special relationship. The manner in which Indonesia tackles issues like corruption, the balance between social justice and economic growth, political decentralisation, and communal harmony in a religiously diverse country, hold valuable insights for India. And India’s long history of democracy serves as validation for Indonesia’s more recent democratic transition.
If in the twilight of their terms in office, Dr. Singh and Mr. Yudhoyono are able to transcend feel-good rhetoric and help set up the mechanisms that would aid a sustained and substantial engagement between the two countries, it may yet add some luster to their legacies.
