Enhancing the India-Indonesia Strategic Partnership

By Prashanth Parameswaran

Source: Wikimedia, used under a creative commons license.

Fellow G-20 economies India and Indonesia are expanding their bi-lateral cooperation. Source: Wikimedia, used under a creative commons license.

In early October, Indian prime minister Manmohan Singh made his first official bilateral visit to Indonesia. The trip, which saw the inking of six pacts between the largest and third largest democracies and fellow G-20 economies, marked a significant boost for a burgeoning strategic partnership which holds promise not only for both sides, but for India’s relationship with Southeast Asia and the broader Asia-Pacific region as well.

Though India and Indonesia are modern day littoral neighbors separated by just 80 miles, their initial anti-colonial solidarity in the 1950s later gave way to divergent security interests for most of the Cold War. It was only in the 1990s, as India began its ‘Look East Policy’ and Indonesia underwent reforms after the fall of Suharto, that cooperation began to take off and both sides signed a strategic partnership in 2005, and Indonesian president Susilo Bambang Yudhoyono was given the honor of being India’s chief guest for its 2011 Republic Day celebration.

Today, Jakarta and New Delhi realize that the rationale for a strong India-Indonesia Strategic Partnership is clearer than ever. India and Indonesia are vibrant democracies, and influential regional powers that share interests on various issues including economic development, food security, counter-terrorism, and maritime security. Both face similar economic development issues and governance challenges such as lower growth rates over the past year and corruption. The Asia Pacific and the United States would also benefit from having greater cooperation among these middle powers to positively shape a fluid regional security environment, whether through partnerships with countries like Australia or by strengthening regional institutions like ASEAN.

During Singh’s visit, both sides agreed to boost the India-Indonesia Strategic Partnership by strengthening cooperation in five designated areas or “pillars”: diplomacy, security, economics, people-to-people ties and regionalism. Within these areas, specific notable achievements that were enshrined in the joint statement included holding the first India-Indonesia CEO Forum to foster business ties, pledges to enhance defense collaboration in the space and cyber domains, the inking of new memorandums of understanding on issues such as health and disaster management, and even planned joint cooperation between their film industries in recognition of the popularity of Bollywood movies in Indonesia. The two leaderships also decided that the India-Indonesia Joint Commission will now meet annually instead of bi-annually to better keep up with a rapidly changing world, with the next meeting scheduled for February 2014, probably in Indonesia. In addition, Prime Minister Singh and President Yudhoyono agreed to hold summits annually, including on the margins of multilateral events.

These measures are promising, yet both sides still have a great deal to do to elevate their strategic partnership. In the economic domain, India’s trade deficit with Indonesia is the tenth largest it has with any country. Indonesian investment in India still remains very low, while Indian imports from Indonesia still focus mainly on extractive industries like coal and palm oil. Tourism is limited because there are still no direct flights between the two countries. While a joint study group recommended that India and Indonesia negotiate a Comprehensive Economic Cooperation Agreement as early as September 2009, leaders are still at the exploratory stages of negotiations four years later. As both existing and new ideas are implemented over the next few years, close attention will have to be paid to not just boosting the level of bilateral trade and investment, but also resolving issues regarding the distribution and content of these flows.

In the security sphere, cooperation has been slow to take off. The Defense Cooperation Agreement signed in 2001 between the two countries was a milestone, but it took seven years to ratify. Though there has been movement on agenda items like joint naval patrols, concrete progress in areas such as defense technology assistance has so far been scuttled by domestic sensitivities. Jakarta’s failure to procure Brahmos cruise missiles from New Delhi was a case in point.

Focusing on building mutual confidence through cooperation in regional groupings and boosting bilateral exchanges, alongside more ambitious goals like the co-production of defense equipment, seems like a realistic mix. Experimenting with newer defense dialogues and mechanisms, such as trilateral cooperation between India, Indonesia, and Australia, could also offer promise, even though divergent threat perceptions could impose some limits.

After his discussions with President Yudhoyono in Jakarta, Prime Minister Singh said the two leaders had “outlined an ambitious course for the future.” That clearly signals a commitment by India and Indonesia to strengthen bilateral ties. They must now navigate key challenges and continue to steer a steady course to further enhance their strategic partnership.

Mr. Prashanth Parameswaran is a PhD candidate at the Fletcher School of Law and Diplomacy at Tufts University and a non-resident fellow at Pacific Forum CSIS. He blogs about Asian affairs at The Asianist and you can follow him on Twitter @TheAsianist.

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