US seeks closer ties with ‘key player’ Indonesia as Blinken set to make Indo-Pacific speech

The US Secretary of State’s trip coincides with a visit to Jakarta by Russian leader Putin’s National Security Adviser
Washington is seeking to counter Beijing in Southeast Asia through stronger economic engagement

Indonesia

Resty Woro Yuniar

Published: 9:30pm, 13 Dec 2021

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US Secretary of State Antony Blinken on Monday arrived in Indonesia as part of his first Southeast Asia tour, meeting President Joko Widodo in Jakarta, where he pledged to increase economic ties with Indonesia, particularly in investments and infrastructure development.

Summarising the meeting with Jokowi, as the president is known, Indonesian Foreign Minister Retno Marsudi said Blinken showed a keen interest in partnering with their country, especially in infrastructure.

“The U.S. commitment was very noticeable,” Retno told reporters. Blinken congratulated Jokowi on Indonesia’s G20 presidency and expressed support for its Indo-Pacific leadership role, as a “strong proponent of the rules-based international order,” State Department spokesperson Ned Price said, adding human rights, the pandemic and the climate crisis were also discussed.

Blinken will deliver a speech about Washington’s Indo-Pacific strategy on Tuesday, including its plans for deeper engagement with the 10-member Asean bloc. After meeting key Indonesian officials, he will head to Malaysia and Thailand later in the week.

US needs to step up economic engagement with Asia, Singapore says

The Biden administration has yet to elaborate on its vision for stronger economic engagement with the region, although the top US diplomat for Asia, Daniel Kritenbrink, said recently there would be a focus on trade facilitation, the digital economy, supply chain resilience, infrastructure, clean energy and worker standards.

Blinken is the latest in a string of senior US officials who have travelled to Southeast Asia in recent months, as the region shapes up to be a battleground in the US and China’s ongoing competition for influence.

US Commerce Secretary Gina Raimondo, who visited Japan, Singapore and South Korea in November, said last week that the US was aiming to sign what could be a “very powerful” economic framework agreement with Asian nations next year, focusing on areas including coordination on supply chains, export controls and standards for artificial intelligence.

Raimondo said that her trip to Asia last month was designed to “assess appetite” for economic dialogue. The agreement would not be a trade deal, she said, underscoring that the US would not rejoin the mega CPTPP trade pact “as presented”.

US Commerce Secretary Gina Raimondo speaks at a forum in Singapore on Wednesday, November 17, 2021. Photo: Bloomberg

Benjamin Bland, director of the Southeast Asia programme at the Lowy Institute think tank in Sydney, said Blinken’s decision to make a major speech on the Indo-Pacific in Jakarta was a “signal that it thinks Indonesia is a key player in the region”.

Indonesia, Southeast Asia’s largest economy, is the current president of the G20. It was a founding member of the Asean bloc.

“He will try to reassure Indonesians and Indonesia about the US and his commitment to the region and to Indonesia, specifically,” said Bland.

Indonesia fell off the agenda because the US has been so focused ... on competition with China

Benjamin Bland, Lowy Institute

Jakarta and Washington signed a strategic partnership in 2015 but there were no major initiatives pursued under the Trump administration. Under Biden, there has been a concerted focus on expanding military, cyber, space and digital economy cooperation, among others.

“Indonesia fell down the agenda because the US has been so focused on competition with China, and Indonesia is wary of this great-power rivalry. In Southeast Asia, Washington has been most actively engaging with those that are more enthusiastic about US pushback against China, such as Singapore and Vietnam,” Bland said.

“But hopefully this is the start of a correction in US policy. Because while Indonesia is wary of aligning with other countries, it doesn’t want to see a region that’s dominated by China either.”

Russian Security Council Secretary Nikolai Patrushev. Photo: EPA-EFE

On Monday, Russia’s embassy in Indonesia announced that Nikolai Patrushev, the Secretary of the Security Council and President Vladimir Putin’s national security adviser, would also be in Indonesia at the same time as Blinken, for “consultations on security”.

Patrushev is expected to meet Indonesia’s coordinating minister for security, political, and legal affairs Mahfud MD. According to the Russian state-owned news agency Sputnik, Patrushev will sign an agreement with Indonesia on international information security.

Bland said Indonesia’s close relationship with Russia and Iran – Washington’s key adversaries – was a reflection of the country’s “free and active” foreign policy approach.

“While Jakarta will welcome deeper engagement with the US, it will stick to its ‘independent and active’ stance, also maintaining close relationships with China, Russia and Iran, which are the US’ major adversaries,” he said.

“There is a sense that a lot of outside powers are looking to be more engaged in the region, to do more with Indonesia, as the leading power in Southeast Asia, and as a country that doesn’t form alliances,” he said.

In Southeast Asia where ‘face’ is crucial, has the US missed the boat?

Suzie Sudarman, director at the American Studies Center at the University of Indonesia, said the US would face obstacles in rivalling China’s growing influence in Indonesia. China has consistently been among the top foreign investors and trade partners in Southeast Asia’s biggest economy.

Luhut Pandjaitan, Indonesia’s Coordinating Minister for Maritime and Investment Affairs, on Monday told an investment forum in Hong Kong that the country had already achieved more than 70 per cent of its 900 trillion rupiah (US$62.8 billion) investment target for the year. The target for 2022 is 1,200 trillion rupiah (US$83.7 billion).

Luhut encouraged new investors to look at five areas, namely mineral resource processing, lithium battery development, transport infrastructure, renewable energy development and green projects such as electric-based transportation, adding that investors would find it “easy” to invest in Indonesia as long as they followed “rules of thumb” that countries like China had.

“Investment opportunities are simple as long as you follow rules of thumb for investments – they must be sustainable, look at labour force, transfer of technology, value-added industries and have to be B2B [business to business],” he said.

Indonesia’s Coordinating Minister of Maritime Affairs and Investment Luhut Pandjaitan. File photo: Reuters

Indonesia and the US last year had a trade volume of more than US$27 billion, smaller than China’s US$71.4 billion with Indonesia. China was also the second-biggest foreign investor in the country last year, with US$4.8 billion in realised investments in some 3,000 projects, according to data from the investment ministry.

“The US is now reading the tea leaves, they are trying hard to push Indonesia into their realm of influence, but Indonesia also still needs capital and money from China,” Sudarman said.

“On the other hand, Indonesia is worried about China’s activities in the Natunas, so I would expect the military chief to ask Blinken to hold a joint drill in the Natunas if Indonesia is feeling threatened.”

Asean members, Russia conclude first joint naval exercise

Indonesia is a non-claimant state in the South China Sea territorial dispute, but parts of its exclusive economic zones in the waters near Natuna Islands fall within China’s “nine-dash line”, which demarcates what it claims are its traditional fishing grounds.

Sudarman predicted that in Blinken’s speech, he would talk about US military assistance to Indonesia, such as by providing weapons and defence equipment, as well as joint exercises, and all the pressure that the US has implemented on China, including its diplomacy boycott at the upcoming Beijing Winter Olympics.

Meanwhile, Blinken is also expected to talk about Myanmar and Indonesia’s role in Asean’s efforts to resolve the conflict there.

“The crisis in Myanmar will also feature in the speech as the US has monitored the situation there closely,” said Dulyapak Preecharush, deputy director of Thammasat University’s Institute of East Asian Studies.

“Indonesia has played a strong role in pressuring the Myanmar junta. Next year when Cambodia becomes Asean’s chair, it will continue to play a strong role against Beijing’s shadow behind Cambodian’s Asean chairmanship. The Myanmar issue should be raised in Bangkok later this week, too.”

Additional reporting by Su-Lin Tan, Jitsiree Thongnoi, Reuters and Bloomberg