Jokowi’s U.S. visit builds on mutual interests, expectations and challenges

The first state visit of Indonesian President Joko Widodo to the United States on October 25-28, 2015, which coincides with the completion of his first year of presidency, has built expectations not only in the two countries but also in the broader Indo-Pacific region. The high-level visits from both sides during the last twelve months have laid out a broad set of common interests and mutual expectations. They have also highlighted issues that are limiting the scope of the U.S.-Indonesia partnership. These agendas and challenges, besides throwing light on the current dynamics of the U.S.-Indonesia relations, are likely to dominate President Jokowi’s visits and discussions in the U.S.

First, the forthcoming visit provides a critical avenue for the world’s sole superpower and an emerging Asian power to reassert their commitment to strengthening regional and global order and maintaining peace and stability in the Indo-Pacific region. The regional geopolitics currently exudes an acute sense of insecurity driven by multi-layered rivalries involving great, middle and small powers of the region. The regional instability and uncertainty has intensified with China’s island building exercise on a massive scale. The U.S. decision to navigate around these reclaimed islands has not provided any additional sense of security. Indonesia’s reported drift away from ASEAN has not helped the region either. The two countries are likely to reaffirm the normative component of their comprehensive partnership and advocate restraint and dialogue as the primary means of maintaining security in the South China Sea and region at large.

President Widodo’s visit offers an important opportunity to the two countries to recalibrate their five year-old partnership in the light of changing regional geopolitics and priorities of Jokowi’s Indonesia. For example, Indonesia’s decision to build its military capability and project its maritime power has shifted the focus to defense and security agendas. In this context, the presidential visit may involve an announcement of substantive bilateral defense and security cooperation in the areas of defense procurement, development of domestic defense industries, and collaboration over global traditional and non-traditional security issues, such as counter-terrorism and ISIS.

Maritime security tops the security agendas of the presidential visit. A wary Indonesia has sought U.S. assistance in three vital areas of building the Indonesian navy, fencing its maritime borders and developing an effective coastguard. A high-level delegation of the Indonesian coast guard team visited the U.S. Coast Guard Academy in September 2015. This visit provided Indonesia’s new-born coastguard an opportunity to get exposure to the operations of an experienced U.S. coast guard.

These discussions highlight Jokowi’s Indonesia’s preference for defense and security-related collaboration with the U.S. Indonesia’s selection of the U.S. as a preferred partner may alleviate Indonesian concerns toward the U.S. strategic presence in the region. The Jokowi visit is an important opportunity for the U.S. to build on this notion of preferred partnership.

Second, the forthcoming visit combines the two agendas of (a) developing Indonesia as a green and blue economy, and (b) building a bilateral momentum to advance the climate change agenda before the world leaders meet in Paris in November-December 2015. These two agendas are also personal favorites of the two presidents. While President Jokowi has launched a national campaign for developing Indonesia’s blue (maritime) economy, President Obama has launched a global campaign for a green economy. Indonesia has developed a dual image of being an active carbon emitter in Southeast Asia (with a recent haze problem in Sumatra and Kalimantan) and taking a proactive role in the multilateral forums in addressing the climate change problem.

Third, Indonesia’s President is visiting the U.S. in the background of his year-long struggle in drawing foreign investment and technology amidst a worsening macro-economic situation, an unfavorable domestic business climate and somewhat dysfunctional politics. Indonesian economy’s need for foreign investment has become more acute as the country’s economic growth has slowed down to less than 5 per cent, its stocks have lost a lot of market capital, its currency has plummeted by more than 10per cent and the value of Indonesia’s domestic saving has declined amidst inflationary pressure.

The Jokowi government has sought to introduce buoyancy into the economy by reshuffling the cabinet (August 2015) and taking several reform measures (September 2015). President Jokowi’s planned visits reportedly include meetings with business delegations and tech giants on both the east and west coast.

An important issue that has bedeviled the Jokowi government’s equations with international businesses is the growing domestic demand for local content requirements and offsets in international collaboration. Indonesian laws have mandated that international businesses’ investment should aim at, along with resource extraction, development of the country’s industrial capacities. Indonesia’s Energy Minister, Sudirman Said, refers to this position as the country’s demand for “fair share” in the foreign investment.

The presidential visit is happening in the background of prevailing uncertainty over the future of the business operations of the Freeport McMoran, an American company that has operated for many decades in Indonesia’s troubled region of West Papua. Indonesian government’s unwillingness to renew the existing licenses for resource extraction has put the government at odds with the international businesses. It might be prudent for both Indonesia and the U.S. to find a common ground on this prickly situation.

Fourth, the visit may also highlight how the scope of bilateral cooperation is hamstrung by a set of legal and constitutional constraints. For example, U.S. laws are very strict in terms of transfer of technology as a part of defense procurement. On the other hand, Indonesian legislation mandates provisions for technology transfer in the defense transaction. Similarly, limited resource base and funding opportunities of the U.S. EXIM bank and Indonesian economy restrict the scope of Indonesia-U.S. collaboration in infrastructure development.

Finally, both Indonesia and the U.S. have a wish list. For example, the U.S. would be happy if Indonesia decided to join the TPP (Trans-Pacific Partnership) negotiations. The Obama government would prefer Indonesia’s resumption of its proactive role in facilitating the ASEAN-China Code of Conduct in the South China Sea. On the other hand, the Indonesian wish list carries issues such as the U.S. joining the UNCLOS (United Nations Convention on the Law of the Seas) of 1982, lifting of embargo on the KOPASSUS (Indonesian strategic force), and technology transfer.

To conclude, the optics of the Indonesia-U.S. partnership are defined by (a) the complementarity of demands and services and (b) Indonesia’s balancing act between strategic convergence and independence. The first principle has intensified the level of Indonesia-U.S. strategic engagement. The second principle has led Indonesia to develop robust relationships with all major powers and advocate a stable multipolar regional order. Jakarta does not want to privilege its relations with one great power at the expense of its relations with other great powers. Indonesia is hedging; the U.S. is a suitor among others; and the pace of partnership would depend on the comfort level and priorities as spelled out by the Indonesian leadership.