The Jakarta Switch

The Jakarta Switch

Why Australia needs to pin its hopes (not fears) on a great and powerful Indonesia


The arithmetic is clear: if Indonesia can keep growing around 5 per cent a year for the next two or three decades, as it has done so far this century, it will become the world’s fifth-largest economy by 2040, and the fourth-largest by 2050; in sheer economic weight it will come in behind only China, India and the United States. Already by 2030 – when Australia’s new submarines may just be starting to enter service – its GDP will be three times Australia’s, and almost as big as Japan’s. Wealth is the ultimate foundation of national power, so that will make Indonesia, or should make Indonesia, a very powerful country. It will have the material resources to be a great power in Asia, able to exercise major influence over affairs not just in its immediate neighbourhood but also throughout our region. And it has the potential to be far more important to Australia than we have ever conceived. It may even become as important to us as China, because while it will not match China’s wealth and power, it is much closer – and that could make all the difference. Never underestimate the importance of proximity.

And yet nothing about Indonesia today presages this. It hardly seems a country poised to become a great power and an arbiter of strategic affairs. On the contrary, it appears to be drifting along pretty much as it has for decades: a large, diverse, complex, self-absorbed and rather shambolic nation that still punches way below its weight on the regional stage, and barely registers globally. It seems little able to make sense of the power it is steadily accruing as its economy grows, or of how to use this power. Here, then, is the paradox of Indonesia’s position in Asia today: economic growth is driving it towards a position of political and economic influence that it seems both uninterested in and incapable of exploiting.

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