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Seeing China Coming

Behind Keating’s Pact with Indonesia

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This extract is featured in Australian Foreign Affairs 13: India Rising?. To read the full issue, log in, subscribe or buy the issue.

Security in, not from, Asia

If Australia’s engagement with Asia was Paul Keating’s “magnificent obsession”, Indonesia was its lodestar. In April 1992, Keating made Jakarta his first international visit as prime minister. He had told Hawke in their contest for the Labor leadership throughout 1991 that the country was more important than Africa or the Commonwealth, and in an interview with journalist Laurie Oakes in the middle of that year he was clear that strengthening ties with Indonesia would be his foreign policy priority. It was the country “with which we are yet to put the full constellation of foreign policy instruments in place”.

Keating was as good as his word, telling an audience in Jakarta during a major speech there in April 1992 that Indonesia was in “the first rank of Australian priorities”. He recalls that the reaction to that address was similar to the reception to his Redfern Park Speech: the more he spoke, the more his Indonesian audience realised that this was different language for an Australian prime minister. As a result of the address, the Indonesian government and business elite, according to then Australian ambassador Allan Taylor, would come to “welcome Australia’s participation in the region spiritually and psychologically, as well as physically”.

During a private leaders’ meeting, Keating also made much of the stability provided by Suharto’s New Order government, calling it “one of the most significant and beneficial events in Australia’s strategic history”. For his part, Suharto made it clear Indonesia had “no territorial designs on its neighbours”. Yet he stressed that while wanting closer defence links with Canberra through high-level visits and consultations, joint military exercises, shared training and staff college exchanges, “there should be no bilateral defence pact”. Keating did not sidestep the issue of East Timor, telling his host that it was a “great pity for Indonesia since it detracted from what Suharto had achieved”, pressing him on the need to find a “basis for long-term reconciliation in the province”.

Suharto is reported to have been impressed by his first discussion with Keating, telling his advisers that he admired the Australian’s patriotism and praising his readiness to promote an Australia more engaged with its own region.

The groundwork, then, had been laid. There was mutual respect between the two leaders. The question now for Australia was how to channel that connection into a formal agreement: how to make a shared concern for strategic equilibrium overcome Indonesia’s outlook on the world, which had traditionally favoured non-alignment. Even if Keating’s departmental officials in Canberra could determine this stance to be “anachronistic and sophistry” in a post–Cold War world, they nevertheless had to acknowledge that these were still defining features of Indonesia’s international posture and formed the basis of its approach to ASEAN.

A second hurdle would be the Indonesian armed forces (Angkatan Bersenjata Republik Indonesia, ABRI), which had traditionally been “averse to the notion of defence commitments”. As the Department of the Prime Minister and Cabinet concluded, “western liberalism is still regarded as a threat, and an agreement with us could be seen to bring it closer”.

Keating’s grand ambition rarely wavered. But he was about to step into a minefield.

“DFAT teaching egg-sucking”

The challenges in getting the Indonesian political establishment on board was one thing; domestic approval was quite another. The proposal for a defence agreement faced considerable opposition in Canberra. Keating’s handwritten annotation on the first substantial briefing on the topic he received from his own department neatly encapsulated the local bureaucratic reaction: “the empire strikes back”.

It had fallen to Michael Thawley, then first assistant secretary in the Department of the Prime Minister and Cabinet International Division, to summarise the criticisms he was hearing from around the bureaucratic traps. They were that an agreement would “be vulnerable to a new regime in Indonesia which would pose a threat to Australia (a Defence worry)”, “provide a free kick to an Indonesian government which might want to have a go at us in a bilateral downturn”, “link Australia with ABRI’s internal security agenda and human rights abuses”, and “diminish or blur Australia’s commitments to ANZUS and the Five Power Defence Arrangements (FPDA)”.

Thawley had relayed what was in essence a two-pronged assault led by the departments of Defence and Foreign Affairs. Their reactions, as Keating’s adviser Allan Gyngell warned him at the time, were as much about protecting their own turf as a certain nervousness about Indonesia. Defence minister Robert Ray wanted instead the power to negotiate a memorandum of understanding (MoU) with Jakarta, while foreign minister Gareth Evans, though not opposed to a defence agreement, lent towards a Joint Declaration of Principles (JDP). Not unreasonably, both ministers may have thought that Keating was overreaching. But Keating would not be deterred. He saw an MoU and a JDP as being of token value and insufficient to achieve region-wide strategic objectives. And both ministers, perhaps, underestimated his determination to reach a serious agreement between the two countries.

Keating’s private office was one step ahead of the ministers and their sceptical advisers. Gyngell, in a private note to his boss in early June 1994, having read Defence’s advice to Robert Ray, underlined that “defence’s bottom line is that the idea is premature and the Indonesians won’t buy it”. He took particular exception to the department’s conclusion – the brief had been written by Hugh White, then first assistant secretary of international policy in the department – that the purpose of the agreement was merely “symbolic”. White judged that “from neither side’s point of view is there yet a sufficient basis on which to establish a strategic commitment”, citing “Indonesia’s ideological aversion to formal defence agreements”. Gyngell countered that not only would such an agreement be a “strong symbol of fundamental change in the way Australia and Indonesia see each other”, but it would also “have practical strategic and security value for us … by complicating the planning of any future power contemplating aggressive action in this part of the world”. Once again, it was the future, as much as the past, that was in play.

It was unfortunate, he added, “that God had made Australia and Indonesia neighbours”

There was soon some movement in Defence’s position. According to Thawley, Ray rejected his department’s stance of challenging the strategic logic of an agreement, instead stressing that Keating’s proposal would constrain Australia’s existing defence commitments, worry regional partners and be “unsaleable to the Indonesians”. But he still wanted an MoU to cover the existing, and perhaps some future, defence activities.

Evans, on the other hand, was sticking to his idea of a JDP, on the grounds that it would be more acceptable to the Indonesians and would enable more specific defence activities. But the Department of the Prime Minister and Cabinet had already knocked this one on the head, primarily because it would not highlight shared strategic interests and would invite comparisons to the only other such document then in existence, that with Papua New Guinea. The “more substantial it was”, Thawley added, “the more difficult it would be to negotiate, because it would cover a wider range of areas and imply a greater sense of shared values and closeness than was the case”.

Keating stuck to his proposal in a private meeting with Evans at the end of May. In Evans note of that discussion, the prime minister ticked his approval on each item that Evans brought to the table – with two crucial exceptions.

In red pen, and with a deliberate downstroke of the nib, he simply wrote “NO” next to the proposition that if the government could not secure a formal security agreement, a JDP – with its statement of common strategic interests – would still be “worth considering”. Keating believed that officials in DFAT and Defence were too sensitive to concerns that some in Jakarta might think they “may be worse off in reaching too high and failing than not reaching at all”. As Evans remarked pithily in that meeting, Indonesian officials might worry that “if [they] get inside the elevator, press the roof button, and it gets stuck, [they] may be cut off from the stairs as well”.

But the real point of difference was over the negotiations that lay ahead. Keating bristled at Evans’ suggestion that when raising the issue with Suharto, the prime minister would have to be “fully mindful of [the] sensitivities/downside risks” and take them “carefully into account in his presentation”. As Keating wrote: “DFAT teaching egg-sucking.” After Evans noted that these prime minister–president discussions would take place “on [the] basis of rapid retreat if Suharto negatively inclined”, Keating wrote, “NO – but GE thinks I will.”

Keating told me that at the time he had most appreciated the fidelity with which ministers Evans and Ray supported the need for confidentiality and sensitivity, and their subsequent support of the agreement itself.

This is a 1466 word extract of a 5482 word essay by James Curran. Get your copy of AFA13: India Rising? to read the full article, along with contributions from Michael Wesley, Harsh V. Pant, Aarti Betigeri and Singdha Poonam. 

AFA13 cover image

This is an extract from Australian Foreign Affairs 13: India Rising?. To read the full issue, log in, subscribe or buy the issue.