Indonesia is a rising world power – close relations are in Britain’s national interest
Read the small print of Labour’s new “Progressive Realism” foreign policy and it’s clear Britain’s economic, military and diplomatic tilt to the Asia-Pacific once derided by the party is now accepted as mainstream. Its main elements – further trade deals, military cooperation through the Aukus submarine and technology pact, and the Global Combat fighter programme with Japan and Italy – are all absorbed into the Labour manifesto.
Now we know whatever party leads after the election will not abandon the tilt. But that does not mean it should remain unchanged. Whoever forms Britain’s next government must adapt the policy to meet the rise of what might be called “New Asia”.
So far, the UK tilt has achieved rapid progress on trade agreements and defence cooperation in the region by reinvigorating long-standing relationships built up over previous generations.
Australia, New Zealand, and Singapore are Commonwealth members, and together with the mature economies of Japan and South Korea are what might be termed “Old Asia”. A different group of countries – or “New Asia” – will determine the next phase of the region’s growth and geopolitical orientation. These include the rapidly advancing ASEAN members like Vietnam, the Philippines and Malaysia. But the big one is Indonesia.
Indonesia has outstanding potential for Britain in three respects, starting with demographics. The advanced economies of Old Asia have a population that is both aging and shrinking. For instance, the average South Korean couple has approximately 0.6 children, far below replacement rate. Indonesia not only has a population of around 250 million today; it is projected to grow to 300 million by 2050.
Moreover, as is typically the case, conditions of stability provided by democratic political systems like that of Indonesia allow a growing population to become ever more middle-income and middle class. This is the kind of market made for Britain’s services-led economy, which according to the UN makes the UK the fourth largest country by global exports.
By 2050, Indonesia is slated by Goldman Sachs to become the fourth largest economy in the world (with the UK at seventh at that date). The resulting rise in Indonesia’s comprehensive national power combined with its traditionally strong sense of sovereign independence would see Indonesia well placed to take a leading role in ensuring the region’s resilience against any attempt to impose a hierarchical or exclusionary regional order.
The term “Free and Open-Indo Pacific” may have been made in Japan, but to be enjoyed by future generations, it will be sustained by the efforts of countries like Indonesia.
This does not mean the UK should imagine Indonesia will simply align with a Western worldview as it grows in economic strength and geopolitical importance. The country’s confidence as a regional leader draws on national pride and was built during its independence struggle and resistance to ideological subordination during the Cold War era. At the heart of that stance was Indonesia’s role in founding with India, and the then Yugoslavia, the Non-Aligned Movement.
Traces of the non-aligned reflex remain. Indonesia’s leaders declined to condemn Putin’s invasion of Ukraine in recent debates at the UN, for instance.
However, UN debates aside, today there are signs of a subtle if clear “tilt” in favour of the democratically like-minded. Indonesia has been sounding more positive about potential membership of the 12-country Asia-Pacific free trade agreement CPTPP, which Britain recently joined; current defence minister and president-elect Prabowo Subianto signed a defence and cooperation agreement with the US in November, and a similar agreement is expected with Australia later this year.
Prabowo will take over as head of state in the autumn, around the same time we can expect the next British government to be elected. Whichever party leads they would be wise to look at opportunities to align with Indonesia’s tilt. This might not principally start in defence – although that should not be excluded – but more in the areas emerging as priorities for Indonesia’s incoming government.
First, they should promote Indonesia’s interest in joining CPTPP. It is here that the UK stands to gain the most immediately through the elimination of 98 per cent of trade tariffs that membership brings.
Second, the UK is unlikely to help the world meet its stated 1.5C COP targets without cooperating with Indonesia in a shift to cleaner energy and away from coal – of which the country is both a major user and exporter. The UK has the world’s leading experience in the offshore wind industry and is spearheading technologies like fusion energy generation that are not online today but could be emerging just when they will be needed to meet the demands of Indonesia’s next generation.
Third, the UK can work on finding points of alignment with Indonesia’s emerging role on the world stage – an ambition evidenced by a proposal last year on Russia-Ukraine peace talks and displayed more recently by its airforce’s delivery of humanitarian aid to Gaza. Mobilising support for Indonesia to advance its aspirations would help build partnerships in other spheres.
Britain has opportunity, but no time to lose. Indonesia’s clear trajectory shows it will play an ever larger role not just in regional leadership but as a future world power. The country is signalling a fresh openness to partnerships. The moment for Britain to be a bold and generous partner is now.
Dr Philip Shetler-Jones is a Senior Research Fellow in the International Security team at RUSI. His current research is concentrated on Indo-Pacific security
