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Thank you for subscribing to the Southeast Asia Insider, showcasing the best of Asia Times’ latest reporting, commentary and analysis from across Southeast Asia.

This week’s edition includes:

Indonesia and Australia
at a strategic turning point

Provocative actions by Chinese vessels in Indonesian waters are bolstering defense and security ties between Jakarta and Canberra, which is stepping up reconnaissance missions over the Indian Ocean and across the Timor and Arafura seas separating Indonesia’s eastern island chain from Australia after one of its patrol planes was targeted.
 
On February 17, a Royal Australian Air Force (RAAF) Boeing P-8A Poseidon patrol aircraft was, according to Canberra, “put under threat” by a military laser emanating from a Luyang-class guided-missile destroyer at the approaches to the Torres Strait. The Chinese Defense Ministry said the patrol plane had carried out “provocative and dangerous” acts.
 
Stepped-up Australian reconnaissance, including with soon-to-be-delivered Northrup Grumman long-range drones capable of patroling the skies for up to 30 hours, could be of benefit to Jakarta given that Canberra already quietly supplies maritime intel that helps Indonesia keep an eye on Chinese ship movements in the region.
 
Asia Times’ veteran correspondent John McBeth reported on evolving strategic ties between Indonesia and Australia this week and weighed in on their ramifications, as well as China’s motivations in picking a fight with Indonesia, which is not a claimant to the disputed Spratly islands, in this week’s Q&A.
 
Do you think China’s rising assertiveness in the South China Sea is driving Indonesia and Australia into a tighter embrace?
 
It's perhaps a little too early to tell at this stage, but I think it is inevitable over time given their close proximity and the fact that Indonesian officers already train extensively in Australia and the two militaries enjoy better relations than their civilian counterparts. Indonesian Navy officers, in particular, were not happy at being reduced to the level of bystanders during last year’s extended Chinese incursion into the North Natuna Sea. 
 
Australia has a lot to offer Indonesia in terms of intelligence sharing, which would be for the mutual benefit of both countries if China continues its aggressive actions in the South China Sea. Indonesia will continue to pursue its “free and active” foreign policy in line with its long history of non-alignment, trying as much as it can to steer clear of big power rivalry in the region. 
 
But it was noticeable that while Indonesia’s official response to last year’s surprise AUKUS declaration focused on the perceived threat of nuclear proliferation, it said very little about the trilateral alliance itself. Indeed, Jakarta may well have taken some comfort from Australia’s involvement in the pact and the benefits in cyber security technology that could accrue from it. It should also be remembered that the symbiotic nature of the bilateral trading relationship has the potential to grow exponentially in future years, bringing the countries closer together. 

A Royal Australian Air Force P-8A Poseidon refuels two F/A -18F Super Hornet jets. Photo: Anadolu Agency via AFP

Already faced with criticism that it is falling too much into Beijing’s pocket, the government is looking for economic partners that will help to mitigate that impression. Australia could be central to that.
 
How could Australia-Indonesia strategic relations evolve to counter-balance China’s growing ambitions in the region?
 
Both countries are at a strategic turning point in their still-evolving relationship, geostrategically and geo-economically, as well as because of unprecedented technological and ecological change. While not officially directed at China, the Comprehensive Strategic Partnership the two countries signed in 2018 sets out an ambitious program of increased cooperation in five areas, four of them bilateral and focusing on the economy, security and defense, maritime and people-to-people links. 
 
Significantly, the fifth pillar uniquely calls for joint cooperation in shaping the Indo-Pacific region in ways both sides agree it should be shaped. Australians acknowledge the reality of Indonesia’s non-aligned status, but they say that as their alliance with the US develops there will be both challenges as well as opportunities to more closely align Canberra’s strategic values with Indonesia. 
 
While government-to-government defense cooperation initiatives are important, there is a realization the two countries need to work more closely together in business ventures, training and education, civil-military cooperation and the arts to add more depth and ballast to the overarching strategic relationship. A diversification of supply chains from China may be mutually beneficial, as could increased cooperation in the digital sector and the industry 4.0 Revolution.
 
You mentioned in your report that analysts are puzzled about China picking a fight with Indonesia over maritime territory. What is your sense of China’s motivations?
 
Quite apart from the dispute over the Spratly Islands, I believe it is a phased strategy to slowly force Indonesia and its neighbors, Malaysia and Vietnam, to accept the nine-dash line of national sovereignty, even if it does run counter to the UN Declaration of the Law of the Sea. By first intruding, then establishing a presence and finally enforcing that presence, China could slowly gain effective control over the entire South China Sea and its resources, including fisheries. 

A China Coast Guard ship passes near an Indonesian warship in a July 2019 file photo. Photo: Indonesian Navy’s Western Region Fleet Command

Frankly, I can’t see any other motivation for such bullying tactics, which in Indonesia’s case could conceivably lead to Beijing overplaying its hand. The Jakarta government may appear to be conciliatory, but if China pushes too hard it may arouse a level of nationalist fervor among the Indonesian population that could prove difficult to rein in.
 
We have seen it before and it could happen again, with consequences for ethnic Chinese in Indonesia. Remember, China has also quite a lot at stake in Indonesia now after investing billions of dollars in the nickel industry and in a battery and electric car manufacturing base that will help Indonesia find a place in the global supply chain. 
 
The real test of how far China is prepared to go in asserting its claim will come if the Harbour Energy consortium goes ahead with developing the Tuna Block, which it now looks likely to do. This is not just about Tuna. The nine-dash line also includes large expanses of Indonesia’s EEZ to the southeast, including the Alpha D block and its vast unexploited gas reserves.

Southeast Asia takes indecisive stance on Ukraine crisis
As major geopolitical events in Ukraine unfolded this week, Singapore has been the region’s most outspoken nation in its opposition to Moscow’s full-scale invasion, with its foreign affairs ministry condemning “any unprovoked invasion of a sovereign country under any pretext” and saying Ukraine's sovereignty, independence and territorial integrity "must be respected." Most other governments in the region have limited their response to formulaic calls for restraint and have prioritized the evacuation of their nationals. Some observers see the tame reactions over the issue as peculiar for a region in which governments regularly profess adherence to the norms of sovereignty and mutual non-interference.
 
EU diplomat calls on ASEAN to reject Russian invasion
In an interview with Asia Times, the European Union’s ambassador to the Association of Southeast Asian Nations (ASEAN) Igor Driesmans called on the region to oppose Russia’s invasion of Ukraine: “Witnessing a nuclear state attack its neighbor, issue threats to the international community, single-handedly overturn regional security order and do so on a fabricated pretext, must send chills down the spines of leaders and citizens in any part of the world, not only in Southeast Asia. These developments cannot and must not be ignored. Global order and multilateralism are currently under serious threat and I hope that Southeast Asia will join us in rejecting inexcusable and senseless violence and destruction.”
 
Russia-Ukraine war amplifies Asia’s growth and inflation risks
Economists say disruptions in the supply of commodities such as agricultural products, fertilizer supplies and electrical machinery from Russia and Ukraine may lead to inflationary pressures around the globe. Neither Moscow or Kiev have deep economic or investment links with Southeast Asia, though combined, the two nations are ASEAN’s third-largest source of cereal imports. While not as exposed as Europe and the United States to the rapidly escalating conflict, Oxford Economics says Asian countries will feel the consequences of rising energy prices and lower foreign demand, while the impact on growth, inflation, and current accounts will vary significantly across the region.
 
Goldman Sachs curried favor with Najib for 1MDB business
Tim Leissner, Goldman Sachs’ former head of Southeast Asia, testified in a US court that he did favors for former Malaysian premier Najib Razak in an attempt to secure lucrative business opportunities in a scheme with fugitive tycoon Low Taek Jho. This included getting his daughter, Nooryana Najwa Najib, a position with TPG, an American private equity firm in Hong Kong. Leissner's testimony in the bribery and money laundering case of fellow ex-banker Roger Ng also forced Bank Negara, Malaysia’s central bank, to respond after he claimed a bribe was paid to get its approval for a US$1 billion transfer from 1MDB. Bank Negara denied the claim and said it had complied with procedures.
 
Modest economic rebound for tourism-reliant Thailand
Thailand’s economy expanded 1.6% in 2021, buoyed by a global economic recovery that spurred demand for Thai exports. The turnaround followed a 6.2% contraction recorded in 2020 as a result of the Covid-19 pandemic, but has not brought the economy back to 2019 levels. In fact, the kingdom’s growth was among the slowest in the region. Authorities are aiming for a 4% expansion this year while trying to develop new growth engines such as startups and digital technologies, Finance Minister Arkhom Termpittayapaisith said this week. Tourism, which accounted for about 20% of Thailand's gross domestic product in 2019, continues to be by far the worst affected sector of the economy.

RECENT NEWS

Muted ASEAN response to Russia’s brazen invasion
David Hutt and Nile Bowie | February 25, 2022

Governments in Southeast Asia, a region where non-interference in the internal affairs of other nations is sacrosanct among democrats and autocrats alike, have been reticent to issue strong statements on the fast-moving developments in Eastern Europe as invading Russian forces attempt to encircle the Ukrainian capital of Kiev.

Indonesia leans to Australia as China reaches south
John McBeth  | February 24, 2022

At a time when Indonesia’s sensitivity to big power rivalry in its maritime backyard is rising, Australia is quietly furnishing its neighbor with maritime intel that helps Jakarta keep an eye on Chinese ship movements in the region as Canberra pays increased attention to its northern maritime border amid concerns over an increased Chinese presence.

Tatmadaw fighting a losing war in Myanmar
Bertil Lintner  | February 24, 2022

Myanmar’s army has unleashed yet another wave of aerial bombings in the country’s spiraling post-coup civil war, a change in traditional counterinsurgency tactics that points more to military weakness than strength. Recent attacks by local resistance forces are believed to have motivated the Tatmadaw’s bombing campaign.

Shifting SE Asia sentiment amid US-China rivalry
David Hutt  | February 22, 2022

Southeast Asians are still reluctant to take sides when it comes to US-China rivalry in their region, according to the latest 2022 State of Southeast Asia survey by the respected ISEAS-Yusof Ishak Institute in Singapore. Some 11.1% of respondents said the region should now choose between one of the two major powers, up from just 3.4% in the 2021 survey.

Dutch finally admit ‘shameful acts’ in colonial Indonesia
John McBeth | February 22, 2022

It has taken more than seven decades, but in an extraordinary gesture for a former colonial power the Netherlands has acknowledged the Dutch military engaged in systematic, excessive and unethical violence during Indonesia’s struggle for independence between 1945 and 1949, with Netherlands Prime Minister Mark Rutte offering a full apology.

Biden’s SE Asia policy ‘pivots’ to anti-corruption
David Hutt | February 22, 2022

“The fight against corruption is an important element of protecting human rights and bolstering democracy, including in Southeast Asia,” a State Department official told Asia Times, weighing in on the Joe Biden administration shift’s towards global anti-corruption initiatives at a time when hectoring on rights and democracy has lost resonance.

Indonesia bans mineral exports to move up value chain
Scott Foster | February 22, 2022

Indonesia is taking control of its mineral resources, incentivizing investment in processing facilities and shifting the international balance of economic power. By imposing a one-month ban on the export of thermal coal to avoid a domestic shortage in January, President Joko Widodo signaled he would not allow private interests to undermine the national economy.

Wa an early winner of Myanmar’s post-coup war
Anthony Davis | February 22, 2022

With the military, or Tatmadaw, distracted and overstretched by spreading revolt in the national heartland, Myanmar’s largest and best organized ethnic armed force, the China-leaning United Wa State Army (UWSA), has been moving decisively to eke out a dominant position in northeastern Shan state, a development rife with geopolitical implications.

BOOK CORNER


Morning Star Rising: The Politics of Decolonization in West Papua

By Camellia Webb-Gannon

University of Hawaii Press, June 2021

That Indonesia’s ongoing occupation of West Papua continues to be largely ignored by world governments is one of the great moral and political failures of our time. West Papuans have struggled for more than 50 years to find a way through the long night of Indonesian colonization. However, united in their pursuit of merdeka (freedom) in its many forms, what holds West Papuans together is greater than what divides them.

Morning Star Rising: The Politics of Decolonization in West Papua is an ethnographically framed account of the long, bitter fight for freedom that challenges the dominant international narrative that West Papuans' quest for political independence is fractured and futile. Camellia Webb-Gannon’s extensive interviews with the decolonization movement’s original architects and its more recent champions shed light on complex diasporic and intergenerational politics as well as social and cultural resurgence. In foregrounding West Papuans’ perspectives, the author shows that it is the body politic’s unflagging determination and hope, rather than military might or influential allies, that form the movement’s most unifying and powerful force for independence.

WHAT WE’RE WORKING ON

Nile Bowie will unpack Singapore’s latest budget announcement amid unanswered questions about the city-state’s political succession, and delve into the implications of 1MDB-related court proceedings as ex-Goldman Sachs banker Roger Ng stands trial.

WHAT WE'RE READING

Is it ‘back to the future’ for Philippine politics under Marcos Jr?
East Asia Forum, February 18, 2022
 
Hope Deferred Makes Southeast Asia’s Heart Sick
Fulcrum, February 17, 2022
 
Myanmar’s military numbers
The Interpreter, February 17, 2022
 
All not lost for ASEAN in Myanmar
The Bangkok Post, February 15, 2022

EDITOR'S NOTE

We published a factual error in last week’s Q&A. The United States imposed an arms embargo on Indonesia in 1999 due to alleged human rights abuses in East Timor, not Papua New Guinea. Apologies to our readers for the mistake.
     
     
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