Over the past several months, President Susilo Bambang Yudhoyono and his Foreign Minister Marty Natalegawa have outlined an important conceptual shift in Indonesian foreign policy. With future China-US relations as the single biggest strategic question facing the region, Indonesia has argued for a policy of ''dynamic equilibrium''. Although still lacking in finer-grained details, at the heart of this approach is a new regional balancing strategy that seeks to keep America engaged and China's rise peaceful.
For Indonesia, building a region of equilibrium involves strengthening the existing multilateral institutions such as the Association of South-East Asian Nations, while encouraging major powers to invest more heavily in joint confidence-building measures. Yudhoyono has stated that Indonesia wants a regional architecture where no single power dominates.
Indonesia recognises that a new balancing strategy for the region is overdue. Until recently, the foreign policy establishment viewed Indonesian interests as a series of concentric circles centred on Jakarta, stretching out across south-east Asia and into the wider region. Policymakers argue that this old approach is no longer sufficient for the realities of the new geopolitical shifts in Asia.
Indonesia's effort to ensure that both America and Russia were invited to the 2011 East Asia Summit demonstrates this new approach. So too does Indonesia's work in building a stronger code of conduct for claimant states in the South China Sea.
This shift in Indonesia's approach has gone largely unnoticed in the foreign policy community in Australia. As the new Foreign Minister Bob Carr takes over his responsibilities and identifies Indonesia as one of his key priorities, Jakarta's diplomatic shift will have far-reaching implications for the Australia-Indonesia relationship and for the dynamic forces at play in the new Asian century.
Aside from former foreign minister Kevin Rudd's description of Australia as a ''middle power with global interests'' there have been few attempts to define Australia's own conceptual approach to the region, or to articulate a new vision for Australia's place in it. Carr's first order of business should be for Australia to partner with Indonesia in shaping the regional order to ensure ongoing peace and prosperity. Australia's next White Paper on the Asian Century is the perfect place to express that the bilateral relationship is at the heart of Canberra's regional diplomacy. But for Australia to take advantage of this new approach, it will need to be far less impulsive on the third-order issues that continue to dominate the bilateral relationship. Irritants such as the live cattle trade, disputes over logging licences and drug convictions should not be allowed to overshadow the more important strategic questions.
Some in Jakarta viewed the decision by the Australian and American governments to rotate up to 2500 marines in Darwin as counterproductive to their broader goal of achieving a closer strategic partnership between Washington and Beijing. The announcement caught Jakarta by surprise, and possibly undercut the Lombok Treaty, which calls for ''regular consultation on defence and security issues of common concern; and on their respective defence policies''. Domestic politics will still be an important factor in moving the Australia-Indonesia relationship forward. Australia has endured two leadership challenges and three foreign ministers in just 18 months. In Indonesia, corruption continues to undermine effective government and the list of possible candidates for the 2014 presidential elections consists of Suharto-era elites.
In the context of the Asian century, several analysts have argued that Indonesia's growing convergence with China is good news. For Jakarta, it brings a renewed international focus on the region. Likewise, Australia's strong alliance relationship with the United States is an asset that can be leveraged in the region. Together, as Asia-Pacific middle powers, Australia and Indonesia can play an important role in easing tensions between Beijing and Washington. Indonesia is now looking for concrete outcomes. Strengthening the Lombok Treaty, and extending it to include a stronger commitment to joint diplomatic activities, might ease some of the recent tensions in the relationship.
A greater focus on practical and achievable outcomes would be welcomed by Jakarta. So far, the web of regional institutions in south-east Asia has proved effective in maintaining a region free of conflict since the 1960s. To sustain regional peace and security, a new approach is required in which middle powers like Indonesia and Australia will play a fundamental role.
Indonesia has taken the first step towards this goal. Australia should get on board.
Olivia Cable is a research fellow at the Centre for Strategic and International Studies in Jakarta. These are her personal views.