Australia improves Asian relations

This week, when Australian Prime Minister John Howard exchanged vows with Indonesian President Susilo Bambang Yudhoyono for a new beginning, the diplomatic clouds that have darkened the relationship for half a century appeared to be lifting.

As Yudhoyono left Canberra for New Zealand, promising his nation would be looking south for the first time, Malaysian Prime Minister Abdullah Badawi arrived to thaw yet another chill. With prospects of a trade agreement and acceptance of a deeper Australian role in Asia, the barriers put up by his Aussiephobic predecessor, Dr Mahathir Mohamad, began crumbling.

Both visits, and the free-trade agreement under negotiation with China, have bolstered Howard's claims that his policies have confounded his critics.

"Australia's capacity, simultaneously, to deepen relations with the United States and with countries in Asia is an important yardstick of our strategic maturity as a nation," he told the Lowy Institute in a major policy speech. "Compared with a decade ago, there is now a deeper appreciation of how close links with the US are a plus - not a minus - in forging stronger links in Asia."

Dr Marianne Hanson, of Queensland University's school of political science and international studies, said: "I personally don't feel that the Howard government has had a very good policy towards Southeast Asia, but despite that he has actually been quite successful. The region has not in fact spurned him."

Alan Dupont, a senior fellow for international security at the Lowy Institute, agrees. Writing in the Australian Financial Review, he says that, far from being marginalised in the region, "Australia is actually being courted by Asia".

But behind the warmth of Yudhoyono's visit are more complex and less certain realities that indicate Canberra's emerging stature in Southeast Asia remains uncertain and challenging. While the symbolism is important, decades of suspicion and unpleasantness remain.

"It is one thing for President Yudhoyono to come to Australia and say these very reassuring things - which he certainly did with aplomb - but there are also counter-forces in Indonesia," said Dr Greg Fealy, an Indonesian specialist with the Australian National University's Research School of Pacific and Asian Studies.

"It could well be that all these things come to pass and that his visit has been highly significant, but it could also be the case that a lot of these things don't survive the return flight to Indonesia."

There were tangible and potent commitments - the planned negotiation of a security agreement, prospects of a trade pact, a A$1 billion ($1.1 billion) aid package, and pledges by Canberra not to support secessionist movements in Papua, Aceh, or anywhere else across the archipelago. There were also unusually warm expressions of friendship.

But a great deal of baggage still exists. While Canberra and Jakarta made a good start when Indonesia won independence from the Dutch in 1949, relations crashed during the 1950s when the conservative government of Sir Robert Menzies looked askance at the rise of the Indonesian Communist Party and the annexation of West Papua.

Australian and Indonesian troops fought each other in Borneo during Jakarta's confrontation with the fledgling nation of Malaysia - the Australian Air Force's still-powerful fleet of F111 strategic bombers was a direct response to Canberra's concerns about its closest neighbour.

A brief period of warmth during Gough Whitlam's turbulent Australian Labor Party years was extinguished by the annexation of East Timor, a chasm that in 1999 swallowed the efforts by the Hawke-Keating governments to forge ties, including a loosely worded but still noteworthy security pact.

The two close neighbours couldn't be more different. Australia is a predominantly white, wealthy Western nation of 20 million. Indonesia is an archipelago of 200 million people from a plethora of ethnic and language groups, the largest Muslim nation in the world, and still struggling to escape the Third World.

The vast differences in culture have been hammered home by the trial of alleged drug trafficker Schapelle Corby. Australians, raised with a legal system based on English common law, distrust Indonesian courts convened under a European system inherited from the Dutch. That, in turn, offends Indonesians.

But a great deal of hard work has been put into the relationship and there are a range of important agreements and contacts, supported by business and personal links.

About 18,000 Indonesian students study in Australia and 400 Australian companies operate in Indonesia. Two-way trade last year was almost A$8.5 billion ($9 billion). Canberra also last year gave Jakarta A$169 million ($182 million) in aid, outside the A$1 billion ($1.1 billion) tsunami package.

Australian generosity following the tsunami and earthquake, overlaid by the loss of nine Australian lives in the helicopter crash during relief work on Nias, opened a human door for the commitments and rhetoric of Yudhoyono's visit. But much more lay behind it - the deep and still-growing co-operation in the war against terrorism, for example, that followed the Bali bombings.

For all the criticism of Howard's policies, he has spent more time in Asia than any previous Australian Prime Minister. He has worked hard at developing personal relations and, while he failed to convince Yudhoyono's predecessor, Megawati Sukarnoputri, to visit, he has met the new President five times since his election last October.

"I think there has been incredible work behind the scenes to lay the groundwork for the success of this visit," said Virginia Hooker, a specialist in Australia-Indonesia relations at the ANU's Southeast Asia Centre. "The public think it is tsunami-linked, and definitely that has helped with public sympathy. The Indonesians have seen that we responded so quickly, Australians genuinely suffered with the Indonesians, and that was helpful in a very tragic way. But there has been hard preparation going on by professionals to prepare the groundwork."

Australia's interests in forging closer ties with its large neighbour are clear. Noting that the two countries were forever together in this part of the world, Howard said: "A successful, moderate-Islamic Indonesia led by a man of compassion and a man of vision, such as President Yudhoyono, is about the most powerful weapon that we can have against zealotry and extremism in our part of the world."

Indonesia's motives are similar, but emphasised by the need to boost economic growth and lift living standards.

"President Yudhoyono's political fortunes are linked to how well the economy does," Fealy said. "It's a more pressing issue for him than it is, for example, for the Indonesian Parliament and a lot of political parties."

Indonesia, hammered more than any other country by the 1997 Asian financial meltdown, continues to wallow. Per capita incomes are still below pre-crisis levels and although economic growth has accelerated, it remains below the minimum of 6 per cent a year needed just to keep pace, and is lodged, unsustainably, mainly in consumption. Foreign investment has increased, but not enough, and continues to be beset by corruption, red tape, uncertainties in the legal system and terrorism fears.

Australia, with the strongest and most resilient economy in the region, is an obvious partner. Making it work will be another matter.

The goodwill surrounding Australia's tsunami and earthquake relief will help Yudhoyono to sell his proposals to an Indonesian public traditionally wary of Australia. Hooker believes moving discussions and public perceptions beyond past sensitivities is a major achievement.

"It is also a landmark, I think, in that both leaders have publicly stated a very friendly position, so that the message will be to all who are jockeying for power around them that the way forward has now got to be a more constructive one. I think that is incredibly valuable."

But deep problems remain within Jakarta, especially among the influential military elite that still resents the Timor intervention and demands constant reassurances from Canberra that no further adventures are planned in Aceh or West Papua.

"I would be wary of some of the more effusive language that surrounded this language," Fealy said. "I think it was a very good visit in public relations terms for Indonesia. I think President Yudhoyono performed admirably well - he is charming and said all the right things - but I wonder about his ability to deliver on these.

"We don't have much detail on a lot of the proposals that came forth from his meetings with Howard and the devil will be in the detail. There are some powerful forces back in Jakarta that still look askance at Australia and would be more than happy if Indonesia still kept its distance in some respects."