The Indonesian Debacle: What Americans Need to Know and Do

September 1, 1998 Topic: Economics Regions: Asia Tags: MuslimYugoslavia

The Indonesian Debacle: What Americans Need to Know and Do

Mini Teaser: The implications of Indonesia's internal problems go well beyond its boundaries.

by Author(s):  Andrew MacIntyre

Why should the United States pay serious attention to Indonesia's plight and consider taking serious steps to help it? After all, Indonesia does not pose any obvious or dire threat to America. It does not have nuclear weapons pointed this way, it is not a large holder of U.S. Treasury bonds, it does not pose a frightening immigration threat on America's doorstep, and it does not have an electorally active domestic lobby in the United States ready to mobilize on its behalf.

Despite the absence of some of these classic ingredients for winning U.S. attention and support, there are strong reasons why Washington should look very seriously at coming to Indonesia's aid in a more vigorous fashion than it has to date. One is strategic. Over the past several decades, Indonesia has basically been a "good news" story as far as U.S. foreign policy calculations are concerned, and accordingly it has received little attention. This will change, however, if Indonesia is in serious distress for a sustained period. Arguing the strategic significance of any particular place is hard in the abstract, but if the concern and efforts of countries as diverse as Japan, Singapore, and Australia are anything to go by, Indonesia's woes are not to be taken lightly. The longer economic recovery takes, the greater the likelihood of serious political instability and a return to military-based government. There are powerful demographic considerations at work here. Prior to the economic crash, it was estimated that Indonesia needed an economic growth rate of 5-6 percent annually just to generate enough jobs for the hundreds of thousands of new entrants to the labor force. Such a growth rate is now but a distant dream, but the problem remains. Although it is not being openly discussed today, no one should discount the possibility that in one to two years Indonesia's political situation could become very ugly indeed if the economic scenarios at the bleak end of the spectrum come to pass.

The implications of Indonesia's internal problems go well beyond its boundaries. If Indonesia is in serious distress, the Association of Southeast Asian Nations (ASEAN) is likely to become a lame institution, since Indonesia is pivotal to the region. This would entail real costs for U.S. foreign policy. While members of ASEAN still only account for a modest share of the world's GDP and military power, acting collectively they have managed to punch well above their weight in world affairs in recent decades. Not only did ASEAN help to bring stability to a region that had previously been one of the most volatile and violent in the world, but it was within its framework that the region prospered in a way that no other developing region had ever before - or since. By the 1990s all the major powers of the world found it an organization worth courting assiduously. Despite its limitations and self-important rhetoric, ASEAN has been central to the evolving multilateral framework for economic and security cooperation via institutions such as APEC and the ASEAN Regional Forum. More broadly, ASEAN has the potential of providing a useful counterpoint to China in the region.

Interestingly, there is remarkably little expectation in Indonesia (or elsewhere in the region) that this is about to change. There is an irony here that is not lost on Indonesia, or other Western Pacific countries. For even though the United States enjoys unparalleled influence globally, is riding on the back of a long economic boom, and has been quick to proffer policy prescriptions, few in Indonesia or elsewhere in the region hold out much hope that the United States will do significantly more to help. It may be that this is as things should be, with neighboring or regional countries looking after their own. But Washington should not delude itself as to the longer term foreign policy consequences of being "absent" during Indonesia's hour of need.

Essay Types: Essay