Australia, Indonesia Finalise ‘Historic’ Defence Pact

Indonesia’s President-elect Prabowo Subianto and Prime Minister Anthony Albanese at a joint statement at Parliament House in Canberra, Australia on Aug. 20, 2024. AAP Image/Mick Tsikas

Australia and Indonesia have pledged closer cooperation in the contested Asia-Pacific region, announcing on Aug. 20 a “treaty-level” defence pact that Australian Defence Minister Richard Marles described as “historic.”

The agreement had been under negotiation since February and will be formally signed in the coming weeks when Marles travels to Indonesia.

The treaty extends beyond the current Australia-Indonesia Defence Co-operation Arrangement—which facilitates joint security exercises—and will see military and security personnel from Indonesia operating out of Australia, and vice versa.

Beyond that, very little detail is known and no questions were allowed at a joint press conference with Australian Prime Minister Anthony Albanese and Indonesian President-elect and Defence Minister Prabowo Subianto.

Albanese told reporters that Australia’s relationship with the world’s third-largest democracy was “underpinned by mutual respect for sovereignty and territorial integrity ... there is no more important relationship than the one between our two great nations.

“I’m pleased to announce that we have today concluded our bilateral treaty-level defence co-operation agreement,” he said.

During his remarks, Albanese mentioned the Lombok Treaty.

Signed in 2006, it includes a commitment from Australia not to support separatism, and the reference has been taken to mean that Australia would oppose the West Papua independence movement.

‘Profoundly Significant’: Marles

Marles characterised the new agreement as “a profoundly significant moment for the national security of both of our countries” and said it would boost “interoperability between our defence forces.”

Calling Australia and Indonesia “the closest of neighbours,” he said they had a “shared destiny” and the treaty showed that the relationship was now “very much defined by deep strategic trust.”

“And when you consider the journeys of Indonesia and Australia over the decades, it is profoundly historic that we have reached this moment where we find security in each other,” Marles said.

The two countries celebrated 75 years of diplomatic relations this year, and Australia was one of the first countries to support Indonesian independence.

Prabowo echoed the same sentiment, saying the defence pact was “a mark of the friendship, the good relationship between us.

“We have had our ups and downs as the political situation and the geopolitical situation evolved, but I think we are very happy today to have several decades of very close cooperation, and I am determined to continue this good neighbour relationship,” he said.

The two countries already collaborate on many issues including security, people trafficking, and drug smuggling.

But it is on the economic front that Canberra still has a lot of work to do if it’s to secure Jakarta’s complete loyalty.

Beijing Still Looms Large

Prabowo chose to visit China in April this year, and that same month Beijing’s Foreign Minister Wang Yi visited Jakarta.

There he met with Indonesian President Joko Widodo, along with Foreign Minister Retno Marsudi and Prabowo, who said they discussed bilateral defence ties, primarily around education and training cooperation, joint exercises, and defence-industrial collaboration.

But Beijing’s aggression and territorial claims in the South China Sea, coupled with Indonesia’s dependence on Western countries for military education, training, exercises and hardware, means the military relationship remains weak despite strong economic, political, diplomatic, and people-to-people ties between the two countries.

Canberra is, therefore, keen to explore that situation and prevent Beijing from exerting more influence over Jakarta with the new treaty a significant step forward.

However, Beijing is expected to continue to operate in Indonesia as it has throughout the region, offering substantial investment in return for closer ties in other areas, and that is something the Australian government will be looking for ways to counter.

Widodo granted Beijing a large number of infrastructure contracts, but even before his term in office, the Chinese Communist Party (CCP) was buying its way into Indonesia.

Between 2000 and 2017, the country was China’s fourth highest recipient of overseas direct investment, receiving US$4.42 billion, and the sixth highest recipient of other official flows, receiving US$29.96 billion.

Indonesia is already second only to Pakistan in terms of the number China-funded infrastructure projects currently underway, with a project value of US$20.3 billion.

In 2021, Australia’s investment in Indonesia was valued at $4.3 billion ($2.87 billion).