History will meet geography when Indonesian president Susilo Bambang Yudhoyono takes the salute as the chief guest at India’s 62nd Republic Day parade this week. The Indonesians have been here before : President Soekarno, whose close friends Jawaharlal Nehru and Biju Patnaik helped defy the Dutch colonial embargoes of the late 1940s that enabled Indonesia gain independence, was the chief guest at the founding of the republic, in 1950.
For decades afterwards, that can-do Asian spirit was frozen by the cold winds of the Cold War and more recently, by Delhi’s focus westwards. But as recessionary trends persist in Europe and the Americas, thereby allowing Asia to resume its place as the centre of the world, the consequent historical moment is allowing India and Indonesia to conduct a rediscovery of each other.
For a start, the word ‘Indonesia’ is a conjunction of two words, the Latin ‘Indus’ and the Greek ‘nesos’ which means ‘island,’ referring to the 17,508 islands that make up the country — and the fact that the closest one is barely 80 km away from the Andaman and Nicobar group. A lack of imagination in both capitals has, however, added to the sense of distance : Air India flies only once a week to Jakarta and Garuda Air, which takes its name from the redoubtable bird in the Hindu folklore Ramayana, doesn’t fly to India at all.
Yudhoyono could remove some of that sense of discomfort when he comes to Delhi with a large business delegation next week, and according to reports, witnesses the signature of a clutch of agreements, including between private enterprises. Indonesia’s Investment Coordinating Board chairman, Gita Wirjawan, has been quoted in the Jakarta press as saying that new investment commitments worth $12 billion will be signed, with the Indians looking to put their money in infrastructure projects such as airports, railways and ports.
“This is for real, not promises,” the Jakarta Post quoted Wirjawan as saying. Meanwhile, private airport developers, GMR and GVK groups, have been conducting feasibility studies and are planning to bid for the modernisation of Ngurah Rai International Airport in Bali.
Indian business interest in Indonesia is kindled not only by the fact of its large, 238 million population, and therefore, a large market, but also because it is the gateway to the Asean, a region of over 300 million people that spans 10 states from Myanmar to the Philippines. The India-Asean summit, scheduled to take place in March, is likely to finalise a free trade agreement in goods and services, that could serve as a model for an India-Indonesia economic arrangement, just like those signed with Japan and Malaysia recently.
Interestingly, India’s business and professional classes seem happy to underline Delhi’s strategic interest in Asean, posing as a benign alternative to the powerful Chinese manufacturing engine that seems to devour everything in sight. An Asean-China free trade agreement (ACFTA) was signed last January, much to the concern of several Indonesian entrepreneurs who worried that local goods would not be able to withstand the aggressive steam-rollering conducted by its eastern neighbour.
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India’s ambassador to Indonesia, Biren Nanda, sought to calm some of those fears when he told Indonesian journalists last week that Indian entrepreneurs would “stay in Indonesia and employ the local labour force” in their factories.
Analysts said India would like to project itself as being civilisationally different from the Chinese in that it seeks to “coopt, not overwhelm” countries in which Indian businessmen are establishing a footprint.
In turn, Jakarta may also like to engage India much more deeply, not so much to balance China’s overwhelming presence, but to expand its set of friends as well as its options.
According to Prof. G V C Naidoo of Jawaharlal Nehru University, “Indonesia is looking for a bigger role beyond the stage of the Asean and knows that the Chinese are already looming large over the security and political architecture of the region.”
India, notwithstanding its raucous democracy, seemed like a good place to expand, Naidoo added, especially as Delhi began to warm to the US. And just as Beijing began to wield the stick in the South China Sea and claim islands contested by several other countries, US Secretary of State Hillary Clinton announced Washington was ending the Bush-era imposed self-isolation in this region by “returning to Asia”.
Jakarta had other Chinese concerns too. In 1967, Indonesia had broken off ties with Beijing, accusing it of supporting the Indonesian Communist party to instigate a coup in the country. With the tiny Indonesian-Chinese community owning a substantial amount of the wealth, Jakarta’s Chinatown was almost burnt to the ground when popular protests against the dictator, Soeharto, in 1998, succeeded in finally unseating him.
Indonesia had sided with Pakistan in the 1965 war, a mere 10 years after the Bandung conference when Nehru, Soekarno and the rest of the developing world proclaimed a new world order in which they promised not to side with either the US or the Soviet Union, but remain bravely “non-aligned”. In March 1947, of course, Biju Patnaik had personally piloted the aircraft that flew in the Indonesian leader Sjahrir for the Asian Relations Conference in Delhi. The year before, in 1946, moved by Nehru’s support to the embattled new republic, Soekarno had ordered that the Indian tricolour be flown alongside the Indonesian Merah Putih at anniversary celebrations in Yogyakarta.
That was an aeon ago. As the Chinese now seek to replace the US to become the most powerful player in the Asean, Naidoo pointed out that neither India nor Indonesia can afford to take sides in the ensuing battles for mind and economic muscle.
Instead, Delhi should forge ahead with developing multiple dimensions to the strategic partnership with Jakarta, including the offer to provide joint maritime security to ships passing through the Indian Ocean and conduct joint exercises with its military.
But if India were to hesitate, it might lose the opportunity of an era to expand its footprint by leveraging its economic growth. As Moody’s Investment Services upgraded the country’s sovereign rating to just one step below investment grade, Indonesian trade minister Mari Elka Pangestu pointed out that it would use its chairmanship of the Asean to push for an Asean economic community on the lines of the European Union.
Gita Wirjawan of the country’s investment board pointed out that Indonesia’s newly streamlined permit system could entice China to double its infrastructure investment by 2014. “Now you don’t have to go to 15 ministries for a signoff to get your permit, you can just come to my office,” Wirjawan told ‘Bloomberg’ in an April interview last year.
India could surely take a leaf out of its neighbour’s strategy.