JPRI Working Paper No. 64: January 2000
Australia-Indonesia Relations After the East Timor Upheaval
by Nancy Viviani

The political transformation that took place in Indonesia over the course of 1999 is truly historic, not simply for Indonesia itself, but for the region and for Australia. The fall of President Suharto, the interregnum of President Habibie, the general elections of June 1999, and the MPR vote of October (MPR is the acronym of the People's Consultative Assembly, Indonesia's partially elected and partially appointed parliament), which led to the election of Abdurachman Wahid as President and Megawati Sukarnoputri as Vice President, demonstrated the volatility, attendant violence, and realignment of political forces in this great sea change toward a democratic Indonesia.

These changes also delivered an embryonic new state onto the international scene, and in the process plunged Australia-Indonesia relations to their lowest point for some thirty years. Since the Indonesian forced-takeover of East Timor from Portuguese colonial rule in late 1975, Australian governments (though not the majority of Australians) and the Indonesian government had taken the same view: East Timor was irreversibly an integral part of Indonesia, despite UN refusal to recognize the takeover. In the new political climate after the fall of Suharto, some Indonesians began to discuss the option of a degree of autonomy for East Timor within Indonesia, and John Howard, Prime Minister of Australia, in a letter to President Habibie in December 1998, endorsed a long period of movement toward autonomy and an eventual vote on the province's political future. President Habibie--to much surprise both inside and outside of Indonesia--announced in March 1999, that East Timorese would be given a direct choice between autonomy and independence the following August.

This vote was preceded by much political coercion in favor of continued integration by TNI-backed local militias (TNI is the latest acronym, replacing ABRI, for Indonesia's armed forces). When, despite this, 78 percent of Timorese voted for independence, the militias, supported and joined in some cases by the TNI, launched an extreme bout of killing, destruction, and forced displacement of the population. The severity of this violence, communicated to the world by the UN presence and international media in Timor, led directly to the UN Security Council vote in September to send INTERFET, an Australian dominated and led regional armed force, to stop the violence. A regular UN peacekeeping force will replace INTERFET in early 2000, and an interim UN administration is now in place in East Timor, following the MPR vote in October 1999 to accept its secession from Indonesia.

It is clear that events moved very quickly and at times unpredictably over the months March to October 1999. It is less clear why Australia and Indonesia should have found themselves at serious odds over this East Timor process, particularly since the Howard government and Australians generally accepted Habibie's March decision to allow the East Timorese to vote on their future status. It is also interesting that Australian and Indonesian wider opinion should have been so split over these outcomes.

In Indonesia, although Habibie did obtain the support of his cabinet for the East Timor vote, the policy found little support in the army (particularly among those officers with long-standing economic interests in the province). Nationalists feared the further disintegration of their state due to independence claims in Aceh, Ambon, and Irian Jaya. For most Indonesians the problems of East Timor were a low priority. It was, in short, an unpopular decision among elites and more widely, although some democrats supported it publicly.

In Australia, on the other hand, Howard's decision to back the vote was widely supported, although many warned that the haste of the exercise could result in disaster, as proved to be the case. The opposition spokesman for Foreign Affairs, Laurie Brereton, was an early supporter of an international peacekeeping force for East Timor, well aware that Indonesia would reject this. As it turned out, it was Australia's lobbying of Indonesia and internationally for such a peacekeeping force before the vote that led to the initial estrangement in Indonesia-Australia relations. Indonesia saw Australia as being hypocritical since it had supported Indonesia on integration for 25 years, and as meddling in Indonesia's internal affairs. It also accused Australia of blackening its international reputation by charging that the TNI was responsible for the violence against the Timorese. Australia's strong role in the UN Security Council vote for INTERFET and in then staffing the force only confirmed Indonesian suspicions that Australia had its own agenda and was no friend of Indonesia.

Howard's September statement (retracted soon after) that Australia could act as "deputy sheriff" to the U.S. in regional peacekeeping, has only cemented the view in Indonesia and elsewhere in Asia that Australia still sees itself as white and western, telling its neighbors how to behave. This impression was only heightened by the recent Australian vote to retain the British crown rather than become a republic. The Indonesians, for their part, continued to use Australia as a convenient scapegoat for their troubles over East Timor, organizing demonstrations and generally castigating Australia for its behavior.

This is now the tense and uncooperative state of Australia-Indonesia relations. In these circumstances it is worth discussing some of the geopolitical factors that have dominated this relationship over time, placing this imbroglio in its historical context, and analyzing the East Timor issue's impact on the relationship today.

Geopolitics and History in Australia-Indonesia Relations

In the past and for the future, Indonesia will remain central to Australian foreign policy for three enduring reasons. Apart from Papua New Guinea, it is the country closest to Australia, and like France and Germany, or China and Japan, Australia has to take particular care of that relationship. Neighborhood matters in international relations.

There is a significant asymmetry in power between Indonesia and Australia. Population size and military strength also matter in international relations. This means that, generally speaking, Indonesia carries more weight among Asian countries, including China and Japan, and with the U.S. and Europe, than Australia does. The usual outcome is that in disputes between Australia and Indonesia--as was the case over West New Guinea, former President Sukarno's confrontation with Malaysia, and the annexation of East Timor in 1975--great powers like the U.S. generally take Indonesia's side or stay on the sidelines. Some Australians are confused by this because of the importance they attach to their alliance with the U.S., always expecting the U.S. to support Australia, regardless of its own interests.

Another effect of the asymmetry is that in any dispute with Indonesia, Australia stands to bear disproportionate costs to the bilateral relationship. This does not mean that Australia always avoids conflicts with Indonesia--the populist accusation in Australia that governments appease Indonesia is simply wrong--but it does mean that the Australian government must make careful calculations of costs and benefits to minimize the former and maximize the latter.

Finally, Australia's relations with Indonesia have a particular significance because of differing political systems and political values. Under Sukarno, Suharto, and Habibie, Indonesia pursued policies that presented substantial security and political difficulties for Australian governments and the Australian people. Sukarno's policy toward West New Guinea, Confrontation with Malaysia, East Timor in 1975 and again in 1999 were all issues driven by politics in Jakarta, and in none of these did Australia play a decisive role in the outcomes. In the West New Guinea issue (1946-1961), where Indonesia claimed the territory from the Dutch as a successor state, U.S. intervention was decisive in the outcome. On Confrontation (1963-1966), where Indonesia sought to prevent the formation of the new state of Malaysia, the policy ended as a result of the fall of Sukarno. The U.S.'s silent approval of the takeover of East Timor in 1975 underpinned Indonesia's actions. Habibie's decision to allow a vote on independence in East Timor was, it seems, principally an outcome of Jakarta politics and Habibie's seeking international legitimacy for his rule. While Australia was instrumental in putting together the multinational peacekeeping force, it was U.S. pressure that forced Habibie to agree to its entering East Timor.

These facts are unpalatable to most Australians, and particularly to activist groups ranging from churches and students to more widely based political groups. This means that in Australian democracy, every government--whether it is the Australian Labor Party dealing with the Indonesian independence struggle or John Howard vis-à-vis East Timor--is under greater or lesser domestic, generally non-partisan, political pressure to "do more" with respect to Indonesian issues. The messages the Indonesians get from this are mixed and often unpopular. The Australian media are unfettered and often fail to make proper distinctions between the Indonesian government and the people or to take Indonesian nationalism seriously. The Australian government sometimes appears to Indonesians to be speaking with a forked tongue.

The lessons of the past in Australia-Indonesia relations are mixed. In Indonesia's independence struggle, Australia made a difference by lobbying the UN to intervene against the Dutch. The spectacle of Australia turning against its wartime allies grew out of a reluctant Labor government being pushed along by anti-colonialist public opinion. By contrast, on West New Guinea, Australia was more Catholic than the Pope in rejecting Indonesia's claims to the territory while supporting, for over 12 long years, continued Dutch rule. While this Australian policy was strongly supported domestically, it was ultimately undone by the United States. Meanwhile, Australian diplomats, much excoriated by their fellow citizens and press, nonetheless managed to retain a workable bilateral relationship with their Indonesian counterparts. On Confrontation, Garfield Barwick, as Foreign Minister, ran a double line, supporting the Malays and British militarily while keeping up bilateral relations with Indonesia. The inherent conflicts in this policy were avoided by Sukarno's fall from power.

The long and relatively peaceful rule of Suharto provided an opportunity to recast Australia-Indonesia relations in a more constructive mode by both coalition and Labor governments. East Timor's forcible annexation was, in the end, caused by the resolution of army divisions in Jakarta, and was winked at by the United States. Portugal also bears a good deal of responsibility for its failure to decolonize, as do the parties in East Timor, who were unwilling to negotiate a political settlement. Australia could not have prevented this outcome by diplomacy, and was--rightly--unwilling to go to war. Australia should have openly and strongly warned against forced annexation before the invasion began. As it was, it was forced to condemn it afterwards by the weight of domestic opinion. That Australia has limited influence on Indonesia is an unpopular view among many Australians who mistakenly believe Australia should have done more.

From 1975 to the present, East Timor remained more than a "pebble in the shoe," to use Indonesian Foreign Minister Ali Alatas's words, in both Indonesia and Australia. While it remained low in Indonesian priorities, East Timor did not become reconciled to being Indonesian because of the brutality of military rule there over 24 years. Timorese were split into those who benefited from economic development and those who were the targets of military oppression. These divisions complicated still earlier political differences among the Timorese. Successive Australian governments attempted to submerge East Timor into the broader bilateral relationship, but periodic outbreaks of violence, such as the Santa Cruz massacre in 1991, kept Timor in the focus of Australian groups and the media.

Suharto's fall, following upon the economic crisis, opened the way for a reconsideration of East Timor in Indonesian politics. It seems that Habibie seeing a political opportunity and encouraged by Howard and others persuaded his Cabinet to agree to the referendum, despite the opposition of factions in the army. Now, of course, counsels of perfection and 20:20 hindsight are appearing in the Australian media questioning the wisdom of the referendum.

The Move to East Timor Independence

My own view is that given the political situation in Jakarta, with Habibie as a lame duck President, there was little or no chance that a new President--either Megawati or another nominee--would have agreed to a vote. Both Megawati and Abdurachman Wahid said clearly, before their election, that they did not favor an independent East Timor. Given this, if the vote had been delayed, as many recommended, it was very unlikely that a new President would have permitted it to take place at all, especially since a new President must rely on army support.

A peacekeeping force was clearly necessary before the vote since both public and intelligence sources expected some degree of violence from the militias. However, Habibie would not and could not agree to this because of nationalist pressures from the army. Prime Minister Howard and Alexander Downer, the minister of foreign affairs, were right to point out before the vote that inserting a multinational force into East Timor without the agreement of Indonesia would have amounted to war. The argument that Australia could have shifted Indonesia on this by mounting an international campaign before the vote is incorrect. The U.S., as was made clear by its initial and subsequent reluctance to act, and other Asian countries would not have joined such a campaign; and without them it would have failed.

The argument that Australia, given its close ties to the Indonesian military, could have done more to gain assurances from them to prevent violence before the vote is also dubious. As far as we can tell, the actions of the TNI in East Timor were only partly being driven by commands from Jakarta. Much more important were the army politics in the TNI's Eastern Indonesia command. Habibie was revealed as having no power to command General Wiranto, the Chief of Staff, and Wiranto himself had little purchase on the TNI in East Timor, who obviously controlled, paid, and armed the militias.

After the vote and with the worsening violence, the U.S. virtually forced Indonesia to agree to peace enforcers by threatening to sever bilateral ties and multilateral financial support from the IMF and World Bank. The latter were already in danger because of bank corruption scandals. Howard and Downer played a crucial and creditable role in getting the vote out in the Security Council and in forming the coalition force INTERFET. Howard was fortunate in having Clinton at the 1999 APEC meeting in New Zealand, since this allowed him to have Clinton push the Pentagon further than it wanted to go, although this was still not far enough for many Australians. Howard was also fortunate in having the Chinese Premier Jiang Zemin in Australia at the time. While Jiang publicly took the expected line of no interference in domestic affairs, China nonetheless voted for peace keepers in Timor in the Security Council. Presumably this was also prompted by the killing of Chinese during the government-fomented May election riots in Jakarta.

The upshot is that while events in East Timor have principally been driven by political divisions in Jakarta, the United States played the decisive role in forcing Habibie to accept peacekeepers, and Australia was decisive in putting the multinational force together. Had Australia not been willing, there would have been no force. Although some pundits in Australia believe that the Howard government has made "gross policy failures," I do not agree. It did the best it could under extremely difficult circumstances, and it is not clear there were any viable alternatives. It acted for the right reasons and managed to satisfy the mainstream of opinion in Australia in doing so. The Howard government also sought to restrain the extremes of opinion in Australia with some success, although some elements of the media nonetheless behaved irresponsibly, mistreating the Indonesian Ambassador and Foreign Minister Downer, and raising expectations about policy actions by Australia that could not be fulfilled.

Howard and Downer have not done as well when it comes to managing relations with the Indonesian government and wider opinion there. It is of course inevitable that Australia's pushing Indonesia on the East Timor vote and on peacekeepers, and its taking the lead in the multinational force would provoke nationalist sensitivities among Jakarta elites and more widely, and damage the bilateral relationship. This was not helped by statements attributed to Howard (later disavowed) in the Bulletin of September 20, 1999, that Australia would accept a role as "deputy to the U.S." in peacekeeping in this region. But Jakarta politics is divided: the Jakarta Post said on September 17, 1999, that Indonesians should not blame Australia but acknowledge the shame that the army had brought on Indonesia by its violence in East Timor. At least some of the attacks on the Australian Embassy were orchestrated by army factions.

Yet many Indonesians--including liberals--see Australians as interfering hypocrites. After all, Australia had recognized the incorporation of East Timor since 1978 and it consistently spoke as a good friend and supporter of Indonesia. Howard's words in Australia are differently construed in Indonesia, and the Australian media also have a different impact when seen in Jakarta. It would have been worth while if the Howard government had been more explicit in publicly stressing the enduring importance of the relationship despite the differences over East Timor, and had reiterated Australia's long term interests in Indonesia's recovery from the economic crisis. This might have prevented the abrogation of the 1995 Australia-Indonesia Security Treaty, which Indonesia announced in September.

Future Prospects

How deep and how long this damage to the bilateral relationship lasts depends on the shape and direction of the new Abdurachman Wahid government, which may itself be a transitional one. The Indonesian military will have a long memory, given its interests in Timor and may make things difficult for Australia in the region and on the border with East Timor. In one sense the Indonesians have transferred the East Timor problem to Australia and how Australia now manages a poor, weak and divided mini-state on Indonesia's borders, probably with ongoing military conflict, will be a real test of reconstructing the bilateral relationship. It will be difficult to avoid East Timor's becoming an Australian client state and if it does become so de facto, this will only entrench the suspicions of some Indonesians that Australia always wanted such an outcome and played a double game.

Any Indonesian government will fear further Australian domestic pressure on human rights in Irian Jaya, Ambon, and Aceh, seeing these as covert support for secession movements there. Apart from the army, many Indonesians can swallow the "loss" of East Timor from the Republic as it was not part of the original independence settlement with the Dutch. But they will not countenance the dismantling of their Republic. And they are right to fear an Australia role in this. Various groups in Australia are already protesting human rights in Irian Jaya, and are not receptive to arguments about the international legal difference between East Timor and Irian Jaya. The Howard government needs to say soon that it will support no moves for secession in Indonesia and that it rejects the views of those in Australia who support this.

There are three major future problems in Australia's bilateral relationship with Indonesia. The first is that East Timor will be a continuing problem for both sides and it will need a deep level of cooperation between Australia and Indonesia to manage this. That deep level does not now exist, but it is in both states' interests to prevent East Timor from becoming a source of continuing trouble in the bilateral relationship. The second problem is a related one: the trust that is required on both sides to manage the relationship is mostly gone. This does not mean that Australia in the past always gave in to Indonesia, for as argued above, it did not. But there was trust that, despite the difficulties, Australia wanted Indonesia to succeed in its national vision of becoming a secure, well regarded and economically successful country. That vision has suffered terrible blows in the past two years. Its recreation depends on future Indonesian governments, but Australia must also do its part. That means, first, an end to the blame game, and, second, a proper balancing of Australian interests vis-à-vis Indonesia and East Timor.

Finally, there is a temptation, already apparent in Australia before the peacekeeping force has done its work, to make quasi-triumphalist pronouncements about Australia's future defense and foreign policies. Apart from the folly of making policy on the run and allowing defense mandarins with questionable track records to have their way in raising defense budgets, time is needed to think things through. It is not clear that Australian defense policies of the last decade and a half were, or are now wrong, nor that the Howard government's foreign policy of "In the National Interest" is now no longer relevant.

Australia must still live in Asia, and if the United States pushes it to become its deputy sheriff there, Australia may find itself genuinely not acting in its own best national interest. The alliance with the U.S. is being transformed so that Australia does more, the U.S. does less, and yet Australia is still expected to back up American foreign policy preferences, as with China. A rapid and substantial increase in defense expenditures would need a strong public justification, since it is not clear that threats to Australia have increased. An opportunistic hike in defense expenditure at this time would send all the wrong signals to the region and muddy the waters of cooperation on security issues.

Indonesia is a post-colonial state in the midst of a major political transition from a military-dominated autocracy to some form of soft unstable democracy or possibly to an eventual reassertion of military authority in government. To an Australia with the gift of an old democracy, neither outcome in Indonesia will mean comfortable bilateral relations in the future, and these will be complicated by an independent East Timor that relies on Australia. Australians need to recognize that simply ignoring Indonesia or, worse, undermining it in the region are simply not options. A patient rebuilding of relations, based on the capacities of whatever government is in power there, and eschewing the extremes of domestic opinion, is the only way forward.

NANCY VIVIANI is Adjunct Professor of International Relations in Griffith University, Brisbane. Among her many works are Indochinese In Australia 1975 to 1995 (Oxford and Melbourne: Oxford University Press, 1996); "Regional Arrangements and Democratic Reform of the United Nations," in A. Paolini, A. Jarvis, and C. Reus-Smit, eds., Between Sovereignty and Global Governance (London: Macmillan, 1998); and "Australia and Southeast Asia," in J. Cotton and J. Ravenhill, eds., Seeking Asian Engagement: Australia in World Affairs 1991-1995 (Oxford and Melbourne: Oxford University Press, 1997). A version of this paper is forthcoming in C. Manning and P. van Dierman, eds., Indonesia in Transition: Social and Economic Dimensions of Reformasi and Economic Crisis (Sydney: Allen and Unwin, 2000).

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