Brief for Peacock

Canberra, April 1976

CONFIDENTIAL

EXTRACT

Australian-Indonesian Relations and Possible Areas of Future Dissension

In recent years, Australia has had very good relations with Indonesia. President Suharto personally attaches a great deal of importance to the relationship. He continues to want to treat Australia as an honorary member of a sort of South East Asia club, an approach he has not adopted towards any other non-Asian country.

1. But good relations with Indonesia cannot be taken for granted. Years of patient work and understanding of Indonesian attitudes have gone into their building and equal effort will be required to maintain the relationship. Indeed, the next few years may prove more difficult for us than the last few.
2. In the first place it is to be expected that as our relations mature and pass beyond the mere search for mutual goodwill, issues and problems of substance will arise. Areas which could give rise to such problems include trade and investment, civil aviation, resources policies, extradition and so forth. We should expect, however, that these problems could be handled in a way which did not diminish the interest of both countries in maintaining a wider cooperative relationship.
3. Difficulties springing from our ethnic, cultural, social and linguistic differences, may prove harder to handle. The problem here is one of Australian attitudes. Indonesia, by and large, and despite Australian political vulnerabilities, has notably abstained from criticism of Australia. But over thirty years Australia has often criticised Indonesia.
4. There is a tendency among Australians to force their opinions on the Indonesians, to lecture them on the conduct of their domestic affairs, and to seek somehow to be the conscience of Asia. There is even the somewhat forced argument that the Indonesian regime is an aberration from the Asian norm and is an obstacle not only to good relations between Indonesia and Australia, but to good relations between Australia and Asia in general. There is a strong belief especially in parliamentary, student and amnesty groups in Australia that the Suharto Government’s image is tarnished-a feeling likely to increase as the Soekamo period recedes further into history and as the early promise of Suharto is eroded by corruption, nepotism and a failure to achieve a more equitable distribution of the fruits of economic growth. All this is compounded by opposition, in some political circles, to continuing the defence cooperation program and by pressures in some groups to cut civil aid.
5. Timor has added a significant new element of strain.
6. Naturally enough critical attitudes are resented by the Indonesian Government. There is an uneasiness that the Australian Government might be forced to drop its policies of cooperation and understanding. Our previous Ambassador in Jakarta used to say that President Suharto and those around him regarded Australia as unique among countries of Western origin in the degree of understanding that we showed for the complex social and political problems of Indonesia and the region. This Indonesian perception of our attitudes has been of great value to Australia.
7. It may perhaps be argued that all that is at stake is our relations with the Suharto Government, and that it is not so much this relationship which should count, but rather that with a future, more democratic Indonesian leadership. But our assessment is that Suharto is still very much in control and that, barring accidents, is likely to remain so at least through to the early 80’s. Should he die or otherwise be incapacitated we should expect that the character of the regime will remain much as is, with the Armed Forces continuing to wield effective power. Meanwhile, we expect that President Suharto would be very sensitive to any sign of Australia backing away either from him personally or his regime.
8. The risks of over-identifying with the present regime are to be recognised. But it should not be beyond the scope of our foreign policy to maintain links with a sufficiently wide cross­-section of influential opinion in Indonesia to ensure that we could weather any sudden change in the nature of the Indonesian leadership.
9. We have grown accustomed in recent years to a low profile Indonesia, whose attentions have been focussed on its own domestic problems and whose external and regional initiatives have invariably reflected moderate and even self-effacing policies. But these Indonesian attitudes are perhaps to be regarded as an aberration from more radical, nationalistic policies. Indonesian impatience with Western ‘softness’, the new flexibility afforded to Indonesia by its expanded oil revenues, and its heightened concern for internal and regional security in the wake of events in Indo-China, could now be nudging Indonesia in the direction of more assertive foreign policies. Indeed we may already be seeing something of this in Timor. The implications for Australia could be considerable mainly because public opinion will be highly sensitive to any reversion to the earlier assertiveness of Indonesian foreign policies.

Potential areas of friction

1. Several areas can be immediately identified as possible threats to our relations with Indonesia. They are Timor, PNG and detainees. Another could arise from differences of view regarding the wider problems of the region: in particular Indonesia’s perception of its strategic situation appears to be influencing it to retain its nuclear option; there is also the possibility that events in the region could induce Indonesia to embark on a major rearmament program. Finally, of course, friction inour relations with Indonesia could arise from the obvious disparities in wealth between the two countries.

Timor

1. The future of East Timor is clearly being determined in a manner which will continue to attract unfavourable criticism in Australia. There are no signs that Indonesia has dropped its policy objective of absorbing East Timor. Indonesia will not withdraw its forces. We could still find ourselves in a situation where we are the only, or the main, country in the region protesting about what Indonesia, and indeed most of its other ASEAN neighbours, would see as Indonesia’s legitimate national interest. The Indonesians might choose to sit out the period of the cooling of the relationship but there is still a possibility that we are in for a period of mutual recriminations during which extreme Indonesian nationalist feeling could be allowed to display itself against Australia.

[matter omitted]1

Conclusion

1. Contrary to much of our rhetoric, the Australian perception of the nature of Indonesian society is by no means a sympathetic one. It is rather characterised by an abiding uncertainty, even uneasiness, about our large and restless neighbour. And this breaks through to the surface at recurrent intervals—most recently over Timor—and extends across the range of the domestic political spectrum. There is thus a continuing possibility of adverse political reaction in Australia to particular events in Indonesia. This can have the effect of impelling us in directions in relations with Indonesia which are not necessarily in the best long term national interest and which ignore the fact that the price of a hostile or unstable Indonesia for Australia could be very high indeed.
2. To be fair to ourselves it should be said that in the last ten years Australian friendship has been of value to the Indonesian regime. For example, our efforts to secure liberal terms for the re-scheduling of Indonesia’s past debts and to increase IGGI2 understanding of Indonesia’s needs; Indonesia’s position as the largest recipient of Australian aid after PNG; and the program of defence cooperation. Australia has also developed a pattern of close political consultation with Indonesia.
3. In the process Australia has been seen, domestically and internationally, to be a good and close friend of Indonesia. This indeed is the impression that governments have sought to convey. Domestic opponents of the relationship have seen successive governments’ policies as being policies of uncritical support. The Indonesian Government, for its part, is quite aware of the nuances both of Australian public opinion and of Australian policies towards Indonesia. Its sensitiveness, feigned and real, in relation to unfavourable Australian critical comment has inhibited frank discussion. At the same time the Indonesians have avoided hostile over-reactions. They have thus played their part in keeping the relationship on the rails and in keeping us alert to the pitfalls that could easily loom.

[NAA: A2539, B76/70]

• 1 Omitted paragraphs refer to Papua New Guinea.
• 2 Intergovernmental Group on Indonesia.