ANALYSIS: What the New President of the World’s 4th Most Populous Country Brings to the Table?

How will Indonesia’s new president affect trade and Beijing’s influence in the region?

Indonesian presidential candidate Prabowo Subianto, the current defence minister, addresses supporters at an event in Jakarta, Indonesia on Feb. 14, 2024. Oscar Siagian/Getty Images

Indonesian Defence Minister Prabowo Subianto announced his victory for the Feb. 14 presidential election, with early projections indicating a significant lead over competitors with an estimated 58 percent of votes in early counting.

In a victory speech he said, “This victory should be the victory for all Indonesians … we will assemble a government consisting of the best sons and daughters of Indonesia.”

A strong part of his appeal was that he would carry on outgoing president, Joko Widodo’s, economic policies.

Indonesia’s election was pivotal for the Asia-Pacific region, given the country’s strategic importance over critical shipping routes and its complex relationship with Beijing.

What Would a Subianto Presidency Mean for Australia?

According to DFAT, in 2021 the total two-way trade in goods and services between Australia and Indonesia was worth A$18.35 billion, and if anything this may improve under a Subianto presidency.

Australia exports wheat, coal briquettes, and iron ore to Indonesia while imports include crude petroleum, video displays, and shaped wood.

According to the Lowy Institute’s Rahmaan Yacob, a research fellow in the Southeast Asia Program, “Relations with Australia, especially in the defence area, may develop further” with Subianto’s victory.

“Prabowo is keen to develop further the Indonesian military capabilities, and he is keen to have access to Western military platforms and technology,” he told The Epoch Times.

Australia possesses much of this technology, which will likely see security ties between both countries enhanced.

A Subianto presidency could also see improved relations also on the economic front.

What About Indonesia-Beijing Relations?

A Subianto presidency is unlikely to see much shift in Indonesia and Beijing’s relationship, according to Mr. Yacob.

“Prabowo has already stated he will continue Jokowi’s policy of attracting investment, especially in the downstream of minerals and mining industry—thus he will maintain close economic relations with Beijing to attract Chinese investment,” he said.

Beijing’s Belt and Road initiative is already firmly entrenched in Indonesia and is a pivotal element in Indonesia’s development.

It is behind substantial infrastructure projects like the Jakarta-Bandung high-speed railway, and the establishment of numerous economic cooperation zones, accounting for nearly half of Beijings’s industrial parks in ASEAN.

Other Beijing investments include the construction of strategic airports and railways, with an investment portfolio touted at US$91 billion for 28 projects.

These endeavours align with the establishment of economic corridors across Indonesia, integrating former President Joko Widodo’s maritime and trade vision for his country.

Tensions Still Exist However

Despite this strong support for Beijing’s Belt and Road Initiative and other investment activity, there is still concern about Beijing’s actions in the South China Sea and the Natuna Islands.

Indonesia has experienced territorial breaches in its exclusive economic zone around the Islands from Beijing’s vessels in the past, leading to tension between the two countries.

Meanwhile, Indonesian fishermen face competition from larger Beijing-backed fishing vessels, affecting their catch. Further, Indonesia maintains its stance on drilling in the area despite Chinese claims and has strengthened its military presence in response.

Should Prabowo, known for his nationalistic views, consider Beijing’s presence near the Natuna Islands as a security threat, he might be further inclined to strengthen ties with Western nations.