Indonesia: A Potential Partner for Gulf States

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Indonesia: A Potential Partner for Gulf States

Indonesia is increasing its outreach to the Gulf. Governments in the region should seize the opportunity.

Indonesia: A Potential Partner for Gulf States
Credit: Jakarta skyline image via

In recent years, Indonesia has been interested in strengthening its footholds around the world by pursuing a policy of active and deep engagement with many of its partners. Despite being geographically separated from Indonesia by thousands of miles, the Gulf region is not an exception. There is a growing tendency in Indonesia to benefit from partnerships with the oil-wealthy countries of the Gulf. For a number of reasons, Gulf countries should also welcome Jakarta as a potential partner.

The contacts between Jakarta and the Arab world can be dated back to the first big wave of Arab immigration to the archipelago during the 13th century. A majority of these early immigrants were merchants and religious teachers from the Yemeni region of Hadhramaut. Despite the historical and cultural connections, Indonesia’s Gulf ties experienced a slowdown during the 1950s and early 1960s because of Jakarta’s far-out ideologies and its ‘Cairo-centric’ Middle East policy, which that characterized the tenure of the nation’s first president, Sukarno.

With Sukarno’s demise in mid 1960s and subsequent policy transformation, which turned Indonesia into one of the West’s important partners in the region, Jakarta’s attention toward issues in the Gulf or in the Middle East receded. Jakarta was compelled to restrict itself to rhetorical support to the Palestinian cause and participation in the Organization of Islamic Countries (OIC), even as its ties with the Gulf countries slowly took shape.

Similar to the majority of neighboring regional countries, which attained much of their economic prosperity under dictatorial regime, Indonesia’s rise as an Asian economic power began during Suharto’s brutal regime, even though Indonesia simultaneously experienced an unparalleled style of nepotism and despotism that hindered the nation from continuing its growth and development. While other countries in the region rescued themselves from debacle by establishing new systems of government, Suharto decided to continue with his harsh policies. This resulted in his demise in 1998 and the birth of the present political system based on pluralism and openness, a transformation that has positioned Indonesia with a new standing on the global stage.

Current Indonesian President Joko “Jokowi” Widodo’s visit to several Gulf countries last year distinguished him from his forerunners. The country is now not only home to the world’s largest Muslim population, but is also a rising Asian power with a number of potentials and opportunities. In addition, as Abdulla Al Madani argues, Indonesia also exemplifies religious and ethno-cultural tolerance, undeniably making the country pertinent to be the center for dialogue between the Islamic world and other civilizations. Added to this, Indonesia is now aiming more than ever before to promote stronger relationships with the Gulf countries. Considering a number of factors, the governments of the Gulf should respond to this move favorably.

Indonesia’s geographical position as Southeast Asia’s biggest economy and a G-20 member should convince Gulf policy makers that it is an alluring target for investment. It can be one of the primary destinations of Gulf investors, particularly in the fields of agriculture, banking, and infrastructure. Gulf countries such as Qatar, the UAE, and Oman, whose total investments in the archipelago have grown significantly, have all realized this. At the same time, with a population of over 250 million, Indonesia is a very enticing market for Gulf exports. This has been demonstrated in the recent years with the significant growth of trade between the two sides. As prospects appear to be generally positive, Jakarta and the Gulf should exert more efforts to consolidate many of these economic ties, including the creation of free trade agreements.

Besides economic cooperation, Indonesia’s strategic location also offers the Gulf governments an opening to strengthen its presence in the region. In recent years, many Gulf countries, with their ‘Look East’ policies, have been interested in luring investments and pursuing stronger partnerships with the countries of Asia. Indonesia could serve as a hub for the Gulf to expand itself both politically and economically in Asia and the Pacific. With no sign to an end to the instability in the Middle East, it should be no surprise that the Gulf countries see the growing economies of Southeast Asia as prudent alternatives.

No less important is that Indonesia could also be viewed by the Gulf countries as a large potential market for their petroleum exports. With petroleum demand having tumbled following the global financial crisis and the prospects remaining grim for the majority of the developed world, the oil-producing Gulf states have turned their attention toward growing Asia, which remains, and will continue to be, one of the world’s fastest growing energy markets. Once a major oil exporter, Indonesia now consumes as much as energy it produces. As the region holds the world’s largest oil and gas reserves, the Gulf states are expected to be the major suppliers of Indonesia’s increasing demand of energy.

Furthermore, as the two sides are often targeted by some violent groups seeking similar goals, the Gulf countries could also develop cooperation with the Indonesian government in the field of security as well as counter-terrorism.

Politically, the Gulf states could enjoy a reciprocal partnership with Jakarta, as its stance on several issues, such as the ongoing Syrian conflict and the Palestinian cause, largely corresponds with the Gulf governments’ positions. Indonesia could also be considered as a potential partner for mediating some of the ongoing conflicts in the Middle East. As the world’s largest Muslim populated nation, Jakarta enjoys relatively positive ties with all countries entangled in conflicts in the region, such as Syria, Saudi Arabia, Iran, and Yemen. There have never been direct conflicts or issues between Indonesia and Gulf states. Indonesia would therefore be well placed for involvement in conflict mediation in the region.

Muhammad Zulfikar Rakhmat is a Ph.D researcher at the University of Manchester.