Strategic Interests, Regional Integration and International Economic Policy in Indonesia

The principles that undergird strategic and economic integration policy in Indonesia can be characterised by an emphasis on balance between powers, as well as by an emphasis on both economic and political sovereignty. As tensions between the United States and China intensify, and new opportunities like the Belt and Road Initiative take shape, Indonesian policymakers will increasingly be required to formulate new ways of achieving this balance. Indonesia’s role in the formulation of the Regional Comprehensive Economic Partnership (RCEP) provides an indication of what that balance will look like: using established forums like the Association of South-East Asian Nations (ASEAN) to deepen cooperation in the region in a way that promotes deep economic integration while engaging with and maintaining a balanced approach to all of the region’s strategic and economic superpowers. This chapter explores Indonesia’s approach to economic integration and security, first elaborating an analytical framework that describes the underlying considerations, and then considering three case studies of policymaking in action. Indonesia’s strategic interests are defined by maintaining balance between superpowers, guided by what is known as the bebas aktif (free and active) principles. Under these principles, Indonesia’s foreign policy refrains from taking part in global and regional rivalry, while at the same time defends its sovereignty and territorial integrity, and ensures stabil