Q+A
M. Chatib Basri answers questions about his paper, exploring Indonesia’s strategic alignment and leverage, maritime position, and the implications of domestic reform on Indonesia’s regional impact.
Q: Many readers may assume Indonesia benefits from staying neutral. What are the hidden risks of remaining passive amid intensifying U.S.–China rivalry?
A: Our paper argues that neutrality without strategy is not safety, it is drift. Remaining passive carries three major risks:
Shrinking strategic autonomy.
As U.S.–China rivalry becomes more zero-sum, both sides increasingly expect partners to align with their networks—whether on technology, defense, or supply chains. A passive Indonesia may face pressure to choose, but with fewer tools to influence the terms of choice.
Becoming a rule-taker.
Key domains, digital standards, critical minerals, trade, and green technology—are moving toward bloc-based rules. If Indonesia remains reactive, it will be shaped by these rules, not shape them.
Exposure to weaponized interdependence.
Concentrated supply chains and geopolitical shocks can make Indonesia vulnerable. Passivity leaves Jakarta absorbing great-power competition rather than using it to build resilience.
In short, “neutrality” may quietly erode Indonesia’s autonomy unless accompanied by active strategy.
Q: You distinguish between Indonesia’s “passive assets” and “active capital.” Could you share a vivid example of how geography, minerals, or diplomatic networks can be transformed into real strategic leverage?
A: Our paper defines passive assets as Indonesia’s geography, size, minerals, and diplomatic history—advantages that remain static unless activated to shape others’ behavior.
A concrete example is nickel as green-transition leverage. As a passive asset, nickel merely attracts smelters and generates export revenue. But as active capital, Indonesia can use its nickel dominance to: set higher ESG and transparency standards across global EV and battery supply chains, require technology transfer and skills upgrading from foreign partners, and convene producer–consumer dialogues on clean-energy materials. Indonesia could even position its nickel sector as a quiet bridge between Washington and Beijing. Because both the U.S. and China depend on secure, sustainable critical-minerals supply, Indonesia can explore structured cooperation among the three, whether through joint research initiatives, harmonized sustainability benchmarks, or trilateral forums on responsible sourcing.
We are not naïve: this will not be easy, given strategic mistrust and intensifying rivalry. But it at least opens space for continued communication among the three powers and strengthens Indonesia’s ability to leverage its position rather than simply reacting to great-power competition.
Similarly, Indonesia’s diplomatic networks: ASEAN, G20, JETP, Pandemic Fund become active capital when used as continuous platforms for agenda-setting, not just episodic hosting roles.
Q: Indonesia sits astride one of the world’s most important maritime chokepoints. How could its maritime position, especially in the Malacca Strait, shape the behavior of both the U.S. and China?
A: Maritime Geography: Influence Through Subtle Leverage
Our paper argues that Indonesia’s location, linking the Indian and Pacific Oceans and sitting near the Strait of Malacca—is a major but underused source of influence. Indonesia cannot dictate great-power behavior, but geography gives it quiet leverage when paired with rules and institutions.
Indonesia could nudge U.S. and Chinese behavior by:
Embedding their naval activities in cooperative frameworks
Joint work on piracy, illegal fishing, maritime domain awareness, and humanitarian response socializes both powers into Indonesian-led procedures.
Strengthening multilateral maritime governance
Through ASEAN, IORA, the EAS, or Shangri-La side-platforms, Indonesia can advance rules neither the U.S. nor China can ignore. Because both depend on safe passage through Malacca, Indonesia’s geography—when activated institutionally—encourages greater transparency and stability in their behavior.
Nickel and EV Supply Chains: Realistic, Measured Leverage
Nickel gives Indonesia unusual convening potential, though not unlimited power. The report stresses that Indonesia can shape—not control—how the U.S. and China engage in critical-mineral supply chains.
Indonesia could:
Facilitate overlapping supply-chain cooperation
The Ford–Huayou–Vale venture shows U.S. and Chinese firms can operate side-by-side in Indonesia when rules are clear.
Establish a common ESG and technology-transfer framework
Setting uniform standards for all partners would shift Indonesia incrementally from commodity supplier to rule-setter.
Link nickel to broader green-transition cooperation
Such as renewable energy projects, battery recycling, or a regional research center.
We are not naïve: convening Washington and Beijing will be difficult. But nickel offers structured channels for ongoing communication, preventing complete decoupling and enhancing Indonesia’s strategic relevance.
To make this credible, Indonesia needs:
a more predictable, diversified investment environment;
stronger environmental and labor safeguards;
a clearer and more stable critical-minerals policy.
With these reforms, nickel becomes active capital—a tool to keep both powers engaged on Indonesian terms, even amid rivalry.
Q: The report emphasizes domestic reform as a prerequisite for greater strategic influence. Which internal changes —economic, defense, or diplomatic would most quickly expand Indonesia’s regional impact?
A: The conclusion is direct: international leverage depends on domestic capability. The most important reforms are:
a) Economic reforms
These provide the foundation for global influence:
Improving regulatory certainty and logistics to attract more diverse FDI.
Raising productivity and shifting toward higher-tech manufacturing.
Expanding fiscal capacity through savings and tax reforms.
b) Defense and maritime capability
Our paper describes Indonesia’s military weight as limited and overly internally focused. Rapid gains could come from:
Strengthening maritime domain awareness and coast-guard capacity.
Updating doctrine and joint-exercise structures.
Investing in human capital for long-term modernization.
c) Diplomatic and bureaucratic reform
Indonesia’s foreign-policy machinery needs to be further strengthened:
Institutions such as the MFA could operate even more effectively with enhanced analytical capacity, additional staffing, and stronger budgetary support.
Diplomacy should gradually shift from an event-driven approach toward more sustained agenda-setting.
Indonesia would benefit from more fully leveraging ASEAN, G20, MIKTA, IPEF, and JETP as continuous platforms for advancing its strategic priorities, rather than as occasional appearances.
These reforms, especially economic and maritime, are the quickest ways to translate Indonesia’s large passive assets into active capital that shapes the Indo-Pacific strategic environment.
Case Study
In a new study for the Middle Powers Project, M. Chatib Basri and Evan A. Laksmana explore how “active alignment” can help Indonesia shape strategic competition between the United States and China, facilitating cooperation between the major powers to support Indonesia’s own strategic priorities. The Middle Powers Project is in collaboration with the Belfer Center for Science and International Affairs.
Feature
This past semester, the Rajawali Foundation Institute for Asia engaged in conversations and research on topics ranging from Indonesia’s election to US-Taiwan relations with the goal of continuing to develop policy solutions to the region’s most pressing concerns.
Feature
Democracy and development were on the ballot during Indonesia’s national elections earlier this month according to experts at a Rajawali Foundation Institute for Asia event on what Prabowo Subianto’s victory now portends for the future of the country.