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Indonesia's march towards middle-power status

By B A Hamzah - posted Friday, 4 August 2023

Indonesia looks poised for an economic boom that could spur its quest for a higher international political profile. Many scholars, politicians, and corporate figures believe the nation has the right attributes to become more than the regional power it is now.

For some Indonesians, Southeast Asia, comprising the 10 member countries in the Association of Southeast Asian Nations, is too small and too constraining a space for the nation that wants to spread its wings globally.

President Joko "Jokowi" Widodo came into office in 2014 enunciating a doctrine to make the country into a "Global Maritime Fulcrum," a maritime force between the Indian and Pacific Oceans, called at the time Indonesia's first actionable grand strategy. Its navy has shown occasional muscle in standing up to the Chinese to protect its sovereign waters. Chinese officials have sought to link the Belt and Road strategy to it, and US Secretary of Defense James Mattis acknowledged Indonesia as the "maritime fulcrum of the Indo-Pacific area" in a 2018 visit to Jakarta. While it has received less attention during his second term, it remains one of his signature contributions to Indonesian foreign policy.


The Indonesian economy has done well in the decades following 1989 reforms in the wake of the fall of Suharto and his kleptocratic New Order. A recent bi-annual World Bank report that assesses macroeconomic developments and specific risks has given the economic outlook for Indonesia a thumbs-up. The Indonesia Economic Prospects (IEP) projects moderate growth of 4.9 percent in 2023, slightly lower than its 5 percent growth in the past five years.

Jokowi, as the president is universally known, is convinced Indonesia will become the world's fourth largest economy by 2045. However, many others believe that Indonesia is on track to make it by 2050. The ambition could be derailed by political instability and extreme forms of religious radicalism that has its roots in rural poverty and income inequality.

Corruption remains endemic in Indonesia despite desultory efforts to curb it. But politically, given the leading candidates to replace him, Jokowi's expected possible successors all appear to be showing a healthy respect for democratic electoral principles so it is likely the ship of state will stay on an even keel without veering into autocracy or dictatorship.

External factors like an impending global recession and falling commodity prices for palm oil and nickel, for example, may upset the growth trajectory. Indonesia which holds more than a fifth of the world's nickel, the world's third largest source of cobalt and is also the world's largest exporter of palm oil in 2023.

With a population of more than 270 million and growing, it is the world's fourth most populous nation, the largest archipelagic country, the third largest democracy, and the largest Muslim nation.

Politically, under President Jokowi whose final Presidential term ends in February 2024, Indonesia has raised its political profile and with it his personal stature as a respected global statesman. Although Indonesia's modernization programs still lag South Korea, for example, in science, technology, innovation and industry, it is moving to close the gap slowly.


Despite having the largest economy in SEA, unlike Singapore, Indonesia is far from becoming a major financial center in the region. Its new capital, Nusantara, under construction, will take years before it matures into a metropolis.

Jokowi is the first Asian leader to visit Ukraine and Russia since the war in Ukraine. Although the dividends from his peace mission didn't change the course of the war, he has left behind a personal legacy on his people, as Sukarno, the first President did.

Ousted in a military coup in 1965, Sukarno is revered for putting Indonesia on the world map. Together with some leaders from the Third World, Sukarno founded the Non-Aligned Movement that lasts to this day. Among the most prominent world leaders who attended the Bandung Conference in 1955 were Indian Prime Minister Jawaharlal Nehru, Burmese Prime Minister U Nu, Egyptian President Gamal Abdel Nasser, and Chinese Premier and Foreign Minister Zhou Enlai.

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This article was first published by Asia Sentinel.

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About the Author

B A Hamzah is a Senior Research Fellow at the Center for Defense and International Studies, National Defense University Malaysia in Kuala Lumpur.

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