Australia-Indonesia relations are the strongest in 30 years.
So says Anthony Albanese when he, repeatedly, evokes the days of Paul Keating and the late Indonesian leader Suharto, implicitly transposing that uniquely close bond of the mid-1990s to his own budding friendship with Indonesia’s modern-day hardman, Prabowo Subianto.
There is a basis for the prime minister’s enthusiasm. It is called the Treaty on Common Security, a vague agreement inked in Jakarta last week against the geopolitical backdrop of a rising, pugnacious China and a vengeful United States.
In the event of “adverse challenges”, the text says, both nations will “consider measures which might be taken either individually or jointly”. Albanese described it as “historic”. Prabowo couched it as “good neighbourliness”.
The view from some in Indonesia is that it doesn’t go much further than the Lombok Treaty of 2006 and the Defence Co-operation Agreement of 2024; that it was the Australians who wanted it to be called a treaty because it sizzles more than the word “agreement”.
Even so, Albanese has Prabowo engaged and looking south, which is a big deal for an Australian prime minister. Since 1999, when Australia supported East Timor’s independence, the bilateral relationship has been marked by periods of scandal, indifference and frustration.
“The government is right to say that bilateral relations with Indonesia are on a firmer footing than in the past,” says Susannah Patton, a South-East Asia expert at the Lowy Institute.
“What was previously a rollercoaster relationship has been stable for about the past 10 years, without a major crisis.”
But with two such vastly different neighbours and world outlooks, she says: “It’s inevitable that there will be downturns in future.”
Critics accuse Prabowo, an ex-special forces commander once blacklisted by the Americans for human rights abuses, of continuing his predecessor’s “democratic backsliding”.
Meanwhile, Transparency International’s latest corruption perceptions index, released on Tuesday, has Indonesia slipping 10 places since last year to 109th out of a total of 182 nations. None of this can trouble Albanese too much, however, or he would hardly be able to deal with any South-East Asian nation, not to mention the US.
Trade between the two nations is on the agenda and while it is improving, it’s hardly booming. Indonesia’s 290 million citizens are right next door, yet it has only just broken into Australia’s top-10 two-way partners.
Indonesia’s economic fortunes are rising with a bullet. Over the next 15 years or so, it is predicted to rise from being the world’s 17th biggest economy to the top five.
Echoing Keating, Albanese, in his post-signing statement last week, went again to the mantra that “No country is more important to Australia”.
But is this really true? Professor Marcus Mietzner, from the ANU, says it’s not borne out in the statistics.
“Under the surface of the enthusiastic rhetoric, the economic relationship remains structurally underdeveloped,” he says. Indonesia literacy in Australia is the lowest in decades, he says.
“Albanese and Prabowo are both doing a good job in upholding the day-to-day and ceremonial side of the relationship, and they deserve credit for that.
“But the fundamentals – that is, where money is spent and on what – are best reflected in trade, investment and the core of defence relations, which for Australia remains intertwined with the US, not Indonesia.”
The signing comes months after Australia formalised the Pukpuk Treaty – a mutual defence pact – with Papua New Guinea, which, though unlikely, could cause problems with Indonesia.
The simmering conflict between the Indonesian military and separatists just over the porous PNG border spilled into public view just this week when Free Papua Movement rebels attacked a convoy of miner PT Freeport, killing an Indonesian soldier, according to the Indonesian government.
Separately, an Indonesian pilot and a co-pilot were chased into the forest and killed by unknown gunmen this week in Papua only about 100 kilometres from Australia’s newest ally. It is conceivable that clashes involving the Indonesian military could spill into PNG.
Asked about such a scenario at his press conference in Jakarta last week, Albanese deflected, saying Australia respected both Indonesia’s and PNG’s sovereignties.
In some ways, we won’t really know the value of the treaty until there is a crisis.
Susannah Patton, South-East Asia expert at the Lowy Institute
The trip to the palace was Albanese’s second since Prabowo’s inauguration in October 2024 and the welcoming ceremony was another grand and expensive gesture reflective of the leaders’ rapport.
Prabowo has what seems a genuine affection for Australia. As a young man, he trained at Duntroon in Canberra. He talks about Australian wharfies’ 1945 boycott of Dutch ships during Indonesia’s fight for independence.
When he was in Sydney last year, Indonesian media were tickled by the fact that he called his Australian counterpart “Albo”.
Still, Australia perhaps should not feel too special about the love. Unlike the previous president Joko Widodo, Prabowo is a globe-trotter testing the limits of Indonesia’s tradition of non-alignment. He likes the line, “1000 friends are too few, and one enemy is too many”, and he has been cultivating deeper ties with nations such as Russia and China at the same time as Australia.
The friend Prabowo really wants to add to his list, however, is Donald Trump. After more than a year trying to curry favour with the US president, and with a tariff deal hanging over his head, Prabowo joined Indonesia to Trump’s Board of Peace, causing problems at home from powerful Islamist groups who view the initiative as a means to Israel’s ends in Gaza.
This week, Indonesia said it could send as many as 8000 peacekeeping troops to Gaza, the only country so far to put forward a number since the board’s formation last month. Prabowo will attend its first meeting in Washington, DC, on February 19. Maybe he’ll finally get his sit-down with Trump.
Prabowo’s relationship with Albanese sits within his broader push to raise Indonesia’s heft to a level befitting the third-largest democracy in the world.
Exactly how the new treaty with Australia, which is not an alliance, might play out in real-world scenarios is not spelled out in the text. This is intentional so that neither country is locked into a move it regrets.
Patton, from Lowy, says it has a “brittle foundation” on the Indonesian side because it comes top-down from Prabowo (as is his style) and lacks strong buy-in from the bureaucracy.
“That could limit efforts to use the treaty to catalyse other co-operation, but it’s still better to have the agreement than not,” she says.
If there were crises over Taiwan or in the South China Sea, she says, Australia could argue it should be at the front of the queue with Indonesia to discuss a common response.
“I think that’s an important consideration, even if we accept that Indonesia is unlikely to respond the same way to these crises as Australia … because there is a risk that Indonesia could make decisions that would be adverse to Australian or US interests,” she says.
“In some ways, we won’t really know the value of the treaty until there is a crisis”.
Thrown together by geography and timing, the lefty raised by a single mum in Sydney council flats and the lectern-thumping military man are solid. At least for now.
