The Role Of Indonesia In The EU’s Indo-Pacific Strategy For 2024 – Analysis

The relationship between Indonesia and the European Union (EU) is set to become more strategically significant in the year 2024. This is due to the shifting global geopolitical landscape towards the Indo-Pacific region, which has drawn the interest of major global powers like the United States and China.

As the EU increases its involvement in this area, Indonesia, with its growing influence in the Association of Southeast Asian Nations (ASEAN) and its key geographical location, becomes an important partner for Europe. The EU aims to advance its Indo-Pacific strategy by strengthening cooperation with Indonesia, with a focus on regional security, economic integration, and sustainable development. This partnership presents significant opportunities for both sides. However, it also faces challenges, such as Indonesia’s domestic priorities, geopolitical tensions, and regulatory disparities. Therefore, Indonesia’s role in the EU’s Indo-Pacific strategy in 2024 will be crucial in shaping a future that promotes balance, cooperation, and sustainability in both regions. 

The significance of Indonesia to the EU in the Indo-Pacific framework is that it is a prominent member of ASEAN and one of the most influential nations in the region, both economically and politically. As the largest economy in Southeast Asia, Indonesia has established itself as a natural leader in ASEAN and actively shapes security, trade, and diplomatic policies in the region. This was evident during its chairmanship of ASEAN in 2023, where it prioritized regional autonomy, economic development, and internal stability. These priorities align with the EU’s objectives in the Indo-Pacific, which focus on regional security, economic resilience, and a rules-based international order. The convergence of Indonesia’s leadership and the EU’s strategic interests presents an opportunity for collaboration in 2024, particularly as the EU aims to strengthen its relations with ASEAN member states.

Economically, Indonesia is a vital partner for the EU as both regions seek to expand trade relations in the Indo-Pacific. Indonesia’s abundant natural resources, growing middle class, and emerging digital economy offer significant trade and investment opportunities for the EU. Ongoing negotiations for the Indonesia-Comprehensive EU Economic Partnership Agreement (IEU-CEPA) are expected to achieve important milestones in 2024 and are seen as a fundamental aspect of economic cooperation. This agreement will facilitate access to new markets for European companies, especially in manufacturing, digital services, and renewable energy. Additionally, it will grant Indonesia greater access to European markets and attract foreign direct investment. However, negotiations face challenges due to Indonesia’s focus on protecting its domestic industries, particularly in agriculture and mining. Balancing Indonesia’s protectionist tendencies with the EU’s desire for market liberalization will be a key challenge in 2024.

One area of promising collaboration between Indonesia and the EU in 2024 is the digital economy. With Southeast Asia experiencing rapid digital transformation, both regions are eager to leverage the potential of the digital sector for economic growth and innovation. While Singapore serves as the digital hub of ASEAN, Indonesia’s large and young population positions it as a significant player in the digital economy. The EU, with its advanced technological expertise, can support Indonesia’s digital development by investing in infrastructure, cybersecurity, and digital skills training. In 2024, there is an opportunity for the EU to collaborate with Indonesia in building the necessary digital infrastructure to bridge the digital divide in underserved areas. However, regulatory differences pose challenges, as the EU has established stringent regulations on data privacy and cybersecurity, while Indonesia’s regulatory framework remains fragmented and inconsistent. Harmonizing these standards is crucial to facilitate cross-border collaboration and foster a secure and thriving digital economy across ASEAN. 

In addition to its economic significance, Indonesia plays a crucial role in the security dimension of the EU’s Indo-Pacific strategy. The EU’s concerns about security challenges in the Indo-Pacific have grown, particularly regarding territorial disputes in the South China Sea, escalating tensions concerning Taiwan, and the strategic competition between the United States and China. Given its location along major maritime trade routes and its leadership position in ASEAN, Indonesia is well-suited to collaborate with the EU on regional security efforts. In 2024, collaboration is anticipated to focus on enhancing maritime security, including anti-piracy operations, ensuring freedom of navigation, and conducting joint naval exercises. Indonesia’s non-aligned policy and its emphasis on sovereignty align with the EU’s approach of promoting a rules-based international order and avoiding explicit military confrontations. Consequently, Indonesia has become a valuable partner for the EU in maintaining stability in the Indo-Pacific.

Environmental sustainability and climate action are pivotal areas where Indonesia and the EU have the potential to strengthen their partnership in 2024. With the urgent need to address climate change, the EU has positioned itself as a global leader in promoting green growth and environmental sustainability. Indonesia, with its vast forests, rich biodiversity, and potential for renewable energy, plays a crucial role as an ally in the EU’s efforts to combat deforestation, safeguard natural resources, and transition to a green economy. European companies have already expressed interest in investing in Indonesia’s renewable energy sector, particularly in solar and geothermal energy.

In 2024, both parties are likely to enhance their cooperation in green investment, sustainable supply chains, and efforts to reduce carbon emissions. However, Indonesia’s reliance on industries such as palm oil and mining, which have been associated with environmental degradation, presents challenges to the EU’s green agenda. Balancing Indonesia’s economic growth objectives with the EU’s sustainability goals will require careful consideration of development priorities and environmental protections. 

Despite the numerous opportunities for collaboration, Indonesia and the European Union (EU) face challenges in navigating their partnership in 2024. Geopolitical tensions in the Indo-Pacific region, particularly the ongoing rivalry between the United States and China, complicate Indonesia’s foreign policy decisions. Indonesia’s non-alignment policy, which prioritizes neutrality and sovereignty, may clash with the EU’s preference for aligning with Western powers, especially regarding security matters. Additionally, challenges within ASEAN could weaken Indonesia’s leadership in the region and complicate the EU’s engagement with Southeast Asia. As ASEAN member states grapple with political instability, economic difficulties, and differing approaches to external powers, maintaining unity within ASEAN becomes critical for Indonesia’s leadership and the success of the EU’s Indo-Pacific strategy. 

In conclusion, 2024 presents a pivotal moment for Indonesia and the EU as they aim to strengthen their partnership in the Indo-Pacific. Indonesia’s growing economic and geopolitical influence, combined with the EU’s strategic interests in the region, provide a solid basis for collaboration in trade, digital development, security, and climate action. However, challenges such as regulatory discrepancies, geopolitical tensions, and environmental issues must be addressed to ensure that their cooperation is beneficial for both parties and leads to a sustainable and prosperous Indo-Pacific region. Successfully confronting these challenges and seizing opportunities requires dialogue, mutual respect, and a shared vision. The success of the Indonesia-EU partnership in 2024 hinges on these factors.

The opinions expressed in this article are the author’s own.

References

• Chia, Siow Yue. “Singapore: A Hub for Southeast Asian Economic Integration.” In Southeast Asia in the Global Economy: Securing Competitiveness and Social Protection, edited by Shujiro Urata, 41-57. Singapore: ISEAS Publishing, 2011.
• Dosch, Jörn. ASEAN Economic Cooperation and Integration: Progress, Challenges, and Future Directions. New York: Routledge, 2014.
• European Commission. “The European Union’s Strategy for Cooperation in the Indo-Pacific.” European Commission, 2021.