Indonesia’s Probable Foreign Policy Shift From The West Under A Prabowo Administration – Analysis

By Melinda Martinus

The inauguration of Prabowo Subianto as Indonesia’s president and the appointment of Sugiono, a former military officer, as foreign minister mark a potential recalibration of Indonesia’s foreign diplomacy. This transition is expected to modify the foreign policy framework established during Joko Widodo’s decade-long presidency, which sought to serve domestic economic objectives over projecting regional or global leadership.[1] The new administration is anticipated to adopt a more assertive international stance, influenced by Prabowo’s personal experiences,[2] rapidly evolving geopolitical dynamics, Indonesia’s rising economic prominence, and a growing consensus among Jakarta’s policymakers on the need for a more proactive global diplomatic role.[3]

While the country may project stronger global leadership, Prabowo’s presidency is likely to gradually shift Indonesia’s alignment further away from Western alliances—a trend that had already gained traction among Jakarta’s foreign policy elites during Jokowi’s administration. Under Jokowi’s leadership, Indonesia developed closer economic ties with China, which has emerged as Indonesia’s major trade partner, and with Singapore, which is its largest provider of foreign direct investment (FDI). The previous administration also made some efforts at strengthening alliances within Asia, particularly through cooperation within ASEAN and with key economies like Japan and South Korea, including defence cooperation with Russia[4] and India.[5] Key drivers behind this shift include the need to bolster economic growth, reinforce the principle of non-alignment, and diversify international partnerships beyond traditional Western powers.

A few weeks after his inauguration, Prabowo’s administration signalled a reinforcement in this foreign policy direction, notably by deciding to become a BRICS partner. His first overseas trip was to China, where he met with President Xi Jinping to discuss economic and security cooperation. A surprise came with the joint statement issued after the bilateral meeting, which included an agreement on joint development in areas of the South China Sea where Indonesia and China have overlapping claims. This marked a significant departure from Indonesia’s previous stance on the South China Sea. With this statement, Indonesia appears to be the first ASEAN member state to implicitly recognise Beijing’s nine-dash line.[6]

This article seeks to further analyse four critical dimensions that influence Indonesia’s foreign policy pivot under the new administration, namely adapting to the US’ protectionism, managing the EU’s conditionality, advancing the Palestinian cause, and strengthening ASEAN resilience. The analysis provided in this article draws on insights from the multi-year data from the State of Southeast Asia surveys[7] conducted by the ASEAN Studies Centre of ISEAS –Yusof Ishak Institute to highlight emerging trends and anticipated shifts away from Western-led initiatives. Rather than making specific predictions, this article showcases long-term perception trends among Indonesia’s foreign policy elites through the use of data and evidence to elaborate on the changes in strategic alignments.

ADAPTING TO US PROTECTIONISM

Under Prabowo’s leadership, Indonesia is likely to sustain its focus on natural resource-driven and infrastructure developmental policies to meet an 8 per cent annual growth target—an essential step to reach high-income status by 2045.[8] The “downstreaming”[9] strategy initiated under Jokowi, which restricts exports of raw minerals like nickel and bauxite, aims to strengthen domestic industries and move Indonesia further up the value chain in electric vehicle (EV) battery production, something that has become a key economic policy.

However, the US Inflation Reduction Act (IRA) enacted in 2022 to bolster US industrial competitiveness, mandates domestic sourcing and assembly requirements, which many partners view as protectionist. The IRA’s tax credits for clean energy production, such as electric vehicles (EVs), favour materials sourced domestically or from countries with free trade agreements (FTAs) with the US. Since Indonesia lacks an FTA with the US, these policies effectively obstruct its ambition to integrate into the EV supply chain.[10] Additionally, the IRA restricts involvement from “foreign entities of concern,” notably targeting Chinese entities, who are instrumental in providing capital investment for Indonesia’s battery sector. The current political environment might complicate Indonesia’s ability to negotiate mineral and battery exports to the US.

Consequently, the Indo-Pacific Economic Framework for Prosperity (IPEF), a US-led initiative aimed at strengthening regional economic cooperation, has received only lukewarm interest from Indonesia. Indonesia perceives that the IPEF falls short of meeting its economic needs, especially as US policies like the IRA undercut the framework’s goal of enhancing connectivity with Asian partners. This disconnect reinforces Indonesia’s doubts about the framework’s benefits, particularly in light of restrictive US trade requirements that clash with its economic priorities. More so, the IPEF, focused on trade, supply chain resilience, clean energy, and economic fairness, does not include tariff reductions, which limits its appeal as a trade-enhancing agreement that is needed by most US trading partners in Asia.

According to the State of Southeast Asia survey, most Indonesian elite respondents initially expressed uncertainty about the IPEF’s benefits (see Chart 1). In 2023, 52.1 per cent were uncertain, while 34.7 per cent viewed it positively and 13.2 per cent negatively. However, by 2024, perceptions had shifted. Although the majority (41.9 per cent) of Indonesian respondents remained uncertain, the proportion of those with a negative view almost doubled to 25.7 per cent. Indonesia may perceive that joining the IPEF would not help to lift restrictions brought by the IRA.

Under Prabowo’s leadership, Indonesia is expected to remain wary of US protectionism, particularly following president-elect and now President Trump’s election and his pledge to increase tariffs on Asian imports. This concern is further heightened by the likelihood that his party will depart from Biden administration policies, downplaying the IPEF, and reducing focus on ASEAN engagement. This may prompt Indonesia to reduce its reliance on the US as an export market and to seek broader trade cooperation with less protectionist partners such as BRICS, which could offer alternatives to Western standards, and also with Asian countries like China, Japan, and South Korea. Additionally, Indonesia may deepen ties with the Gulf states, especially to generate new sources of FDI.

Chart 1 Growing Pessimism on the US-led Indo-Pacific Economic Framework for Prosperity (IPEF)

The overall impact and effectiveness of the US-led Indo-Pacific Economic Framework for Prosperity (IPEF) (according to Indonesian respondents), is likely to be:

The State of Southeast Asia: 2024 Survey Report (Singapore: ISEAS – Yusof Ishak Institute, 2024)

MANAGING THE EU’S CONDITIONALITIES

Amid rising US protectionism, Indonesia’s scepticism toward Western trade conditionalities is mirrored in its diminishing perceptions of the European Union (EU). As Indonesia’s fifth-largest trading partner and a major source of foreign direct investment,[11] the EU has traditionally been valued as an alternative partner for export market, particularly as global trade adapts to the intensifying US-China trade war and China’s domestic economic turbulence. However, Indonesia increasingly views EU regulatory stances, on standards such as sustainability, labour protection, and human rights, as restrictive. This adds challenges to the forging of functional relationships and tampers enthusiasm for deeper economic alignment.

The EU’s efforts to assert global leadership in carbon reduction, as pledged in the Paris Agreement and operationalised through the EU Green Deal, has increasingly incorporated extraterritorial regulations affecting trade partners. Policies like the EU Deforestation Regulation (EUDR) and the Carbon Border Adjustment Mechanism (CBAM) require trade partners to meet elevated environmental standards. These have generated negative sentiments, with Jakarta viewing them as forms of economic coercion[12] that infringe on its sovereignty and development ambitions; this complicates relations between the EU and Indonesia broadly.

The situation has further diminished perceptions of the EU among policymakers in Jakarta (See Chart 2). According to the State of Southeast Asia surveys, Indonesian respondents initially held favourable views of the EU’s role in promoting global free trade. In the 2021 survey, 29.5 per cent of respondents viewed the EU as a primary leader in this area, ahead of China (20.9 per cent), ASEAN (19.4 per cent), and the US (15.5 per cent). However, by 2024, perceptions had shifted dramatically, with only 8.3 per cent of Indonesian respondents regarding the EU as showing leadership, placing it in fourth place alongside the US.

Chart 2. Confidence in the EU’s leadership in championing the global free trade agenda has been dwindling, 2021 versus 2024

Who do you have the most confidence in to champion the global free trade agenda? (This is according to Indonesian respondents)

The State of Southeast Asia: 2021 and 2024 Survey Reports (Singapore: ISEAS – Yusof Ishak Institute, 2021 and 2024)

The Prabowo administration is likely to intensify Indonesia’s stance against EU trade conditions by promoting partnerships with countries imposing fewer constraints. In seeking alternative alliances, Prabowo aims to reinforce Indonesia’s economic sovereignty, advocating trade frameworks that support domestic industries free from restrictive external pressures.[13] This approach underscores Indonesia’s commitment to a global economic order that accommodates diverse development paths, thus protecting its own strategic interests amid shifting international dynamics.

ADVANCING THE PALESTINIAN CAUSE

Indonesia’s trust in the Western alliance has been strained due to the latter’s perceived partiality in the Israel-Gaza conflict and double standards. Western nations, including the US and EU members, often advocate for human rights, international law, and civilian protection, most recently when they were rallying support for Ukraine. However, in the Gaza context, Indonesians see the West’s support for Israel as blatant ignoring of the humanitarian crises faced by Palestinians; this fuels perceptions of selective enforcement by the West of international norms based on political interests rather than universal principles. This sentiment resonates deeply with Indonesian public opinion. According to the State of Southeast Asia 2024 Survey, about three-quarters (74.5 per cent) of Indonesian respondents viewed the Israel-Hamas conflict as the top geopolitical concern for their government while 77.7 per cent believed that Israel’s attack on Gaza had gone too far.

Trust in Western alliances, particularly the US and EU, has trended downward among Indonesian respondents in the State of Southeast Asia Surveys over the past six years (see Chart 3). This decline was especially sharp for the EU in 2024, reaching an all-time low, largely due to the West’s stance on the Gaza conflict. Trust in the US was initially low in 2019–2020 under Trump’s leadership but improved under Biden’s administration, with the latter emphasising US re-engagement with Asia. However, the trust in the US has been tempering again over the past two years. This could be attributed to the US’ lack of concrete functional cooperation in Asia, and the worsening situation in Gaza.

Chart 3. Declinig confidence in US and EU leadership

How confident are you that the US and the EU (respectively) will do the right thing to contribute to global peace, prosperity, and governance? (This is according to Indonesian respondents who indicated confident and highly confident)

The State of Southeast Asia: 2019-2024 Survey Reports (Singapore: ISEAS – Yusof Ishak Institute, 2021-2024)

To complicate matters, amid ongoing US-China geopolitical tensions in Southeast Asia, Indonesia is often viewed as a country capable of maintaining a strategic balance. Since the 2020 survey introduced a question on ASEAN’s strategic preference between the US and China, Indonesian respondents have shown a consistent approach towards balancing the two powers. In 2020, by a slim margin at 52.0 per cent, Indonesians chose China over the US (which garnered 48.0 per cent) (see Chart 4). Between 2021 and 2022, most respondents had leaned toward the US. However, by 2023, preferences had shifted significantly, with 53.7 per cent favouring China compared to 46.3 per cent for the US. In 2024, the gap substantially widened, with 74.2 per cent favouring China and only 26.8 per cent choosing the US. This significant shift signals that the US’ stance on the Gaza conflict has undermined its reputation in Indonesia.

Chart 4. Future of ASEAN amid China-US rivalry

If ASEAN were forced to align itself with one of the strategic rivals, which should it choose? (This is according to Indonesian respondents)

The State of Southeast Asia: 2020-2024 Survey Reports  (Singapore: ISEAS – Yusof Ishak Institute, 2021-2024)

REVIVING ASEAN-CENTRIC REGIONALISM

Amid today’s global uncertainties, Indonesia must find a pathway to navigate the escalating geopolitical competition. Enhancing its leadership within ASEAN and reinforcing regionalism may provide a cushion in case of future conflicts. Consequently, Prabowo is likely to project a more proactive regional role. While Prabowo may insist that his administration must adhere to a “free and active” foreign policy and maintain balanced ties with both the US and China, he is expected to adopt a more assertive stance within ASEAN, particularly on security and economic matters.[14]

This strategy corroborates well with the views of foreign policy elites in Jakarta. According to The State of Southeast Asia surveys, Indonesians increasingly view ASEAN as an essential counterbalance to China’s dominant economic role in the region (see Chart 5). Although China continues to be regarded as the most influential economic power in Southeast Asia, Indonesia’s confidence in ASEAN is gaining momentum. When the first survey was conducted in 2020, only 10.4 per cent of Indonesian respondents viewed ASEAN as the most influential economic force in the region; by 2024, this share had nearly tripled (28 per cent). Amid geoeconomic uncertainties, ASEAN has upheld its multilateral trade frameworks, most notably through the Regional Comprehensive Economic Partnership (RCEP), and continues to negotiate trade agreements and investment facilitation with major dialogue partners. This openness and commitment to multilateral systems have led Indonesians to place high hopes in ASEAN.

Chart 5. China remains the most influential economic power, while confidence in ASEAN continues to rise

In your view, which country/regional organisation is the most influential economic power in Southeast Asia?

The State of Southeast Asia: 2019-2024 Survey Reports (Singapore: ISEAS – Yusof Ishak Institute, 2021-2024)

A similar trend is observed in perceptions of global leadership. In the same surveys, respondents were asked which country or regional organisation they had the strongest confidence in to provide leadership in maintaining the rules-based order and upholding international law. Among Indonesian respondents, ASEAN has increasingly been seen as the leader in this regard over the past three years, surpassing the EU, which held that position in 2021 (see Chart 6). ASEAN has consistently advocated for a rules-based multilateral system, both regionally and globally. It has promoted dialogue, cooperation, and the peaceful resolution of disputes through frameworks such as the ASEAN Regional Forum (ARF) and the East Asia Summit (EAS). ASEAN also played a critical role in advocating the implementation of the 2002 Declaration on the Conduct of Parties in the South China Sea (DOC) and the ongoing negotiations for a Code of Conduct (COC) to manage regional tensions. Although progress has been slow, ASEAN continues to emphasise the importance of international law in resolving conflicts. 

Chart 6. ASEAN increasingly seen as the leader in maintaining rules-based order and upholding international law 

Who do you have the most confidence in to provide leadership to maintain the rules-based order and uphold international law? (This is according to Indonesian respondents)

Looking at this trend, Indonesia could advocate a stronger regional security architecture, and emphasise the defence of maritime sovereignty amid Chinese incursions. On the economic front, the Prabowo administration may focus on improving intra-regional trade, strengthening supply chains, and boosting investment within Southeast Asia. However, structural challenges within ASEAN, such as divergent interests and strategic misalignment among member states, will likely constrain progress toward a collective regional security framework. Despite these challenges, Indonesia is expected to remain committed to ASEAN centrality, and to use that as a platform to balance external powers and promote autonomy.[15]

CONCLUSION

In conclusion, Indonesia’s foreign policy under Prabowo Subianto is poised to mark a significant shift away from its traditional Western alliances, reflecting both changing domestic priorities and evolving geopolitical dynamics. The administration’s focus on economic growth, regional security, and international diplomacy is likely to reinforce Indonesia’s strategic autonomy, with particular emphasis being put on deepening ties within Asia and diversifying its partnerships. With the appointment of several former military personnel to his Cabinet, including as foreign minister, Indonesia is expected to adopt a more security-oriented lens in its economic policies and international diplomacy.

Indonesia’s growing scepticism towards Western trade conditionalities, such as those imposed by the US and EU, will likely continue to influence its foreign policy direction; it is expected to seek alternatives to economic frameworks that are perceived as restrictive.

At the same time, Indonesia’s commitment to ASEAN as a central platform for regional cooperation and leadership, particularly in upholding a rules-based order, reflects the nation’s desire to enhance its regional influence while navigating the complex US-China rivalry. As the Prabowo administration seeks to recalibrate Indonesia’s international posture, the evolving trends in regional and global leadership suggest that Indonesia’s foreign policy will increasingly be driven by a vision of economic sovereignty and multilateral engagement, with ASEAN and potentially BRICS playing a pivotal role in this transformation.

For endnotes, please refer to the original pdf document.

• About the author: Melinda Martinus is the Lead Researcher in Socio-cultural Affairs at the ASEAN Studies Centre, ISEAS – Yusof Ishak Institute.
• Source: This article was published by ISEAS – Yusof Ishak Institute.