Australia and Indonesia sign security treaties—but alignment with Jakarta remains elusive
The 2024 Defence Cooperation Agreement and 2026 Treaty on Common Security represent the most significant formalisation of Australia-Indonesia relations in decades. Yet Indonesia's commitment to non-alignment, ASEAN centrality, and economic ties with China means these agreements enable...
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The Archipelago of Ambiguity
On February 6, 2026, Australian Foreign Minister Penny Wong stood beside her Indonesian counterpart to announce what she called a treaty “modelled closely on the Agreement on Maintaining Security” signed by Paul Keating and President Suharto in 1995. That earlier accord lasted precisely four years before Indonesia unilaterally abrogated it over Australia’s role in East Timor’s independence. The new treaty builds on a defence cooperation agreement signed barely eighteen months prior, itself described as “the most significant defence agreement in the history of our two countries.” Such superlatives deserve scrutiny. Does this layered architecture represent a genuine strategic convergence, or merely the latest iteration of a relationship that oscillates between intimacy and estrangement?
The answer matters beyond Canberra and Jakarta. China’s economic and military footprint across Southeast Asia has grown relentlessly. Indonesia received $9.3 billion in Belt and Road Initiative investments in 2024 alone—more than any other country on Earth. Chinese firms now control substantial portions of Indonesia’s nickel processing capacity. Beijing is Indonesia’s largest trading partner, with bilateral commerce reaching $135-150 billion annually. Against this backdrop, Western strategists hunger for evidence that the region’s largest democracy might tilt toward counterbalancing Chinese influence. The Australia-Indonesia treaty looks, from certain angles, like precisely such evidence.
It isn’t. Or rather, it isn’t only that—and the distinction illuminates something fundamental about how power actually operates in maritime Southeast Asia.
Two Logics, One Sea
Australia and Indonesia share a maritime border spanning thousands of kilometres. They confront overlapping security challenges: illegal fishing, people smuggling, terrorism, the northward creep of Chinese naval activity. Their armed forces exercise together with increasing frequency. The 2024 Defence Cooperation Agreement enables enhanced cooperation in maritime security, counter-terrorism, humanitarian relief, logistics, and defence industry collaboration. The 2026 treaty formalises their “common interest in the peace and security of our region.”
This sounds like alignment. It is not.
The treaties rest on fundamentally different strategic grammars. Australia operates within what scholars call a Westphalian framework: clear borders, exclusive commitments, alliance structures with defined obligations. Its security depends on the ANZUS treaty with the United States, the AUKUS nuclear submarine partnership, and the Five Eyes intelligence network. When Australia looks at Indonesia, it sees a potential partner in a rules-based order that privileges freedom of navigation, adherence to UNCLOS, and resistance to Chinese revisionism.
Indonesia sees something else entirely. Its foreign policy doctrine—bebas dan aktif, or “free and active”—dates to the country’s founding and reflects a deep-rooted commitment to non-alignment. This is not merely diplomatic positioning. It emerges from what political scientists describe as a mandala conception of sovereignty: concentric circles of influence radiating outward, with relationships calibrated by proximity and context rather than locked into binary categories of ally or adversary.
The practical implications are stark. Australia wants Indonesia to choose. Indonesia refuses to choose—and considers the refusal itself a strategic asset.
The ASEAN Anchor
Indonesia’s commitment to ASEAN centrality is not a diplomatic nicety. It is the load-bearing wall of its regional strategy.
The Plan of Action for the Indonesia-Australia Comprehensive Strategic Partnership (2025-2029) explicitly acknowledges “the centrality of ASEAN in underpinning regional security and stability.” Both countries commit to “strengthen cooperation efforts through the ASEAN-led regional architecture.” This language is not boilerplate. For Indonesia, it represents a non-negotiable constraint on how far any bilateral security arrangement can go.
ASEAN centrality means that regional security discussions must flow through ASEAN-led mechanisms: the ASEAN Regional Forum, the ASEAN Defence Ministers’ Meeting-Plus, the East Asia Summit. It means Indonesia will resist any arrangement that appears to subordinate multilateral consensus to bilateral or minilateral groupings. It means, concretely, that Indonesia views AUKUS with deep suspicion—not because it fears Australian nuclear submarines, but because AUKUS represents precisely the kind of exclusive security architecture that threatens ASEAN’s role as the region’s diplomatic fulcrum.
This creates an irresolvable tension. Australia’s security strategy increasingly depends on tightening integration with the United States and other Anglophone allies. Indonesia’s security strategy depends on maintaining equidistance from all major powers while preserving ASEAN’s convening authority. The new treaties paper over this divergence. They cannot eliminate it.
“ASEAN centrality stands in the way of an Indonesia-Australia alliance,” as one analyst at the Lowy Institute put it. The observation is not criticism. It is geometry.
The Economic Undertow
Strategic autonomy requires economic autonomy. Indonesia has neither.
China’s economic penetration of Indonesia operates across multiple registers simultaneously. Trade dependency is the most visible: China absorbs Indonesian commodities and supplies manufactured goods at scales no other partner can match. But the deeper integration occurs through infrastructure and industrial policy. Chinese firms have invested heavily in Indonesia’s nickel processing sector, transforming the archipelago into a critical node in global electric vehicle supply chains. This creates technological lock-in: Indonesian facilities increasingly depend on Chinese equipment, Chinese expertise, and Chinese market access.
The Belt and Road Initiative investment report for 2024 documents Indonesia’s position as the world’s largest BRI recipient. This is not merely about money. BRI projects embed Chinese standards, Chinese contractors, and Chinese financing structures into Indonesian infrastructure. They create dependencies that persist for decades. When Australian policymakers imagine Indonesia pivoting toward a counterbalancing posture, they must reckon with the fact that such a pivot would require Indonesia to disentangle itself from economic relationships that now permeate its industrial base.
The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) offers an alternative framework. Australian investment in Indonesia grew modestly following its implementation. But the scale differential is overwhelming. China’s annual trade with Indonesia exceeds Australia’s by roughly a factor of five. No treaty can alter this arithmetic quickly.
Indonesia’s hedging strategy—maintaining security conversations with Australia, the United States, and Japan while deepening economic integration with China—is not incoherent. It is rational adaptation to structural constraints. The treaties with Australia provide optionality. They do not provide escape velocity.
The Ghosts in the Room
History weighs on this relationship in ways that official communiqués cannot acknowledge.
The White Australia policy, formally dismantled only in 1973, excluded Asian immigration for seven decades. Indonesian elites remember. They remember, too, Australia’s support for East Timor’s independence in 1999—a position Jakarta interpreted as interference in its territorial integrity. The 1995 security agreement collapsed in the aftermath. Trust, once broken, rebuilds slowly.
West Papua remains the most sensitive fault line. Indonesia expects Australia to respect its sovereignty over the territory. Australia’s official position does so. But Australian civil society, media, and some parliamentarians periodically raise human rights concerns. Each such episode triggers Indonesian suspicion that Australia has not truly accepted the territorial settlement. The Plan of Action commits both countries to “mutual respect for sovereignty and territorial integrity.” The commitment is real. So is the underlying tension.
Australia’s domestic politics compound the problem. Operation Sovereign Borders—the policy of intercepting and returning asylum seekers arriving by boat—treats Indonesia as a source of irregular migration to be managed. Simultaneously, defence planners treat Indonesia as a strategic partner in high-end deterrence scenarios. These frames coexist uneasily in Australian policy. Indonesian officials notice the dissonance.
The relationship also carries forward unresolved trauma from Indonesia’s 1965-66 anti-communist purges, in which Western intelligence agencies were complicit, and the 1998 anti-Chinese riots that accompanied Suharto’s fall. These events do not appear in treaty texts. They shape, nonetheless, how Indonesian policymakers assess Western intentions.
What the Treaty Actually Does
Strip away the strategic ambiguity and the treaties accomplish something real, if modest.
They establish frameworks for military-to-military contact at multiple levels. They enable joint exercises, personnel exchanges, and defence industry cooperation. They create bureaucratic channels through which Australian and Indonesian officials can coordinate responses to shared challenges—maritime security incidents, natural disasters, terrorist threats. They provide, in diplomatic parlance, “guardrails” that reduce the risk of misunderstanding during crises.
This matters. The Lombok Strait, separating Bali from Lombok, is one of the world’s most important maritime chokepoints. It also hosts some of the planet’s most powerful internal waves—underwater phenomena that have caused submarine accidents and complicate naval operations. Any serious regional security architecture requires Australian and Indonesian forces to operate safely in these waters. The treaties facilitate such cooperation.
They also serve domestic political functions in both countries. For Australia’s Labor government, the treaties demonstrate that the AUKUS partnership does not preclude engagement with Southeast Asian neighbours. For Indonesia’s President Prabowo Subianto—a former general with a complicated human rights record—the treaties signal international rehabilitation and professional military relationships.
But the treaties do not create a counterweight to Chinese influence. They do not commit Indonesia to any position on South China Sea disputes. They do not oblige Indonesia to participate in freedom of navigation operations or to support Australian positions in multilateral forums. They do not, crucially, require Indonesia to choose between its relationships with Australia and China.
Indonesia has no intention of making such a choice. The treaties are designed to ensure it never has to.
The Prabowo Variable
Indonesia’s new president introduces genuine uncertainty into the relationship’s trajectory.
Prabowo Subianto spent decades cultivating personal networks across the Indonesian military and political elite. His formative experiences include commanding elite forces in East Timor, marriage into the Suharto family, and a period of exile following the 1998 transition. He believes that personal relationships and loyalty bonds matter more than institutions. He believes that military strength and decisive action are essential to national sovereignty. He believes that economic development requires pragmatic partnerships regardless of ideological differences.
This profile suggests a leader who will deepen defence cooperation with Australia where it serves Indonesian interests—particularly in areas like military modernisation, training, and technology transfer. It also suggests a leader who will resist any arrangement that constrains Indonesian autonomy or appears to subordinate Jakarta to Western strategic priorities.
Prabowo’s economic nationalism complicates the picture further. He has emphasised food security and domestic industrial development. These priorities align, in practice, with continued engagement with China, which offers both markets for Indonesian commodities and investment in Indonesian processing capacity. Australia cannot match these offerings.
The personal chemistry between Prabowo and Australian leaders will shape how the treaties are implemented. But structural constraints will shape what implementation can achieve.
The Credibility Question
A counterweight requires credibility. Credibility requires capability and commitment. The Australia-Indonesia relationship has neither in sufficient measure.
Australia’s military is small by regional standards. Its defence industrial base struggles to meet domestic requirements, let alone support partner nations. The AUKUS submarine program—Australia’s most significant defence investment—will not deliver operational vessels until the 2030s at earliest. In the meantime, Australia depends on aging platforms and American extended deterrence.
Indonesia’s military faces different constraints. Its procurement is fragmented across multiple suppliers—American, European, Russian, Chinese—creating interoperability challenges. Its defence budget, while growing, remains modest relative to the archipelago’s scale. Its strategic culture prioritises internal security and territorial integrity over power projection.
Neither country can, independently or together, match Chinese military capabilities in Southeast Asian waters. The treaties do not change this reality. They create frameworks for cooperation. They do not create capabilities.
Commitment is equally uncertain. Australia’s 2024 National Defence Strategy emphasises “national defence” and the immediate approaches to the continent. Indonesia features prominently in Australian strategic documents—but so do many priorities that compete for limited resources. Indonesian planners have watched Australian governments come and go, watched policies shift with electoral cycles, watched the 1995 agreement collapse. They calibrate their expectations accordingly.
What Would Change the Calculus
Three developments could transform the relationship from framework to counterweight.
First, a significant Chinese provocation in Indonesian waters. Chinese fishing vessels and coast guard ships have already operated in Indonesia’s exclusive economic zone near the Natuna Islands. Indonesia has responded by renaming the surrounding waters the “North Natuna Sea” and deploying military assets—but has avoided direct confrontation. A more aggressive Chinese posture could shift Indonesian threat perceptions and create political space for deeper security cooperation with Australia and other partners.
Second, sustained Australian investment in Indonesian defence industrial capacity. Technology transfer, joint production, and long-term procurement commitments would create material dependencies that reinforce political alignment. The current treaties enable such cooperation. Whether it materialises depends on Australian willingness to share sensitive capabilities and Indonesian willingness to accept the conditions attached.
Third, evolution in ASEAN’s role. If ASEAN centrality weakens—through internal divisions, Chinese pressure, or simple irrelevance—Indonesia might recalculate the value of bilateral security arrangements. This would represent a fundamental shift in Indonesian strategic culture. It is not impossible. It is not imminent.
Absent such developments, the treaties will remain what they are: useful mechanisms for managing a complex relationship, not instruments for reshaping regional order.
The Honest Assessment
The Australia-Indonesia security treaties create neither a credible counterweight to Chinese influence nor a mere papering-over of irreconcilable differences. They occupy a third category: pragmatic accommodation between states with overlapping interests and divergent strategic logics.
Indonesia will continue hedging. It will deepen economic ties with China while maintaining security conversations with Australia, the United States, Japan, and others. It will resist any arrangement that requires choosing sides. It will insist on ASEAN centrality even as ASEAN’s capacity to shape regional outcomes diminishes.
Australia will continue hoping. It will interpret each new agreement as evidence of strategic convergence. It will invest in the relationship while simultaneously building capabilities and partnerships designed to operate without Indonesian participation. It will manage the cognitive dissonance between Indonesia-as-partner and Indonesia-as-uncertain-variable.
The treaties are real. The relationship they formalise is real. The counterweight they purportedly create is not.
This is not failure. It is the way international politics actually works in a region where no single power dominates, where economic and security interests diverge, and where the past refuses to stay past. Australia and Indonesia will continue dancing—close enough to cooperate, distant enough to preserve autonomy. The music is Chinese. Neither partner controls the tempo.
Frequently Asked Questions
Q: What is the difference between the 2024 Defence Cooperation Agreement and the 2026 Treaty on Common Security? A: The 2024 agreement focuses on practical military cooperation—joint exercises, logistics, training, and defence industry collaboration. The 2026 treaty is a broader political commitment formalising shared interests in regional peace and security, modelled on the 1995 Keating-Suharto agreement that Indonesia later abrogated.
Q: Why does Indonesia refuse to align with Australia against China? A: Indonesia’s “free and active” foreign policy doctrine commits it to non-alignment with any major power. ASEAN centrality—maintaining the regional bloc’s role as diplomatic fulcrum—is a core Indonesian interest that precludes exclusive security partnerships. Economic dependence on China, which is Indonesia’s largest trading partner, reinforces this posture.
Q: Could a crisis in the South China Sea change Indonesia’s position? A: Possibly. Chinese provocations near the Natuna Islands have already prompted Indonesian military deployments. A significant escalation could shift threat perceptions and create political space for deeper security cooperation with Australia and other partners. However, Indonesia has historically preferred diplomatic responses to military confrontation.
Q: How does AUKUS affect Australia-Indonesia relations? A: Indonesia views AUKUS with suspicion because it represents an exclusive security arrangement outside ASEAN-led mechanisms. Australian officials have sought to reassure Jakarta that AUKUS complements rather than undermines regional engagement. The tension remains unresolved.
Sources & Further Reading
The analysis in this article draws on research and reporting from:
- Australia-Indonesia Defence Cooperation Agreement announcement - Official statement on the 2024 agreement’s scope and significance
- Statement on Australia-Indonesia Treaty on Common Security - Foreign Minister Wong’s announcement of the 2026 treaty
- Plan of Action for Indonesia-Australia Comprehensive Strategic Partnership 2025-2029 - Detailed framework document outlining cooperation pillars
- China Belt and Road Initiative Investment Report 2024 - Data on Indonesia’s position as leading BRI recipient
- Lowy Institute analysis on ASEAN centrality - Expert assessment of structural constraints on the relationship
- National Museum of Australia on White Australia policy - Historical context for Australia-Indonesia relations
- ABC Science on internal waves and submarine operations - Technical analysis of Lombok Strait conditions
- 2024 National Defence Strategy - Australian strategic priorities and Indonesia’s place within them
