Indonesia’s Wait-And-See Approach Towards Joining BRICS

Yves here. Even with China being a vastly more important a trade partner to Indonesia than the US (22.6% of 2022 exports versus 9.7% in the US), Indonesia so far has not applied to join BRICS. A big factor is that Indonesia exports to US friendlies Japan (8.5%), South Korea (4.4%) and the Philippines (4.4%) brings the total exports to the Western bloc to 39.5% of exports, versus 30.6% for China + India.

So I would not expect Indonesia to be up for BRICS membership any time soon.

By Andrew Korybko, a Moscow-based American political analyst who specializes in the global systemic transition to multipolarity in the New Cold War. He has a PhD from MGIMO, which is under the umbrella of the Russian Foreign Ministry. Originally published at his website

Indonesia is trying to balance relations with its top Chinese trade partner and its increasingly important American security one, but this is extremely difficult to do. On the one hand, China’s maritime claims are causing problems with fellow ASEAN members, while the US is trying very hard to create the optics that Indonesia supports its containment of the People’s Republic. Amidst such pressures, joining BRICS could have complicated Jakarta’s already challenging balancing act.

BRICS’ historic expansion that more than doubled its number of official members during the group’s latest summit in South Africa conspicuously omitted Indonesia. Hopes were high among observers that ASEAN’s largest economy would join after a recent statement from the host country’s Foreign Minister. Naledi Pandor claimed on 7 August per pages 7-8 of the official transcript of her remarks from that day that Indonesia officially expressed interest in becoming a BRICS member, though this wasn’t true.

President Joko Widodo (“Jokowi”) clarified during his statement at the summit several weeks later that “We intend to conduct a thorough study and calculation. We do not want to make any hasty decision. Our relations with the five BRICS member countries are also incredible, especially on economic cooperation. To become a new member of the BRICS group, a country must submit a letter of expression. Until now, we have not submitted that.”

His Foreign Minister Retno Marsudi confirmed a week later that “From the start there was an idea from BRICS to expand membership, all BRICS Foreign Ministers made an approach to Indonesia to invite Indonesia to join the BRICS. Internal studies are still being carried out to weigh the benefits from the political side, from the economic side. To join the BRICS, the country must submit what the ‘expression of interest’ letter conveyed…and until now we Indonesia haven’t conveyed it.”

What’s so interesting about this is that Indonesia had just as much time “to conduct a thorough study and calculation” to “weigh the benefits from the political (and) economic side” as the six countries that joined, yet it still didn’t even submit an “expression of interest” by the time the summit arrived. This strongly suggests that decisionmakers there have some serious concerns about the potential detriments of membership, at least at this point in time.

Indonesia is a major economy with a GDP of $1.32 trillion in 2022 according to the World Bank. To put that figure into context, it’s more than new BRICS members Ethiopia, Iran, and Egypt combined and is only barely bested by adding the UAE to this calculation. Indonesia’s GDP is also larger than Saudi Arabia’s $1.1 trillion last year. This means that it would have been the largest economy to join BRICS. For these reasons, it’s important to discover why it didn’t even officially convey interest in this.

While it can’t be known for sure, the case can compellingly be made that geopolitical pressure played an outsized role in its leadership’s reluctance. Although China is Indonesia’s top trade partner, Jakarta wants to avoid the optics of siding with Beijing on major matters. To be clear, BRICS isn’t Chinese-dominated despite the People’s Republic boasting the group’s largest economy by far, but it’s popularly perceived in the West as a means for that country to accelerate the expansion of its global influence.

Appearing to tilt closer to China than the US in the New Cold War between the SinoRusso Entente and the US-led West’s Golden Billion over the direction of the global systemic transition could have placed Indonesia in an undesirable position as was explained here. In brief, it’s caught between AUKUS-member Australia and that bloc’s US leader via the latter’s newly expanded military presence in the Philippines. From Jakarta’s perspective, care should therefore be taken to avoid inadvertently provoking them.

Had it agreed to join BRICS last month, then there was no guarantee that those two and whatever “agents of influence” they command within its borders wouldn’t overreact to that in ways that risked destabilizing it, even if only by trying to slow its nearly decade-high 5.31% yearly growth rate. At worst, this could have taken the form of waging Hybrid War on Indonesia, including through support of rebel/insurgent/separatist/terrorist threats by exploiting its internal fault lines that were detailed here.

The other geopolitical factor to consider is how polarizing China is becoming within ASEAN in spite of being each other’s top trade partner. Even before the release of that country’s new map earlier this week reaffirming its contentious nine-dash-line, Indonesia would have foreseen that the optics of tilting closer to China via formal BRICS membership could pose problems for ASEAN unity. It therefore wisely decided to sit out the group’s historic expansion last month in order to adopt a wait-and-see approach.

That was the right thing to do in hindsight since China’s aforementioned map sparked harsh condemnation from Indonesia’s Malaysian and Philippine neighbors. Foreign Minister Marsudi also issued a reminder that all territorial claims must be in accordance with UNCLOS. This alluded to the Indonesian Defense Minister agreeingwith his US counterpart last week that China is violating that aspect of international law, though he clarified that “it is a statement, but there was no joint statement.”

In any case, the point is that Indonesia is trying to balance relations with its top Chinese trade partner and its increasingly important American security one, but this is extremely difficult to do. On the one hand, China’s maritime claims are causing problems with fellow ASEAN members, while the US is trying very hard to create the optics that Indonesia supports its containment of the People’s Republic. Amidst such pressures, joining BRICS could have complicated Jakarta’s already challenging balancing act.

This insight reveals that Indonesia’s decision to pass up the opportunity to participate in BRICS’ historic expansion was driven by geopolitical factors and not by economic-financial ones. By adopting a wait-and-see approach, it hopes to retain balanced ties with the New Cold War’s primary Sino-US protagonists while preserving ASEAN unity. These calculations can change by the next BRICS summit since a lot could happen before then, but they’re still expected to remain constant unless something significant occurs.

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    1. SocalJimObjects

      Indonesia went with China and not Japan for its High Speed Rail system. Indonesia is also in the midst of building a new capital in Borneo, and there’s also a significant number of Chinese companies and capital invested in the island, here are the top 5:
      1. Tsingshan Holding Group. A Fortune 500 company and possibly the biggest nicker industry player in Indonesia. They and another group from China called Huafon group also invested around 3 billion USD to build a couple of factories in the island of Sulawesi.
      2. Northern Heavy Industries Group. I can only find figures from 2013 when they and 4 other partners invested 500 million USD.
      3. China State Construction Engineering Corporation.
      4. Northern University Engineering and Research Institute.
      5. Zhongtai Construction Group.

      I think the last three are big players in the Chemical Grade Alumina market, but then again these companies have hands in many pies, and yes they have invested quite a bit of money in Indonesia.

      Chinese smartphone makers like Xiaomi, Oppo, etc also have factories in Indonesia, because Jokowi was smart enough to make that a requirement for anyone wanting to sell smartphones in the country.

      One thing that’s rarely discussed in foreign articles about Indonesia is that 50% to 70% of the economy is controlled by people of Chinese descent, which make up at most 3% of the population, and unsurprisingly this has engendered a lot of jealousy from the rest of the population. But then again, for the longest time, local Chinese were barred from participating in politics, and they were subject to many persecutions. Had Indonesia gone ahead and joined BRICS, the optics certainly won’t look good on Jokowi. There’s already complaints of Chinese workers coming into Indonesia and taking local jobs, and in the last G20, Jokowi called Xi Jinping his Big Brother, no doubt in jest, but one should not underestimate the degree of animosity some of the locals have against anything Chinese.

      1. Roger

        Lest remember that only six decades ago the Indonesian military with help from the rest of the population were slaughtering over a million Indonesians of Chinese descent, fully enabled by the US. There may be a lot of racist animosity under the surface.

    2. Yves Smith Post author

      The intro pointed out that the the issue is not just China v. the US but v. US + US friendlies. Japan has been investing in Indonesia for a very long time. In the 1980s, they were moving chicken production and processing to Indonesia, for instance.

    1. SocalJimObjects

      Straight from the source: That’s in Indonesian, but you can put the first few paragraphs into Google Translate and get the same gist.

      Kompas is Indonesia’s preeminent newspaper, although I am not a big fan of its messy layout :) Prabowo has also made similar statements as in Indonesia not wanting to be part of any group in venues such as the Shangri La Dialogue, his speech in the venue last year was widely praised by the Chinese.

      Just a bit of context, Prabowo, the Indonesian’s Minister of Defense used to be a big rival of Jokowi, the Indonesian President. In fact, in the last presidential election they went head to head with Prabowo jumping the gun and declaring victory before all the ballots have been counted. Kinda reminds you of someone, isn’t it? :) Jokowi, in what must be one of his greatest and most inspired acts, then appointed his former rival as Defense Minister, and voila, the man has mellowed some and has since become one of Jokowi’s biggest fan, at least in appearance.

      In several speeches, Prabowo has said that he’s learned a couple of things from Jokowi, and they seem to work well together, so I have to think that in this very matter, Prabowo is indeed echoing what Jokowi is thinking. The Indonesian election is coming next year, and Prabowo is expected to run again, and there’s polls that show him winning. Jokowi, who has run and won two terms will have to step aside and play the role of Indonesia’s Less Famous Obama a.k.a Kingmaker with his endorsement expected to play a big part on who becomes President of Indonesia starting from 2025.

  1. The Rev Kev

    With the militarization of the Pacific, life is going to get harder as the west demands that countries in this region choose sides – or else. One country was set to buy Russian fighters on very favourable terms until the US threatened them with severe sanctions if they did – and that was only a few years ago. The US has already said that they intend to build a coupla dozen more bases in the Pacific so no doubt they have their eyes on Indonesia here. And when you consider that European countries say that they are going to expand into the Pacific, they will need bases as well. So for countries like Indonesia it will not be so much The Year of Living Dangerously as The Decade of Living Dangerously.

    1. Schopsi

      Bases that will be thinly manned because the US’s trouble with building up it’s own manpower are not going to go anywhere anytime soon.

  2. Kouros

    We’ll see also how the battle that Indonesian government started in order to protect its natural resources and climb up a bit on the valua added chain is going. All that nickel ore and what not. US and Canada are suing Indonesia at WTO, on that rule that “my stuff is mine and your stuff is mine as well”.

  3. Jorge

    There’s something that makes Indonesia invisible to the US, culturally. I’ve encountered a few emigrants from the 60s diaspora, and they don’t talk about it.

    The only Indonesian that I know of in pop culture was a Javanese actress who starred in European trash and porn films in the 60s/70s, Laura Gemser.

    It’s a massive country and very sealed off from the world.

  4. Jason

    China could easily win over a lot of allies, such as Indonesia, if it simply toned down its South China Sea disputes with ASEAN countries. Its current belligerent approach is an own goal (that’s a soccer analogy for folks in the US). It has failed to learned from its own diplomatic history of the 1970s, when its ending of support for communist insurgents in the region paved the way to normalizing relations with ASEAN.

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