Japan-Indonesia relations: A 50 years journey

Jusuf Wanandi, The Jakarta Post, Jakarta   |  Mon, 03/24/2008 1:09 AM 

Historically, Japan-Indonesia relations were never as dramatic as Japan's relations with China or Korea. Of course, we also went through a difficult period in World War II when the then Dutch East Indies was occupied by the Japanese Army for three-and-a-half years.

We were in a war, and war is always miserable. We experienced atrocities in some parts of Indonesia, such as in West Kalimantan, but that happened only at the end of the war and with limited victims. Most of the hardships and excesses happened because of the war situation. It should be noted that the Japanese occupation took place when a military dictatorship had ruled Japan since the early 1930s. And a dictatorship, especially a military one, can be really harsh and full of excesses.

On the other hand, the Japanese occupation also taught and did Indonesia some good, such as building a national administration, training a local army and at the end providing encouragement to become independent.

After Indonesia's independence was recognized at the end of 1949, talks began on war reparations in the mid-1950s after the San Francisco Agreement was signed and finalized with the Agreement on Compensation and the opening of diplomatic relations in 1958 between Japan and Indonesia. It was aid in human resources training and infrastructure building, besides trade, that came at the beginning of the formal relationship.

Under Sukarno's presidency the relationship was complicated because Japan was an ally of the United States while Sukarno was becoming more leftist in his foreign policy. But when Soeharto came to power, relations with Japan improved because Indonesia became closer to the United States. Japan took the lead to reschedule Indonesia's debts at the Tokyo Conference and became a big donor in the context of the Inter-Governmental Group on Indonesia (IGGI).

Japanese investment in Indonesia also increased and this happened at the same time Japan reached maturity in its industrialization, and therefore was looking for markets to export to and raw materials to import.

The first challenge arose when, mainly due to domestic political divisions within Indonesia, protests and mass actions against Japanese economic interests broke out in January 1974.

That incident provided a lesson to the Japanese on how to behave in order not to be seen as an "economic animal" and how to adjust to Indonesia's traditions and the psychology of the people. The so-called Tanaka riots taught the Japanese how to prepare their businessmen well.

Since then, relations have greatly improved, including in the area of labor relations. Japanese companies in Indonesia also began to send middle-level workers to Japan to learn about the industries they were in. This is a very good way to create a transfer of technology to Indonesians, the lack of which was a key issue in the criticism launched at the Japanese.

The Japanese had shown a commitment to assisting Indonesia consistently until the financial crisis in Indonesia in 1997, a time when Japan itself had already been facing a weak economy for eight years.

The crisis disheartened Japanese business to increase investment in Indonesia because Indonesia has never really recovered in business terms: Labor relations are not improving and the unions are too militant for them, infrastructure has not improved, the rule of law and its implementation have been very weak and corruption has not been adequately overcome.

Therefore, Indonesia has to do its part, before Japan, who has been well-disposed to Indonesia, could and would do more for us.

In strategic terms Japan is important to Indonesia. It is the second-largest economy and is very advanced in technology. It is also one of the two potential leaders of East Asia, with China. Unfortunately, Japan does not seem to have the strategy necessary to improve its presence in East Asia, because its political development is getting stuck.

The ruling LDP has lost its ability to run Japan effectively due to its weak leadership, while the opposition DJP has become stronger, but not strong enough to run Japan now.

In its foreign policy, Japan also has not been able to debate among its leaders what it is going to do in relation to the United States based on the alliance, on the one hand, and in relation to East Asia, where Japan has its greatest stake, on the other. This should not be a contradiction, but Japan needs to strike the right balance, and this is not happening.

There is also the question of ASEAN. There is a feeling of drift in ASEAN-Japan relations because despite some important initiatives on the Japan side, such as the establishment of the Economic Research Institute for ASEAN and East Asia (ERIA), there is not enough drive and push for the cooperation. This is also felt by Indonesia in bilateral relations with Japan.

Of course, Indonesia has to make improvements on many fronts, but it can only do this if Japan is more involved and more committed to Indonesia's economic development, and if it really considers Indonesia an important strategic partner. The pressure for changes should happen from within rather than from the outside. Japanese business will have more leverage in affecting Indonesia's policies if they remain involved in Indonesia.

In addition, Japan should be more forthcoming in assisting and supporting Indonesia's capabilities for leadership in ASEAN. Indonesia is expected to lead ASEAN and in partnership with Japan also play a greater role in the context of development in East Asia and globally.

For that purpose strategic dialogues are needed between Indonesia and Japan to be able to come up with more ideas and proposals than at present. This should not be confined to the governments, but should also involve different groups that can contribute to these efforts.

The bilateral Indonesia-Japan Colloquiums in the 1970s and 80s provide a useful model for this and can be reinstated with some adjustments to a new strategic environment and challenges.

The writer is the vice chair of the board of trustees of the Centre for Strategic and International Studies.