The Indonesia of Prabowo Subianto navigates international pressures and national ambitions, balancing Chinese control over nickel, tensions in the South China Sea and the return of the military to power
In the heart of Southeast Asia, Prabowo Subianto’s Indonesia is emerging as a geopolitical laboratory where the ambitions of the great powers and the country’s aspiration to a “bebas-aktif” – free and active – foreign policy intertwine. The former general, who became president in October 2024, inherited a country poised between the economic opening promoted by his predecessor Joko Widodo and the ambition of a strategic autonomy that would protect national interests in an era of increasing competition between the United States, China and emerging powers. The promise of development through foreign investment clashes with protectionist tendencies, while foreign control over natural resources fuels internal social tensions.
In this complex scenario, Indonesia attempts to transform its strategic geographical position and wealth of natural resources into diplomatic leverage, so as to be able to maintain independence in an increasingly polarised world. A recent BRICS member and a reluctant participant in US-China competition, a global nickel producer and the theatre of a growing internal remilitarisation – this country of 270 million inhabitants is at the crossroads of global dynamics that are redefining its trajectory. The new Prabowo administration, with its contradictions and ambiguity, thus becomes a prism through which to observe the transformations of a rapidly evolving international order, where the boundaries between cooperation and competition, openness and protection, the civil and the military, become increasingly blurred.
I. STRATEGIC REBALANCING: BETWEEN THE ‘OMNIBUS LAW’ AND ECONOMIC PROTECTIONISM
The Indonesian economic strategy reveals a profound internal contradiction that undermines its coherence and effectiveness. On the one hand, the Omnibus Law on Job Creation, approved under Widodo in 2020, attempted to simplify bureaucracy and attract foreign investment by creating a business-friendly climate. On the other hand, an import substitution strategy aims to reduce imports by up to 35% through restrictive national rules. The paradoxical coexistence of these two visions manifested itself in the clash between Apple and the Indonesian government at the end of 2024, when the sale of the iPhone 16 was blocked for alleged violations of policies on local content. The incident signaled to global investors the risks of the unstable regulatory environment that characterises the country, despite promises of liberalisation.
Indonesia’s recent accession to BRICS as the first Southeast Asian country to become a full member is an attempt to diversify its economic and diplomatic options. Access to the BRICS’ New Development Bank provides an alternative to traditional financial institutions for financing infrastructure and sustainable development projects. Energy cooperation is of particular importance, with an emphasis on the green transition through hydrogen and carbon capture technologies. However, the entry into BRICS risks further complicating the delicate balance with Western partners, especially the United States, with which Indonesia maintains a trade surplus of $18 billion, now threatened by the 32% tariffs announced by the Trump administration and subsequently postponed to July. The Prabowo government is thus in a delicate position: on the one hand it seeks to gain negotiating leverage thanks to its membership in BRICS, on the other hand it must appease Washington’s irritation by offering trade concessions and military purchases to mitigate the impact of US protectionist policies.
II. THE NICKEL QUESTION: STRATEGIC RESOURCE AND SOURCE OF SOCIAL TENSIONS
The nickel sector is the beating heart of Indonesian industrial strategy and at the same time its Achilles heel. Data from 2023 indicate that Chinese companies control about 75% of Indonesia’s nickel refining capacity, with only two companies – Tsingshan Holding Group and Jiangsu Delong Nickel Industry Co Ltd – accounting for more than 70% of that capacity. This dominance has transformed Indonesia into the world’s leading producer of the metal, supplying a total of 1.8 million tonnes, that is 51% of global production. But this rise has come at the price of a substantial loss of sovereignty over a strategic sector, as Chinese control limits the country’s ability to steer the industry to its own advantage.
The nickel race has taken a heavy human toll. China Labor Watch has documented 77 deaths and 120 injuries at various nickel plants backed by Chinese capital in Indonesia between 2016 and 2024. The Indonesia Morowali Industrial Park (IMIP), one of the world’s largest centres of nickel processing and stainless steel production, has been the scene of repeated fatal accidents. In October 2024, an explosion at a steel factory caused the death of a crane operator, while the worst accident in the park’s history occurred in December 2023, when an explosion at a nickel plant left 21 people dead and 46 injured. Investigations have revealed systematically inadequate safety practices, insufficient protective equipment and poor communication between Indonesian and Chinese workers. “Production first, safety second,” summed up an Indonesian Tsingshan Stainless Steel worker, while a recent survey found that the average working hours of employees at IMIP is 56 hours a week or 225 hours per month, well above acceptable standards.
The social implications of this nickel race extend beyond the confines of industrial plants. The rapid expansion has transformed the demographics of entire regions: Bahodopi, the industrial center of Morowali, has seen its population go from 7,517 residents in 2017 to about 50,000 in 2022, resulting in pressure on infrastructure and housing. Indonesian workers often find themselves in makeshift dwellings made from recycled materials, located near the chimneys of the plants and coal-fired power plants, with air pollution leading to lung diseases among the residents. Chinese workers, who account for about 13% of IMIP’s total workforce, are also subject to unacceptable employment practices, including seizure of passports, withheld payments and restrictions on their freedom of movement. These social and environmental costs pose serious questions about the sustainability of the development model adopted, especially considering that the growing demand for nickel, driven by the energy transition, will continue to incentivise companies to increase productivity at the expense of the safety of workers and local communities.
III. THE DIPLOMATIC DANCE BETWEEN MOSCOW, BEIJING AND WASHINGTON
The recent diplomatic storm sparked by an indiscretion about an alleged Russian request for an air base in Biak, in the Indonesian province of Papua, has highlighted the complex geopolitical dynamics in which Jakarta is entangled. On 14 April 2025, the influential journal Jane’s, which specialises in defence, reported that Moscow supposedly asked Indonesia for permission to base Russian Aerospace Forces (VKS) aircraft at the Manuhua base, at the Frans Kaisiepo civil airport. This news immediately alarmed Canberra, with Australian Defense Minister Richard Marles seeking clarification from Jakarta and receiving a prompt denial from his Indonesian counterpart Sjafrie Sjamsoeddin. Despite the official denial, the incident revealed Moscow’s strategic interest in the island of Biak, located just 1,300 km from Darwin in Australia (where the United States maintains a military presence) and 1,900 km from the US territory of Guam. Already in 2006 Russia had proposed to establish a commercial structure for the launch of satellites on the island, and in 2017 two Tu-95 nuclear-capable strategic bombers of the Russian Air Force had stopped to refuel at the Manuhau base before carrying out an air patrol in the South Pacific.
At the same time, relations with China have become increasingly complex, oscillating between economic cooperation and maritime tensions. On 21 April 2025, Indonesia and China agreed to strengthen cooperation in areas such as disarmament, non-proliferation and arms control, during their first “2+2” dialogue between foreign and defence ministers. According to the Indonesian Foreign Ministry, the two sides also committed to improving coordination between the Indonesian Maritime Safety Agency and the Chinese Coast Guard. This diplomatic rapprochement comes despite persistent tensions in the South China Sea, where Chinese claims overlap with Indonesia’s Exclusive Economic Zone around the Natuna Islands. The intensification of the US-China competition in the region prompted Beijing to seek to strengthen its position, with Foreign Minister Wang Yi saying China and Indonesia should oppose “any form” of unilateralism and trade protectionism, in a clear reference to Trump’s tariff policies. The economic dependency is significant: in 2024, Indonesia imported goods worth 72.7 billion dollars from China and exported products for 62.4 billion, mainly coal, palm oil and ferroalloys.
The relationship between Indonesia and China in the South China Sea deserves a more in-depth analysis. Indonesia is not formally among the six countries with claims conflicting with those of China, but Beijing’s southernmost territorial claim extends into the 370-kilometer Indonesian exclusive economic zone, particularly around the Natuna Islands. This overlap generates constant tensions: Indonesian patrols regularly remove or seize Chinese fishing vessels, while Beijing coast guard ships escort fishing boats, some of which are intercepted by Indonesian authorities. In response, Jakarta enhanced patrols and garrisons in the hundreds of islands under its control. The recent memorandum on maritime security signed among the coast guards represents an attempt to manage these tensions through official channels, in a crucial area where goods pass that are valued at about $5 trillion a year. The agreement also provides for joint counter-terrorism exercises by the end of the year, signaling a willingness to contain territorial disputes without compromising cooperation on uncontroversial security issues.
With Washington, the balance is even more delicate, especially after Trump’s announcement of 32% tariffs on Indonesian exports to the United States, later postponed to July. On 16 April, US Secretary of State Marco Rubio met Indonesia’s Foreign Minister Sugiono in Washington, D.C., where the two “discussed ways to deepen defense and security cooperation, including initiatives aimed at upholding freedom of navigation and overflight in the South China Sea in accordance with international law,” according to a statement from the US State Department. To mitigate the impact of the threatened tariffs, Indonesia is considering buying billions of dollars in US armaments. During a closed-door meeting on 8 April, Defense Minister Sjafrie Sjamsoeddin forwarded a directive by President Prabowo instructing officials to identify US armaments that could be imported or where their purchase could be accelerated. Among the options under scrutiny is the resumption of plans for the acquisition of 24 F-15EX fighters, a preliminary agreement overseen by Prabowo himself in 2023 when he was Minister of Defense, but which has not yet materialised into a contract. The potential order, estimated at more than $8 billion, comes amidst economic pressures where the urgency to reduce the blow to the Indonesian economy from US tariffs clashes with budgetary constraints and Prabowo’s push for cost savings across the government.
This triangulation between Moscow, Beijing and Washington reflects the pragmatism of Prabowo, whose “friends of all” strategy allows Indonesia to maintain a multi-alignment policy, engaging not only with China and Russia, but also with the Western powers. As he noted during the Shangri-La Dialogue in Singapore in 2022, “we have good cooperation with both powers… The United States has helped us many times, in our critical moments. China has also helped us. China has also defended us and China is now a very close partner of Indonesia.” Indonesia is trying to use this middle position to increase its geopolitical influence, as evidenced by its recent accession to BRICS and its engagement in multiple regional forums. However, maintaining this balance requires continuous calibration, as any concession to one power can be interpreted as an imbalance by the others. The recent dialogue between Indonesia and China, for example, took place just five days after the Indonesian delegation’s visit to Washington, suggesting a balancing attempt. Similarly, the potential arms sale of the US could be offset by closer cooperation with Turkey in the defence sector, as highlighted by the February 2025 agreement for the joint production of unmanned aerial vehicles (UAVs).
IV. THE MILITARY IN THE PRABOWO ERA
The rise of Prabowo, a former special forces general and the son-in-law of former dictator Suharto, has accelerated a silent but profound expansion of the military’s role in Indonesian civilian life. On 20 March 2025, the parliament passed a review of the military law that allows active-duty officers to hold positions in 14 ministries and government agencies without having to withdraw from military service – reversing a post-authoritarian rule in force since 2004. The amendments to the law, unanimously approved with little public debate, allow active military personnel to operate in areas such as the office of the attorney general, cyber security, disaster management and narcotics control. The first drafts of the amendment even proposed to give the president the discretionary power to install military personnel in any government position, an addition later set aside. The Prabowo government has repeatedly denied that the amendment indicates a return to “dwifungsi” – the Suharto-era doctrine that assigned the army a dual role in defense and politics. But the expansion of the military’s role goes beyond this legislation: Prabowo has instructed the armed forces to provide logistical support for its free meal program for 82 million schoolchildren and pregnant mothers, and announced plans for 100 “territorial development battalions” that will help local communities achieve food self-sufficiency, a top priority of his administration.
This growing militarisation of civilian life is part of a broader doctrine of “military operations other than war” (MOOTW), a concept that is gaining ground not only in Indonesia but in different parts of the world. Originally developed in the United States in the early 1990s as a doctrine of limited military interventions, MOOTW underwent a conceptual evolution that expanded its reach to include virtually any operation not involving a conventional war, from peacekeeping operations to disaster management, from civil support to the fight against terrorism. In Indonesia, this doctrine has been used to maintain the army’s territorial command system – established under the authoritarian Suharto regime – which allows the military to project influence at every administrative level. The official justification for the expansion of the military’s role relies on the image of professionalism and competence of the armed forces over civilian institutions often perceived as corrupt or inefficient. However, this process risks leading to a de facto substitution of the democratic government, as activists and observers warn.
V. THE REGIONAL BALANCE: ASEAN, AUSTRALIA AND BEYOND
On the complex geopolitical chessboard of Southeast Asia, Indonesia seeks to convert its geographical and demographic centrality into diplomatic influence, using ASEAN as a multilateral platform to balance the pressures of the great powers. As a founding member and the association’s most populous country, Indonesia has a unique capacity to shape the regional agenda, promoting initiatives that foster economic integration and collective security. However, the effectiveness of this strategy is limited by the internal divisions of ASEAN, where some members prioritise economic ties with China over territorial concerns, creating an inconsistency that hinders Indonesian efforts to promote regional unity as a strategic counterweight to Beijing’s unilateral actions. The “2+2” dialogue with China in April 2025, focused on strengthening maritime cooperation, highlights Indonesian’s attempt to bilaterally manage tensions in the South China Sea.
Relations with Australia are a particularly delicate test for the Indonesian balancing strategy. In August 2024, the two countries signed a defense cooperation agreement called “historical”, but Australian membership in AUKUS – the trilateral defence partnership with the UK and the US in the Asia-Pacific region – complicates the bilateral relationship. As Ian Wilson of Murdoch University in Perth pointed out, while Indonesia pursues a “free and active” foreign policy that allows it to collaborate with all international actors, Australia is effectively “operating as a front line for the US in the region.” This strategic misalignment could prove problematic for Canberra, who has “restricted its alliances by binding itself exclusively to the United States” just as Indonesia maintains a more flexible posture. Prabowo’s visit to Russia and China before going to the United States underlined this difference in approach, sending the message that “Indonesia considers everyone as a partner,” a contrast to Australia’s growing integration into the US security system. Developments related to the Biak air base, just 1,400 km from Darwin, further highlighted the potential tensions, with Australian Prime Minister Anthony Albanese, who immediately said: “Obviously we don’t want to see any Russian influence in our region.”
To diversify its strategic options, Indonesia is building partnerships with “median” powers that can offer military technology and economic cooperation without the heavy geopolitical footprint of the US or China. The February 2025 agreement with Turkey for the joint production of unmanned aerial vehicles (UAVs) represents a significant step in this direction. The partnership between the Turkish company Baykar and the Indonesian state defense holding company Republikorp will facilitate the joint production of military drones in Indonesia, strengthening the country’s maritime security capabilities without relying solely on Western or Chinese suppliers. This diversification also extends to military purchases from South Korea, France and India, highlighting Indonesia’s willingness to avoid excessive reliance on a single supplier. This diversification strategy reflects a pragmatic view of regional security, in which Indonesia seeks to build a mosaic of tactical alliances to preserve its autonomy in a context of increasing geopolitical polarisation.
Sources used :
East Asia Forum, South China Morning Post, Bloomberg, The Diplomat, Financial Times, Global Voices, Al Jazeera, Reuters, Eurasia Review, Asia Times, The Straits Times, The Guardian, Fulcrum, Janes
Andrea Ferrario is an Italian international politics blogger with a focus on East Asia. He has collaborated with the weekly magazine Internazionale and is co-editor of the website Crisi Globale.
The Italian original of this article was first published on the author’s Substack. This English translation, by Daniel Mang, was first published on the Left Renewal Blog.