Indonesia Pushes for ‘Significant Power’ Status, but Can It Meet the Price?

Commentary

Indonesia, with the biggest coastline on the Indian Ocean and control of the key Indo-Pacific straits, is starting to assert its geopolitical strength, with hopes of becoming a major strategic power. But despite having a population of 288 million and being the biggest-population Muslim-dominated state, it is facing real economic challenges.

The trend under a new president is getting the attention of the regional players: the People’s Republic of China, India, Japan, South Korea, and Australia, as well as the United States.

The Indonesian Navy (TNI-AL) on Sept. 24 formally accepted its new aircraft carrier, the former Italian Navy’s ITS Giuseppe Garibaldi, into service in its TNI-AL paint job, at Tanjung Priok Port, North Jakarta, Indonesia.

The ship, now the KRI Sriwijaya, has been called a foolhardy acquisition, but it may have been extremely prudent and an indicator of Indonesia’s long-term strategic planning.

What may be of concern, however, is the rapid modernization of the Indonesian Armed Forces (TNI) under President Prabowo Subianto, since he took office almost two years ago, on Oct. 24, 2024. The concern, at least domestically, is about Indonesia’s budget deficit, which has ballooned dramatically since he took office and began ordering a sweeping modernization of TNI capabilities.

From an external viewpoint, that may not be the only area of interest. Is Indonesia’s strategic trend under Prabowo—a former general—more about creating a position that potentially checks or manages Australia’s ability to move against the People’s Republic of China (PRC) in the South China Sea and the Pacific? Or is it about building for a long contest with India for strategic positioning in the Indian Ocean and the SLOC (sea lanes of communication) links between the Indian and Pacific oceans?

The same month that saw the delivery of the KRI Sriwijaya also saw the visit by Indonesia’s navy chief to Pakistan. On Sept. 14, Pakistan President Asif Ali Zardari, in Islamabad, bestowed the Nisham-e-Imtiaz (Order of Excellence) on Indonesian Navy chief of staff Adm. Muhammad Ali for the admiral’s “outstanding contributions to strengthening military cooperation between Indonesia and Pakistan.” The Indonesian Navy spokesman said the historic ties between the two states have endured since the era of President Soekarno, Indonesia’s first president.

Indonesia and Pakistan have been strengthening defense links. particularly since January, when Indonesian Defense Minister Sjafrie Sjamsoeddin began talks with Pakistani Minister for Defense Production, Muhammad Raza Hayat Harraj. Talks on standardization of training and cooperation in fleet exercises followed, along with further senior-level naval exchange visits.

Significantly, and particularly during the presidency of Prabowo’s predecessor, President Joko Widodo, India had successfully engaged Indonesia with military diplomacy, largely geared around managing the seaways between the two countries, such as the Andaman Sea. At that stage, there was no suggestion that Indonesia could revive its aspirations for regional strategic dominance, as had been originally sought by Soekarno post-World War II.

To the point that the Indonesian forces have been growing too rapidly—or at least too rapidly to be afforded—the acquisition of the former ITS Giuseppe Garibaldi was undertaken for a token 1 euro payment, but is being upgraded by local Indonesian companies (particularly PT PAL) and Italian defense company Fincantieri. It is a small ship, at 13,850 tonnes, but it still maintained an Italian Navy squadron of BAE Harrier V/STOL combat aircraft. The aircraft were not transferred with the ship, and it is scheduled during peacetime to operate in humanitarian, search and rescue, and helicopter/drone missions.

It will provide the TNI-AL with further maritime air experience, although it already has numerous amphibious assault ships and landing ships with helicopter capability and of comparable size, or even slightly larger size, than the KRI Sriwijaya. There is no doubt that the TNI-AL is treating its new ship as a different genre than its helicopter-capable assault ships and that this could be the forerunner of TNI-AL naval air operations on a larger scale. Not insignificantly, the Indian Navy itself began carrier operations with smaller, foreign-built light carriers and Harrier and other fixed-wing aircraft.

Prabowo’s nemesis, then, is his budget deficit, which reached $15.1 billion, or 0.93 percent of gross domestic product, for the first eight months of 2026. Some of this was due to rising energy subsidy costs domestically, something that seemed unlikely to be assuaged in the near term.

Prabowo has a history of concern about neighboring Australia’s military dominance in the region for the past decades, literally since the end of World War II. However, he has, since taking the presidency, maintained good links with Australia, and Australia, for its part, has not bothered Indonesia over the issue of Indonesian occupation of West Papua. Jakarta seized West Papua after the withdrawal of the Dutch, despite the fact that it was not geologically, geopolitically, or ethnically or culturally linked with the essentially Malay-ethnicity string of Indonesian archipelago islands.

The thesis that Indonesia could rise as an independent power—and a Muslim-dominated one—has been around since World War II, but it has gained recent traction because of Indonesia’s dealings with Pakistan and Turkey, in particular, in the defense supply chain. Much depends, too, on Indonesia’s economic dependency on investment from the People’s Republic of China (PRC), its largest trading partner.

Jakarta is attempting to rapidly diversify its trading partners so that a collapse of Chinese demand for Indonesian raw materials would not adversely affect Indonesian stability. The PRC is Indonesia’s largest trading partner, providing from 20 percent to 36 percent of Indonesian imports and taking a large proportion of Indonesia’s coal and palm oil exports.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.