On 20 October 2014, a new President took office in Indonesia. Joko Widodo, popularly known as Jokowi, is the second directly elected president after Susilo Bambang Yudhoyono (popularly known as SBY), who had won two direct presidential elections (2004 and 2009). Jokowi’s win after an unexpectedly close contest (although he eventually won by a margin of 6.3 percentage points or over 8 million votes) with Suharto-era General Probowo Subianto – who had declared democracy to be incompatible with Indonesian culture – has removed palpable fears that the country’s hard earned democracy might backslide. The fact that Jokowi, a person of no wealth or privilege and a rank outsider to the political establishment (he was a former furniture businessman from Solo who became the mayor of that city and then the governor of Jakarta in2012), could become the president of Indonesia is a triumph for Indonesian democracy. But Jokowi’s victory also comes at a time of growing challenges to Indonesia’s foreign policy and international role at a time the country had received widespread recognition as an emerging power.

A Nation on the Move

Indonesia is the fourth most populous in the world after China, India and the United States. It is also world’s largest Muslim majority country and the third largest democracy. Its economy is 16th largest in the global scale (it came 10th according to a new rankingby the International Comparison Program) and the McKinsey Consulting firm predicts that it will become the 7th largest by 2030. Since the fall of the dictatorship of Suharto in 1998, Indonesia has held three direct presidential elections that are free and fair. During the 2000-2010 period, its economic growth surpassed all the emerging economies except that of China and India and was ahead of the other BRICS nations (Russia, Brazil, and South Arica).

Under SBY, Indonesia had not only consolidated its democracy, but also enjoyed an average annual growth rate of 5.9 per cent from 2009 to 2013, tripled the average per capita income of its people from US $ 1,161 to US $ 3,475, and reduced its poverty rate from 16 percent to 11.25 per cent. In foreign policy, it revived and strengthened its leadership role in the Association of Southeast Asian Nations (ASEAN) and earned global recognition as an emerging power through its engagement with the G-20 club. What lies ahead for the country under President Jokowi?

Indonesia’s foreign policy and international role since the fall of Suharto, but especially during the past ten years of SBY administration has several aspects that deserves notice from anyone interested in the role of emerging powers in world politics. First, while the rise of other emerging powers including the BRICS, have had to do, first and foremost, with economic growth and military spending, Indonesia is neither the wealthiest nor the most militarily powerful country of Southeast Asia, not to mention th Asia-Pacific region. Despite recent increases in its military budget (which has tripled from US $ 2.12 billion in 2003 to US $ 7.74 billion in 2012)and weapon acquisitions including surface ships, submarines and advanced combat aircraft (including F-16s from the US), it will take decades before Indonesia develops a true “brown water navy” and that can be counted alongside the navy of its neighbor Singapore. And it is not likely ever to match the bigger powers of Asia Pacific such as India, Australia, Japan and China. Instead, Indonesia’s status as an emerging power came on the back of democratization and robust regional engagement. It has depended on the country’s ability to develop a positive, virtuous correlation among three factors: democracy, development and stability, while pursuing a foreign policy of restraint towards neighbours and active engagement with the world at large.

Second and closely related to the above, Indonesia challenges the view among academics and analysts that newly democratic states are likely to suffer from greater internal strife, turn rabidly nationalistic and seek war with their neighbours. Democratization has been a key factor behind Indonesia’s ability to resolve the long-standing conflicts in East Timor and Aceh. And subsequent measures of decentralization have helped to foster greater national stability. And Indonesia under democratic transition has not only revived but strengthened its role as a leader of ASEAN and a key actor in building a new Asia Pacific security architecture.

Third, Indonesia also challenges the view that democracy is somehow inimical to development. With a growth rate above those of the other BRICS save China and India and projected to be among the top ten economies in the world, Indonesia demolishes that view which was popularized by the economic successes of South Korea, Taiwan, and China under authoritarian rule.

An Emerging Democratic Power

Fourth, Indonesia offers a powerful example that the key to becoming a globally recognized and respected power lies in good regional relations. Its Foreign Minister Marty Natalegawa would describes Indonesia as a “regional power with global interests and concerns”. (Foreign Minister Marty Natalegawa, interview with the author, Jakarta, 20 January 2014) We can modify this description slightly to say that Indonesia pursues a “regionalist path to its global role”. According to Natalegawa, many rising powers suffer from a “regional trust deficit” with their neighbours. Indonesia is different. There is much truth to it. Relations between powers such as India, China, Japan, South Africa and Brazil with their neighbours are marked by considerable mistrust and conflict. Indonesia on the other hand is universally acknowledged as a regional “elder”, and enjoys far more cordial relations with all its neighbours. This underpins Indonesia’s ability to play the role of mediator and facilitator in regional diplomacy and conflict management, such as in providing a good offices role in the Thai-Cambodian border skirmish over the Preah Vihear temple area in 2011, and in mitigating ASEAN’s embarrassment in 2012 after the group’s pro-China Chair Cambodia blocked a joint communique of its foreign ministers that would have disapproved Chinese conduct in the South China Sea.

Fifth, globally Indonesia has been an active member of the G-20 group. Indonesia views the G20 as a major platform for its global role. The G-20 is a medium through which Indonesia can share its experiences and “success stories” in development. In G-20, Indonesia aims to represent not just ASEAN but the whole developing world, with particular emphasis on their needs. Indonesia successfully pushed hard for ASEAN to be invited to be an observer to the G20. Indonesia has also promoted development issues within the G20, with a strong priority on infrastructure development, and the reform of international financial institutions. Indonesia also seeks to inject a greater sense of equality in the grouping, mindful of the criticism of the G-20 that it serves as something of a selective financial cartel of nations which, despite comprising countries of both the North and the South, is still dominated inside by the North. Hence Indonesia’s goal would be to keep the G20 to be “a democratic forum in which all of its members have the opportunity of speaking on equal footing with any country” and to prevent it from being manipulated by “any dominating pressure or stringent attitude/ position from the G-20 member states.”

Finally, democratic Indonesia has been an active champion of human rights and democracy in ASEAN and beyond. It has developed closer ties with other democracies, especially US, Japan, Australia and India, but unlike other emerging powers, including democratic India and Brazil. Relations with Australia, often hostile during the Suharto era, improved significantly. Ties with the US have been normalized, with the lifting of sanctions imposed after the East Timor violence in 1999 blamed on Indonesian security forces. And the two countries have signed a strategic partnership agreement.

Indonesia under democratic rule took the lead in recognizing the importance of human rights and democracy in the ASEAN Charter, in the creation of the ASEAN Intergovernmental Commission on Human Rights, and in criticizing Burma’s junta for its lack of progress in political liberalization and latter supporting Burma’s transition to a more open and democratic political system. In December 2008, Indonesia launched the Bali Democracy Forum (BDF). Membership in the Forum is not restricted to democratic countries alone. Hence, the BDF has seen the participation of Burma, Brunei, and even China. Indonesia has made it clear that it will not impose its own model of democracy on others, but through the BDF, share the lessons of its democratization process and help with democratic institution building in others.

Challenges Ahead

As the Jokowi administration takes over, there are many challenges that can potentially derail the country’s recent achievements, including its democratic vitality, economic performance, domestic stability and international role. First, Indonesia’s external environment is becoming more complex and challenging. The early post-Cold War sense of optimism about regional order has dissipated and China’s recent assertiveness in the region has sparked anxieties in Asian capitals, including Jakarta. As noted, Indonesia now accepts that China’s nine-dash line in the South China Sea overlaps with Indonesia’s Natuna island chain, thereby setting the stage for a more confrontational relationship with China. While Indonesia continues to stress its role as a moderator and facilitator in the South China Sea conflict, a further deterioration of the Natuna situation will affect this role negatively.

These developments pose a powerful challenge to two key elements of Indonesia’s foreign policy under SBY, termed “a million friends and no enemies”, and “dynamic equilibrium”, respectively. The latter approach, which has been promoted especially by Foreign Minister Marty Natalegawa, not only rejects the hegemony of any single power in the region, be it the United States or China, it also departs from the conventional balance of power approach. The goal is not to create order through military build-up, alliances and arms races, but by keeping ASEAN in the middle, like the “conductor in an orchestra”. (Foreign Minister Marty Natalegawa, interview with the author, Jakarta, 5 July 2011)

One major example of this approach was Indonesia’s role in pushing hard to have India as well as Australia and New Zealand to join the East Asian Summit (EAS) when it was founded in 2005. Another example is Jakarta’s effort to conclude a Treaty of Amity and Cooperation (TAC) for the Indo-Pacific region. ASEAN’s Treaty of Amity and Cooperation was originally signed among ASEAN members in 1976 but extended after the end of the Cold War to outside powers such as China, Japan, India, Russia and US. Whereas TAC as its stands now builds great power relations through an “ASEAN plus” formula, (e.g. ASEAN-China, ASEAN- India, ASEAN-US, etc.) the Indo-Pacific TAC would be truly multilateral by “connecting the outer dots”, where big powers like China, Japan and US engage each other in addition to engaging AESAN. The push for this began with Indonesia’s promotion of the 12 principles adopted at the EAS in 2011 in Bali.

Another challenge to Indonesian’s position as a regional mediator comes from the US policy of rebalancing or ‘pivot’ in the Indo-Pacific. The Obama administration has been careful in not forcing its agenda on ASEAN and ASEAN-led regional forums where Indonesia plays a major role. Washington continues to adhere to the principle of “ASEAN centrality” in building an Asia-Pacific security architecture. But if relations between US and China deteriorate further, it will test Indonesia’s ability to influence that architecture. It will call into question the “million friends and zero enemies” policy, which its domestic critics, including some of Jokowi’s advisers regard as “only dreaming” (Sidarto Danusubroto, Speaker of the Indonesian MPR and Advisor to President-elect Jokowi, interview with the author, Jakarta, 18 March 2014)

Fourth, Indonesia’s role as an emerging power is affected by domestic politics and economics. As noted, Indonesia’s international reputation has rested on its ability to make progress on three fronts: democracy, development and stability. But none of the three can be taken for granted. During the last election, Prabowo’s surge showed that a message of nationalism and ‘strong’ government could appeal to a large segment of Indonesian people, even if it meant a downgrading of democracy. Indonesia’s growth has slowed to 5.3% in the first quarter of 2014. Some 28.3 million of Indonesian still live below the poverty line. Its economy needs more infrastructure, education and training and transition from resource dependence to manufacturing to avoid the middle income trap. Corruption remains a major problem, although there has recently been growing vigilance and prosecution of corrupt officials. There remain pockets of internal strife, in places such as West Papua, and the potential for outbreak of terrorism, especially with the number of Indonesian militants training and fighting with the ISIS in Syria and Iraq, remains high.

A fifth challenge is Indonesia’s style of international engagement. Its usual low key diplomacy, its refusal to speak loud and clear, and its tendency to take a balanced position on some especially contentious ones like humanitarian intervention, sometimes exasperates the international community, especially the Western nations. As one senior western diplomat who did not want to be identified told me, “To play a global leadership role, you sometimes need to take sides”.

Finally, there is the issue of presidential leadership. There are concerns within and outside Indonesia about how President Jokowi will handle foreign policy. Would Jokowi be as interested and involved in foreign policy, in pushing Indonesia’s profile around the world, as SBY did with his very active engagement in foreign policy? If not, then much depends on the team the President brings, including the Foreign Minister and the Ministry to run the conduct of foreign policy.

But Jokowi has already shown that he has a clear interest and priority in foreign policy issues. He has made it known that he intends to focus on maritime issues, by both advancing Indonesia’s naval modernization (already started under SBY) and playing the role of mediator in the South China Sea conflict. But much depends on Jakarta’s ability to secure a code of conduct on the South China Sea, which is by no means assured. Jokowi is likely to continue with Indonesia’s strong engagement with ASEAN, but some of his foreign policy advisors want Indonesia to look beyond ASEAN (a “post-ASEAN” foreign policy) and develop a more active strategic ad diplomatic role in the Indo-Pacific region. If this happens, it is likely to weaken ASEAN and the principle of ASEAN centrality in regional security.

Indonesia’s ability to avoid collapse and consolidate its democracy and economy after the fall of Suharto is all the more impressive at a time when the world has seen many failing nations, recurring economic crises, and growing radicalism and terrorism. But whereas there was too little expectation about Indonesia in 1998-99, there is now perhaps too much. Indonesia might or might not be able to live up to all such high expectations. But it seems reasonable to believe that as long as its democracy continues to flourish alongside development and stability. Indonesia’s new leadership has a strong foundation on which to build its foreign policy and international role that will continue to receive strong international recognition and support.

Amitav Acharya is Professor of International Relations and Chair of the ASEAN Studies Center at American University, Washington, D.C. and author of the just published book, Indonesia Matters: Asia’s Emerging, Democratic Power(World Scientific 2014).