Academic journal article Contemporary Southeast Asia

U.S.-Indonesian Relations during the Economic Crisis: Where Has Indonesia's Bargaining Power Gone?

Academic journal article Contemporary Southeast Asia

U.S.-Indonesian Relations during the Economic Crisis: Where Has Indonesia's Bargaining Power Gone?

Article excerpt

The U.S.--Indonesian diplomatic "bargaining setting" has changed dramatically since the end of the Cold War. The changes in the structure of global power explain why, during the Asian economic crisis, the United States was able to wield considerable influence in support of its political objectives vis-a-vis Indonesia. It will be argued in this article that the hegemonic structure of Cold War international relations protected Indonesia's authoritarian elite from the global pressure towards democracy, and that the end of the Cold War explains why Indonesia became very exposed to this pressure during the regional economic crisis. While recognizing some of the positive aspects in the loss of bargaining power of Indonesia's authoritarian elite, the article also sees problems related to it and offers suggestions on how democratic Indonesia might avoid external pressures.


After the meltdown of its economy and the rescue operation launched by the International Monetary Fund (IMF) in December 1997, Indonesia has frequently been referred to as the Republic of the IMF, or as a victim of U.S. colonialism. In order to get help for its desperate economy, Indonesia's leaders have had to compromise many of their values and interests to the demands of the country's creditors. In 1998, Indoensian President Soeharto had to step down partly as a consequences of external pressure: he resigned only hours after U.S. Secretary of State Madeleine Albright had urged him to perform a "historical act of statemanship for the democratization of Indonesia". In Soeharto's words, "[a] foreign power made me quit". [1] In 1999, Indonesia had to accept that East Timor would secede to United Nations (UN) control in preparation for full independence. East Timor was considered by Indonesia to be an integral part of its territory.

During the 1970s, only twenty years earlier, Indonesia had successfully negotiated an increase in its military aid from the United States by releasing some of its left-wing political prisoners, thus signalling to the leader of the anti-communist world that Jakarta's support could not be taken for granted. In the same manner, under Soekarno, an economically weakened Indonesia had bargained for political concessions from the United States and, accordingly, received U.S. aid. [2]

What is it that has made Indonesia and many other developing countries so vulnerable to external influence? Why did democracy gain ascendancy after failing for so many decades? Even if one does not accept the idea of a new colonialist period, it seems clear that the present period makes developing countries easier to penetrate than they were only two decades ago. Or even if one does not accept Francis Fukuyama's prediction of the final global victory of liberal democracy, one must accept that in recent years authoritarian regimes have found themselves increasingly isolated, externally and internally.

In this article, the ability of Western democracies to impose their ideals on developing countries is explained unconventionally. Instead of saying that this is merely a part of the process of globalization, it will be shown that, in the case of Indonesia, the phase of the cyclical hegemonic development played a major role in making Soeharto and Habibie yield to the democratizing pressure of the United States. In this alternative argument, states and political power -- and not merely new agents of globalized world politics, such as banks, non-governmental organizations (NGOs), and regional organizations -- still have a role to play in world politics. It will be argued that the collapse of the Cold War hegemonic order made it easier for the United States to devote itself to ideological objectives: it no longer needed to "waltz" with dictators to legitimize and manage its leading role. The collapse of the Cold War also meant the disappearance of the challenge to U.S. leadership. This disappearance made it impo ssible for Indonesia to use the "Soviet/PRC Card" of resorting to the hostile camp if the terms of co-operation with the West did not please, or was conducive to, it. …

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