In these days and weeks, the informal leader of ASEAN is striving to finalise a trade agreement with the United States. Why is this merely a formality, and what problems have already been created for the Indonesian economy?
Unequal Relations
A 19% tariff on Indonesian goods—this is the unsightly face of the American-Indonesian “Comprehensive Strategic Partnership” revealed by the Washington-Jakarta agreements. Although, in general, “agreements” is too polite a term for that. The situation resembled more the racketeering style of 1990s criminals. The military and economic power of the US and Indonesia cannot be juxtaposed, and D. Trump turned the pressure on his partner up to the maximum. The tactic that was used initially (having now become classic) is the following: to propose an astronomical tariff figure (in Indonesia’s case, it was 32%), forcing the partner to make concessions in order to graciously lower the barrier, but not by a large margin, and to cement the state of affairs. It goes without saying that such a dialogue between “strategic partners” looks more like “beating up a baby” and a manual on how to twist an independent country around one’s little finger without much effort?
The negotiations have resulted in the following: Indonesia increases imports from the US across all product groups, from soybeans to airliners; the pinnacle of racketeering mastery is that while remaining an oil and gas exporting country, Indonesia is forced to increase purchases of both oil and gas from the US. The “problem” of a trade balance, irking for D.Trump, due to being previously in Indonesia’s favour, is now being solved. Indonesian partners accept American standards and certification, uninterruptedly supply the US with “critical minerals,” and open up the economy to American investors as much as possible.
An “Airbag” in Reverse
The investors’ case requires a further, more detailed examination. The fact is that Jakarta is one of the recipients of the so-called American “development assistance.” In reality, this “assistance” is not assistance at all, but a veritable system of, firstly, loans whose volume increases as if it were a snowball, and secondly, meticulously calculated investments aimed at serving the needs of American transnational corporations and securing their privileged position in the country. Indonesia was hooked on the needle of loans from American and US-controlled international economic organisations (the World Bank and IMF) as far back as the 1970s. Largely “owing” to them, it has accumulated a substantial external debt. The “assistance” only comes across as salvation; meanwhile, for example, it was only in 2025 when Indonesia managed to repay its debts to the IMF from the loans taken by Jakarta during the Asian Financial Crisis. Repaying debts to the US and the World Bank is literally a vicious cycle because new loans have been added every single year for the past several years—hundreds upon hundreds of millions of dollars.
In international studies, loans and economic coercion are rightly classified as forms of hard power. The system built by America has led to its genuine parasitism on developing countries, as described in detail by John Perkins in his book “Confessions of an Economic Hitman” (which, incidentally, also mentions Indonesia). And if the lender and “investor” are mala fide actors, recognizing only force and regularly trampling international law and morality, then in this situation, it finds an almost unlimited resource for pressuring its partner and imposing its economic models, projects, solutions, and interference in internal affairs.
Cyber-Security American Style
Such “assistance” can be fraught with consequences. In the case of the US-Indonesia partnership, acts of strategically calculated “kindness” affect not only the economy but also the military sphere. How about this, for example: recently, in December, the US State Department “gifted” a large batch of information and communication equipment, including computers, to the Indonesian Armed Forces? Curious, isn’t it? It’s worth recalling that in our time, progress has reached the point where various viral and spyware programs and unauthorised external access can occur even through, I beg your pardon, irons and refrigerators. And what about military computers, secret data, and secure facilities?
Or take another sphere, a humanitarian one. Here, there is a real abundance of grants from the American side to Indonesian “activists” and non-governmental organisations for multifaceted goals like “tolerance,” “diversity,” “freedom of speech,” and “democratic governance.” This system has grown so much and already involves so many Indonesian residents that quantitatively, “participant upon participant, and participant drives participant.” How long in this situation can a country control the state of affairs, preserve its very identity, independence, self-awareness, and dignity?
Read Out the Whole List
Speaking of self-awareness and dignity. Perhaps, someone conceived of a “comprehensive strategic partnership” with the States as truly meaning, at least politically, exactly what its title implies? By no means. America behaves towards Indonesia as if towards a person who, seemingly beneath its level, is always guilty of something and for some reason must constantly endure reproaches and justify itself. The list of what to justify and what it is accused of is quite extensive. Of insufficient human rights observance. Of persistence of child labour. Weak fight against corruption. Unresolved human trafficking. Illegal wildlife trade. Shortcomings in anti-corruption legislation. Improper regulation of intellectual property issues. Insufficient organisation of the fight against terrorism. And of… Honestly, how much will suffice? Moreover, the US compiles not only accusations but also recommendations, traditionally articulated from a position of superiority, on what an independent country should do and how it should live.
That question is how long will the Indonesian state and society endure this. Is there a limit to the humiliation, which, frankly, is offensive to watch from the sidelines? Offensive for the proud “Asian tiger,” which periodically bows its beautiful head to America’s orders instead of seriously contemplating its own future. Yes, President Prabowo Subianto is trying to adhere to a multi-vector path, to build promising relations with the rest of the non-Western world, and he has managed to distance himself from direct American stoking of conflicts in the Asia-Pacific region (this is not the Philippines, willing to engage with anything). But within Indonesia’s political elite, there are different currents (including those clearly defending US interests). Whether the Indonesian state can tell then apart, cope with these challenges, and preserve its sovereignty will determine the survival of ASEAN’s main economy, and consequently, the fate of this organisation and the region as a whole. There is still time to contemplate.
Ksenia Muratshina, PhD in History, Senior Research Fellow at the Centre for Southeast Asia, Australia, and Oceania Studies, Institute of Oriental Studies of the Russian Academy of Sciences
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