"Regional Security Perspectives and Structures"

Keynote Address by H.E. Mr. S. Wiryono Ambassador of the Republic of Indonesia to Australia
At the Conference on : "Internationalizing Communities : Australia, Asia and the World"
The University of Southern Queensland, 27 November 1996

Mr Chairman,
Distinguished Guests,
Ladies and Gentlemen,

I am greatly honoured and privileged to be able to join you in this important international conference and share with you some of Indonesia's long-held thoughts on security perspectives and structures within the Asia-Pacific region. At a time when the fourth informal APEC Economic Leaders Meeting has just been concluded in the Philippines with far-reaching impact on the future of every country in the region, the subject could not be more timely. I should therefore like to commend the University of Southern Queensland for hosting this Conference and to express my deepest appreciation to Professor Donald Hugh McMillen and the Organizing Committee for this Conference for kindly inviting me to deliver this keynote plenary address.

I do hope that I will be able to tell you enough of Indonesia's foreign policy perspectives to render you better disposed to understand and appreciate our endeavours to contribute to the shaping of the region's economic and security landscape. For although these endeavours proceed from a history and a culture that is uniquely Indonesian and therefore quite distinct from the Western history and tradition that you are more familiar with, in the final analysis, they spring from perceptions not altogether different from yours and from motivations and values not at all at variance with yours.

One perception that probably all of us can share is that the Asia-Pacific region is today the most economically dynamic region in the world if only for the fact that, as a whole, it is enjoying unprecedented prosperity. This is especially the case with the East Asian countries, including Indonesia, which have been enjoying tremendous rates of growth for almost three decades. So persistent was this growth that not even the economic shocks of the 1970s and the recession of the 1980s could significantly curb it. While the annual growth rate of the world GDP was only 1.3 percent from 1980 to 1990, the GDP of East Asia grew at an annual average of 6.3 percent. In 1995, while the world economy, just beginning to recover from a protracted recession, showed a GDP growth rate of 2.5 percent the East Asian economies averaged a stunning eight percent.

This year, partly because of a glut in the electronics export market, a slow-down is anticipated among the East Asian economies, except in the case of the Philippines which seems intent on catching up with the East Asian tigers. But growth is still pervasive in the area: for example, the six percent growth of Singapore, although a disappointment to its citizens, is something many other countries would like to have. Indonesia's GDP growth rate will go down from 8.07 percent to perhaps 7.4 percent - but that is still above the Government's target growth rate for the current five-year development period and we welcome it knowing that the alternative is an overheated economy.

Economists of various schools of thought are still debating on how the East Asian economies came to this remarkable achievement. It is now clear to most observers, however, that these countries did not follow a single model of development, but that each of them addressed its country-specific problems and opportunities in its own way. They share, however, a number of characteristics: they are all market economies that encourage the initiatives of their private sectors; their industrialization programmes are all export-oriented and they have judicious macro-economic policies. They are also all situated in a region that has known relative peace and stability for the past two decades.

To my mind, it is clear that the general prosperity of this region and the remarkable rates of growth achieved by the East Asian economies are fruits of the robust tree of peace. On the other hand, the tree of peace may be said to have sprung from the seed of prosperity. For there can be no durable peace when the social and economic aspirations of people are frustrated, and there can be no significant social and economic development in the midst of conflict and turmoil. Thus the general prosperity of the region and the economic dynamism of a large number of its economies are both the effect and the cause of a situation of relative peace and stability that pervades the region. That is why peace and stability are very central for our economic development.

And yet the region is not immune to tensions born of past conflicts and unresolved disputes. There has always been tension on the Korean peninsula and across the Taiwan strait. There are territorial disputes between Russia and Japan, and between Japan and China. In Southeast Asia, a number of overlapping sovereignty and jurisdictional claims in the South China Sea remain unresolved. However, it is indeed a great relief that the parties involved have expressed willingness to resolve their disputes on the basis of international law, particularly the 1982 UN Convention on the Law of the Sea. It is even more heartening to realize that the regional countries involved in disputes have shown admirable restraint, and that, perhaps with few exceptions, the countries of the region, as well as the powers whose activities and interests intersect within the region, are now endeavouring to maintain overall peace, security and stability. The United States, a major stabilizing force in the region, did not pull out when the pundits speculated that it would, but remained politically and security wise as well as economically engaged with the Asian-Pacific countries. This was clearly stated by President Clinton when he spoke before the Australian Parliament on 20 November 1996 whereby he said that, "...the United States will remain a Pacific power and will continue to be involved and be influential so as to provide the stability among nations which is necessary for the people of the Asia-Pacific region to make the routines of normal life a reality and to spur the economic progress that will benefit all of us." Developed countries like Australia, New Zealand, Japan and Canada have taken extraordinary initiatives in order to get closely engaged with the developing countries of the region. Among the countries that have given the keenest response to such initiatives have been the ASEAN countries. Such responsiveness can be attributed to the faithful adherence of the ASEAN countries to a policy of cooperation in the spirit of true and equitable partnership.

This salutary situation is relatively new in a region which has a long history of chronic instability, strife and warfare - for it is an area of great strategic value because of its vital sea-lanes and the convergence within it of the presence and interests of the major powers. Considering this, the founding fathers of ASEAN more than two decades ago took stock of what would be the most plausible threats to their individual national security as well as the security of the region as a whole. And in their perception, such threats are bound to be much more subtle than invasion forces landing at beaches or armies marching across borders. They are more likely to be in the form of internal subversion which could be abetted from outside through infiltration or destabilization, or they could be in the form of proxy wars as a result of manipulation by external powers.

To head off these possibilities, ASEAN has conceived and over the years refined two basic approaches to peace and security. The first approach is based on a comprehensive idea of security which embraces not only the military dimension but also the political, economic and social aspects of security. We in ASEAN are convinced that the best way to ensure security is to develop, separately as individual nations and jointly as a regional organization, the political, economic and socio-political strengths which, apart from a military capability, make up a nation's true capability to cope with any internal or external security threat. This is the concept of national and regional resilience which has guided much of the work of ASEAN. Because Indonesia has a great deal to do with its formulation, this concept is entirely consistent with Indonesia's long-standing defense policy, which has never been an exclusively military affair.

We in Indonesia realized early on that unless we spent most of the national budget on defense and sacrificed all our national development programmes, the size and armaments of the Armed Forces of the Republic of Indonesia (ABRI) would never suffice to defend the country against a determined invader with abundant resources. Indonesian defense policy is therefore based on the concept of Wawasan Nusantara which may be roughly translated as the "Archipelagic Concept." Under this concept, every Indonesian is enjoined to help build, maintain and consolidate the national territory, much of which is marine, as one political, economic and socio-cultural defense and security system. The military is just one part of that system. That is why Indonesia's armed forces are organized and deployed on a territorial basis. And that is why Indonesian military spending is among the lowest in the world.

Since the concept of resilience is largely an internally directed approach, logically it should be complemented by an externally directed approach, one that is projected for application in the entire Asia-Pacific region. This is the concept of a Zone of Peace, Freedom and Neutrality (ZOPFAN) in Southeast Asia. We in ASEAN like to describe it as the blueprint of a code of conduct governing relations among the states within the zone as well as those outside it. It envisions the states in the zone as well as the outside powers committing themselves to a set of restraints necessary to ensure peace and forestall armed conflict. When all concerned have committed themselves to these restraints, it would be entirely unnecessary for the major powers to resort to military intervention and the regional states would have no cause to ever again invite or provoke major power intervention in their bilateral problems. Will such a regime work? We are confident that it will work if the Southeast Asian countries are able to develop the political will and the mechanisms for the peaceful resolution of their disputes - such as the overlapping claims in the South China Sea. For their part, the major powers will have to reassess their role and interests in the region and adjust their security doctrines and postures accordingly.

Unfortunately, ZOPFAN has not yet become a reality, its development having been retarded by the protracted Cambodian conflict which was resolved only in recent years. But some of its elements have already been incorporated in the 1976 Treaty of Amity and Cooperation (TAC) to which all ten Southeast Asian Countries and Papua New Guinea have subscribed. Non-Southeast Asian powers that wish to associate themselves with the principles and purposes of the TAC will soon be able to do so as the Treaty is opened for accession.

All ten Southeast Asian nations considerably advanced the cause of disarmament and peace when they signed in Bangkok last year the Treaty on the establishment of a Southeast Asian Nuclear Weapon-Free Zone (SEANWFZ). ASEAN senior officials are now working feverishly so that the Treaty can enter into force within the year. Of course, the Treaty would become a much more effective instrument of peace if the nuclear powers endorsed it by acceding to its protocol. As it is now, however, it has already helped make the region appreciably safer from nuclear war.

Earlier, in 1994, ASEAN launched a major exercise in preventive diplomacy: the ASEAN Regional Forum (ARF). The purpose of the ARF is to ensure that, as our Foreign Minister Ali Alatas has put it, "through dialogue and consultation, strategic change in the region could be managed in such a way that a stable relationship among the major powers as well as the regional powers can evolve peacefully over the next decade." Besides the ASEAN countries, ARF participants comprise ASEAN's Dialogue Partner Countries - which include Australia, Consultative Partner Countries and Observer countries. Together they constitute all the major powers as well as the regional states whose activities and interests have an impact on the security of the region. Today the ARF is undertaking a wide range of confidence-building measures that will make the security doctrines and postures of the countries involved much more transparent. Indeed the ARF process does not only prevent disastrous military miscalculations but it also positively builds goodwill and trust among the participating states.

It took the greater part of two decades for ASEAN to evolve into the vehicle for security consultations and political cooperation that it is today. During the early years of ASEAN, while its members were going through a long and painstaking process of mutual adjustment of outlook and policies, it was also developing as a regional association for economic, social and cultural cooperation. These remain principal spheres of ASEAN activity even today. As the organization gained in confidence, intra-ASEAN economic cooperation began to be complemented with economic cooperation with other countries, among the foremost of which is Australia, and other regional groupings. One of ASEAN's major contributions toward the achievement of free trade in the region is its current determined endeavours to establish the ASEAN Free Trade Area (AFTA) by the year 2003.

Since long before ASEAN undertook the pursuit of AFTA, we have always been very much aware of the growing interdependence and globalization of the world economy. Toward the end of the previous decade, ASEAN as an outward-looking regional Association was keenly seeking new and more effective modalities for wider and more intensive cooperation with the economies of the Asia-Pacific region. Fortunately, for ASEAN and the rest of the region, Australia in 1989 was taking the initiative in organizing a consultative forum that would be called Asia Pacific Economic Cooperation (APEC). As far as Indonesia and the other ASEAN countries at that time were concerned, the timing was perfect and they at once indicated their readiness to participate in the forum.

Since then, APEC has grown rapidly, to include 18 of the most dynamic economies in the region - a variegated group composed of developed, newly industrializing and developing economies. The APEC process has gone beyond consultation to vigorous policy coordination and concerted action. In 1993, the first APEC Economic Leaders Meeting (AELM) in Seattle enunciated a vision of an Asia-Pacific economic community based on a recognition of the growing interdependence within the economically diverse Asia-Pacific. At the second AELM in Bogor, Indonesia, APEC adopted a time-frame within which the goal of free and open trade and investment would be completed in the Asia-Pacific: no later than the year 2020 in the case of the developing economies and the year 2010 in the case of the developed ones. At the Third AELM in Osaka last year, these objectives were further fleshed out with a concrete plan of action. Two days ago in the Philippines, the fourth AELM unveiled the Manila Action Plan for APEC (MAPA) which constitutes the first measures towards the objective of free trade, as spelt out in Bogor and further elaborated upon in Osaka. Each of the 18 APEC economies will start its own program of liberalisation effective January 1997, so that individual members and APEC as a whole will break down barriers to trade and investment flows, facilitate business and reduce business costs in the region. Indeed, APEC is moving from vision to action.

Considering all these, the ASEAN countries may be regarded as being engaged in two vital processes covering the Asia-Pacific region. It is no coincidence, by the way, that Australia is also very much involved in these processes. In the political and security fields, ASEAN serves as the driving force of the ASEAN Regional Forum (ARF). In the economic field, ASEAN countries, except for Vietnam which became an ASEAN member only last year, are deeply involved in the APEC process. Vietnam expects to become a member of APEC in the near future, and there is no reason why all ten Southeast Asian countries, when they are already within the fold of ASEAN, should not also be members of APEC eventually. The ARF and APEC, together with other processes and arrangements in which ASEAN is involved, such as the SEANWFZ, the AFTA and the Treaty of Amity and Cooperation, support and complement each other and form a vital security web in this part of the world.

In the light of the involvement and contributions of ASEAN to global stability and economic development, it has been cited in global forums as one of the most successful sub-regional organizations in the world today. It has been particularly acknowledged as an exemplar of all organization at the regional level complementing the work of the United Nations at the global level for the achievement of peace, social justice and equitably shared prosperity. The experience of ASEAN clearly proves that there are tremendous possibilities that can result when a country works closely with its neighbours. Indonesia and the other ASEAN countries have succeeded in tapping this positive force.

Adhering to the ASEAN strategy of resilience, and vigorously pursuing export-oriented industrialization, Indonesia has been rewarded with an average annual growth rate of seven percent from the late 1960s until today. This export-driven economic growth has created some 44.4 million new jobs between 1971 and 1994. When Indonesia launched its First 25-year Long-Term Development Plan in 1968, some 60 percent of Indonesia's population was classified as living below the poverty line; today, the incidence of poverty in Indonesia is down to 13.5 percent. With a GDP of over US $207.5 billion and a per capita income of about US $1,000, Indonesia is the biggest economy in Southeast Asia. In 1995, Indonesia's GDP grew by 8.07 percent, surpassing the government forecast of 7.5 percent and the previous year's 7.4 percent.

With sound macro-economic management and prudent fiscal and monetary policies, Indonesia has maintained a balanced budget and kept inflation rates at a single digit. During the past decade, Indonesia was able to diversify the economy away from oil. Manufactures and non-oil/gas exports now account for 70 percent of the country's income. This was exactly the reverse in the 1970s when oil and gas made up between 70 and 80 percent of our exports. We are now much more reliant on the non-oil/gas sector, in particular the manufacturing sector. Since 1971, international capital movement has been unrestricted in Indonesia. Since 13 years ago, Indonesia has been opening up its economy through a series of deregulation and debureaucratization packages that have greatly liberalized its trade and banking policies and further opened up its economy to foreign investors. And in 1994, Indonesia launched its Second 25-year Long Term Development Plan which is projected to achieve an average annual growth rate of seven percent and place Indonesia firmly in the ranks of newly industrializing nations.

Still, we remain saddled with problems that are normally found in a developing country: some 27 million Indonesians still live below the poverty line and we must create employment opportunities for 2.3 million job-seekers each year. We must harness our national resources for productivity and economic growth and at the same time conserve them so that future generations of Indonesians will still be able to tap them. We have a sizable external debt to manage and our economy has a tendency to heat up and so we must always be vigilant for signs of overheating and its attendant inflation. We have to balance the distribution of our economic development by ensuring that the eastern part of our archipelago can catch up with the rate of growth of the rest of the country. And for the goals of our Second Long Term Development Plan to be attainable, we must be able to raise some US $300 billion in new investments, of which 77 percent or US $230 billion will have to come from the private sector. Needless to say, all these are easier said than done.

We are confident, however, that we will be able to reach our development goals -- given a situation of continuing peace in the Asia-Pacific region, of national stability which we are assiduously endeavouring to maintain, and of an improved external environment as a result of our common advocacy with like-minded countries for a more open and just international economic order.

One such like-minded country is Australia, which is also very much involved in many of the arrangements and processes that Indonesia is engaged in, notably the ARF, APEC and the ASEAN Dialogue process. The broadly gauged relations between our two countries are therefore generally excellent. I am sure there has never been a time when any number of Indonesians ever considered any of their neighbours to the south as a source or occasion of danger to security. On the other hand, it sometimes saddens me that there are still a large number of Australians who look upon their neighbour immediately to the north with misgivings and apprehension because somehow they consider Indonesia an occasion of danger to their security. In a survey of federal election candidates in May 1996, it was found that Coalition respondents are surprisingly fearful of security threats from Asia. More than 76 percent of Coalition respondents believed Indonesia "likely to pose a threat to Australia's security". This is compared to 36 percent of Labour respondents - a high proportion, given the Keating government negotiated a security treaty with Indonesia. I am not going to say that these misgivings are justified, although it is true that Indonesia, in its earlier stages of nationhood, was in a state of turmoil and on the brink of chaos. However, that was the period in which we experienced an outburst of nationalism, which now, is well behind us. Over the past two-and-a-half decades, Indonesia has followed a philosophy of development which we like to call the Trilogy of Development. This philosophy stresses Stability as much as Economic Growth and Equitable Distribution of the fruits of development. It was precisely Indonesia's determination to recover from turmoil and to build strong and healthy relationships with other countries that impelled it to work patiently and painstakingly with other Southeast Asian countries to build that regional forum for dialogue and reconciliation that is ASEAN today.

The Security Agreement of 1995 between Australia and Indonesia, hopefully, will erase much of the suspicion that some Australians still hold about Indonesia and bring the relations between our two peoples to a new level of trust. To my mind, this Security Agreement is of vital strategic importance. Right now the Agreement is primarily meant to be a confidence-building measure and I fervently hope that it will succeed as such so that all Australians will begin to look at Indonesia in a new light - as a bridge to the rest of Asia in Australia's bid to integrate itself economically with Asia and to gain access to the vast Asian market. In this respect, it was indeed most encouraging that at last months Australia-Indonesia Ministerial Forum, the two countries agreed to prepare for the launching of the Australia-Indonesia Development Area (AIDA), which will focus on intensifying economic links between Australia and Eastern Indonesia. There are mutual benefits to be gained by expanding and further deepening the level of economic cooperation between the two countries, and where contributing factors of geographic proximity and economic complementarities exist, activities at a sub-regional level could be effective in helping to enhance the level of economic development.

In this regard, it is heartening to note that relations between our two countries, including in the fields of tourism and education, are burgeoning. Today, a growing number of Indonesians speak English with an Australian accent, and a good number of Australian educational institutions are now offering courses in Bahasa Indonesia. I do believe that the day is not far when the destiny of Indonesia will be guided by a generation of leaders, many of whom are graduates of Australian colleges and universities. Trade and investment relations between our two countries are also on a surge: last year, Australian companies invested US $3.8 billion in 38 projects in Indonesia, catapulting Australia to ninth place among 51 investing foreign countries. Also last year, 62 percent of Australian exports went to Asian markets, up from 50 percent just a decade before. The value of Australian-Indonesian trade has risen to US $3 billion, with Indonesia sustaining a deficit of about US $l billion. We hope that the trade relationship will be much better balanced in the near future.

For we do think that Australian-Indonesian relations should reflect what we envisage to be the larger picture of regional security and economic cooperation. And what we should like the regional order to become is also essentially our vision of a new international order. One in which nations are too busy building bridges of goodwill and cooperation among themselves to be seduced by the gains promised by aggression. The guns would then be silent forever.