Reports | 25 September 2018

Expanding Horizons: Indonesia's Regional Engagement in the Indo-Pacific Era

Lowy Institute Non-resident Fellow Matthew Busch contributed a chapter on the political economy of Indonesia’s natural resource wealth to this Perth US Asia Centre Report.

Lowy Institute Non-resident Fellow Matthew Busch contributed a chapter on the political economy of Indonesia’s natural resource wealth to this Perth US Asia Centre Report.

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Key Findings

  • Resources hold a special place in Indonesia’s national consciousness, and its citizens have seen them seize the attentions, and at times most covetous impulses, of multinationals, foreign powers, and their own political leaders. Matthew Busch explores contemporary phenomenon of resource nationalism, broadly defined as the strategies used by resource-endowed states to exert more control over their mineral and energy resources.
  • In Indonesia, resource nationalism also follows from a historical tradition under which the control of resources and the dispensation of patronage is central to the historical logic of power.
  • Resource nationalism is not solely a consequence of rent-seeking, but instead is also driven by other factors, such as ideas, economic institutions, and industry-level attributes. Resource nationalism should also be considered in the context of a central government that sometimes lacks capacity in delivering public goods and conducting its relations with subnational governments, and some instances of resource nationalism can also be directed at domestic interests or even fellow state actors.
  • These examples, sometimes justified through reference to developmental objectives, also demonstrate how in Indonesia the resource nationalist state also struggles to exercise control and meet its objectives.

Read the full report

This Perth USAsia Centre Special Report examines Indonesia’s role in the evolving Indo-Pacific regional order. Bringing together a mix of leading Australian and Indonesian authors, offers a state-of-the-art analysis of the opportunities and challenges facing Indonesia’s economic, security and diplomatic role in the Indo-Pacific. You can download the full report here.