Diplomatic ties between Israel and Indonesia have proven historically tumultuous, and formal diplomatic relations between the two nations remain essentially non-existent.
Historically, Indonesia’s unapologetic pro-Palestinian stance has left little room for any economic or political ties with Israel. Honoring this long-standing foreign policy regarding the conflict in the Middle East, Indonesian government officials continue to deny rumors of thawing relations between the two nations.
Although historically shunned by Muslim Asian nations, such as Malaysia and Indonesia, alongside Arab, Middle Eastern nations, countries across the region have recently woken up to the economic potential of ties with Israel. The 2020 Abraham Accords, signed by Israel and its Arab neighbors Bahrain, UAE, Morocco and even historically hostile Sudan, saw nations that never had formal relations with Israel shift their foreign policies towards a stance that is more conducive to the facilitation of diplomatic and economic trade with the Jewish state.
Turning its attention to Asia, the Israeli government has been actively trying to thaw relations with Muslim-majority nations such as Pakistan. Indonesia has also proven central to Israel’s quest for international affiliation in Asia.
Despite the Trump administration offering substantial economic incentives to join the accords when they were brokered two years ago, cooperation was refused. There are nevertheless substantial economic and political benefits for the largest Muslim country should they choose to follow in the footsteps of the Abraham Accords signatories and engage in diplomatic relations with Israel.
As the highest-performing Asia Pacific market so far in 2022, Indonesia’s economy is developing at a rapid rate. This is in spite of the economic hurdles endured globally by the pandemic. Despite this development, their economy’s current capacity for digital and technological transformation and development has been hindered by the predominance of traditional industries, rather than hi-tech and digital industries.
Hi-tech powerhouse
Widely considered a global tech powerhouse, Israel’s key sectors include hi-tech, cybersecurity and information & communication technology. The normalization of formal economic ties would trigger a tremendous influx of Israeli tech and expertise, enhancing Indonesia’s own technological capabilities in renewable energy, agriculture and irrigation, health and water; vital components of food and energy security.
Beyond the benefits of direct economic engagement, if Indonesia were to join their fellow Muslim nations in normalizing relations with Israel, the Southeast Asian country would likely be the recipient of billions of dollars in American incentives. This economic “normalization dividend” would contribute to the diversification of Indonesia’s current portfolio of foreign direct investments, further facilitating the nation’s ongoing economic development.
Abraham Accords offer more than economic benefit
The potential benefits of joining the Abraham Accords, however, go beyond economic growth. It would also position Indonesia as a key potential mediator in the Israeli-Palestinian conflict. This is a prospect Indonesia’s former vice president Jusuf Kalla praised as a key incentive for the government to open diplomatic ties with Israel.
Ultimately, engaging in economic and diplomatic relations with Israel serves to benefit the economy, while facilitating the mission of fostering a two-state solution; a key foreign policy goal of the government.
One of the fundamental obstacles preventing the normalization of diplomatic and economic ties with Israel has been the official stance on the Palestinian issue. This obstacle need not prevent the facilitation of trade and political engagement with Israel moving forward. Indonesia can take a leaf from the Abraham Accords book, which have made it clear that the normalization of ties with Israel and support for the Palestinian cause are not mutually exclusive.
Other historically pro-Palestinian Arab nations such as Bahrain and the UAE have now normalized ties with Israel, while maintaining support for a two-state solution. In fact, other Muslim nations such as Turkey have long combined fervent advocacy for a Palestinian state with bilateral trade with Israel.
As such, Indonesia’s government would not be required to retract its support of the Palestinian cause in lieu of initiating economic and diplomatic ties with Israel.
Rather, as noted by Indonesia’s former VP, direct political engagement could in fact place Indonesia in a more favorable position to broker peace. In face of the colossal economic opportunities that would accompany the establishment of bilateral ties, as well as the favorable diplomatic position which this could afford the government, there has never been a riper time to jump-start normalization between Indonesia and Israel.
The writer is a political analyst living in Jerusalem.