JPRI Working Paper No. 57: May 1999
Can Japan Ever Take Leadership? The View from Indonesia

Typically, when people think of Japan's foreign policy and Japan's place in the Pacific region, they focus on its relations with the United States, China, Russia, and to a lesser extent the two Koreas. This is understandable since the primary issues affecting Japan's security are bound up in the complex of relationships among these countries. Far less attention is given to Japan's relations with Indonesia and the various countries of Southeast Asia, and what discussion there is often proceeds from the comfortable assumption that these countries are bound by so many economic ties to Japan that they are largely beholden to Tokyo's core preferences. I would like, instead, to explore Japan's relationship with Indonesia, as seen from the Indonesian end. I believe that commonly held ideas about Indonesia (and other Southeast Asian countries) being inescapably in Japan's orbit are seriously exaggerated.

Since the late 1960s, foreign affairs have been of only moderate political significance in Indonesia. For roughly the first two decades after Suharto took power, the overwhelming policy preoccupations were domestic in nature: internal security and economic development. In the wake of the political and economic chaos in Indonesia during the mid-1960s, Suharto and his key supporters in the military focused administrative resources and political energy on securing the position of the regime by suppressing opponents and co-opting others at the same time as they fostered rapid economic development.

Reinforcing this heavy domestic focus is the fact that country's external strategic environment is and has long been quite benign. As the most populous country in Southeast Asia by a very large margin, Indonesia is relaxed about the possibility of a serious security threat coming from within its immediate region. The rise of China is certainly a source of quiet but real concern to Jakarta. However, it does not exercise the attention of the country's political elite to nearly the same extent that it does in, say, Hanoi, Manila, Seoul, or Tokyo.

The key international priority during the early period of the Suharto regime was to nurture relations with Indonesia's creditors--particularly the United States and Japan--as part of the struggle to rehabilitate the country's economy. An important component of this endeavor was to rebuild relations with neighbors in Southeast Asia as a means to regain the trust of the major western powers. This was a primary initial motive behind Jakarta's sponsorship of the formation of the Association of Southeast Asian Nations (ASEAN).

From around the mid-1980s this picture began to change as Indonesia came to assume an increasingly outward-looking and active diplomatic posture. With ASEAN as its foundation, Jakarta became involved in increasingly ambitious foreign policy undertakings, taking leadership of the Non-Aligned Movement from 1992 to 1995 and, of more enduring significance, supporting the expansion of multilateral frameworks for regional economic and security cooperation through the Asia Pacific Economic Cooperation forum (APEC), the ASEAN Regional Forum, and the Asia-Europe summit meetings.

Lying behind this more active and self-assured foreign policy stance were important domestic and international changes. Domestically, both the personal position of Suharto as president and that of the regime in general had become much more secure politically. With the prospect of a credible challenge to its position increasingly remote, the government became more willing to devote attention to international issues. Also underpinning the emerging interest in multilateralism was the liberalization of the Indonesian economy from the mid-1980s onwards. As the country's economy opened up and became increasingly integrated into the wider regional economy, interests and problems shared with other Asian countries pointed to the growing utility of regional cooperation.

In this context, the collapse of Suharto's regime amidst the Asia-wide financial crisis of 1997-98 has inevitably had a major bearing on the country's foreign policy posture. Although the new Habibie government has remained nominally committed to the various multilateral frameworks for regional cooperation, in practice these have fallen sharply as priorities. Once again, severe internal economic and political problems have forced most foreign policy issues into the background. And, more concretely, the radical depreciation of the rupiah has meant that the dollar-cost (or other currency-cost) of maintaining established diplomatic missions as well as ad-hoc ventures has risen to punishing heights. As a result, Jakarta has been forced to curtail severely foreign ministry outlays (Jakarta Post, December 30, 1998). The principal exception to this has been the desperate need to nurture bilateral relations with Washington, and particularly Tokyo, to maximize the flow of financial relief during this period of acute economic distress. The other notable foreign policy endeavor fostered by the current crisis has been the government's declared willingness to allow East Timor to leave the republic if it does not wish to accept a government proposal for enhanced regional autonomy.

Japan and Indonesia

If these are the broad outlines of Indonesia's foreign policy posture over the past three decades, how has Japan fitted into Indonesian foreign policy calculations? How does Indonesia view Japan and Japan's role in the wider Pacific region? Inevitably, the starting point of any discussion of Japan's relationship with Indonesia--as with Japan's relationships with most other Asian countries--is recognition of the strength and depth of bilateral economic relations. Simply put, Japan looms very large in the Indonesian economy. Japan has long been Indonesia's most important trading partner, being (prior to the current economic crash) both its largest export market (principally, oil, gas, and timber) and its largest supplier of imports (principally manufactured goods). Similarly, Japan has also long been Indonesia's largest foreign direct investor. Indeed, if we look just at the manufacturing sector, Japan massively outstrips other countries as a source of foreign investment into Indonesia. If we include investment in the capital intensive resource-extractive industries, principally oil and gas, then the U.S. also emerges as a key source of foreign capital, although still somewhat smaller than Japan.

Japan has also dominated bank lending by the advanced industrial nations to Indonesia and long outstripped all other providers of official development assistance (ODA) to Indonesia. Table 1 summarizes the situation at the end of 1996, on the eve of the financial crisis.

If we look beyond the aggregate numbers to content, it is evident that for Indonesia, Japan represents a key source of capital and to some extent technology. For Japan, Indonesia represents an important emerging market in Southeast Asia, a key supplier of oil and gas, and a useful production platform for other markets in North America and Europe. Given the density of these economic ties and the asymmetries between the two countries, it is not surprising that much of the literature focusing on Japan and its position in the region tends to portray Indonesia and the rest of Southeast Asia as passive subjects in the tight and not altogether happy embrace of giant Japan. Reflecting on Japan's importance in terms of trade, investment, and aid, to Indonesia and other countries in the region, T.J. Pempel declares that "Such economic leverage over the entire national economy of so many of these countries clearly puts Japan in an exceptionally powerful position within the region" ("Transpacific Torii: Japan and the Emerging Asian Regionalism" in P. Katzenstein and T. Shiraishi, eds., Network Power: Japan and Asia, Cornell University Press, 1997, p. 71). He goes on to add that "Japan stands in a uniquely superior position to the rest of the countries of Asia." This may be the way things appear from Tokyo, or perhaps to outsiders focusing on Tokyo, but viewed from Jakarta, the relationship appears rather different.

Although Indonesia periodically worries about the possible dangers of excessive economic dependence on Japan, for the most part there has been remarkably little attention focused on the bilateral relationship. One does not encounter among Indonesian policymakers, military officers, businesspeople, intellectuals, or journalists a sense that Tokyo is constraining or influencing the policy choices of the Indonesian government, or indeed, that Tokyo is even pursuing an effective or meaningful regional leadership role. Certainly, it is well-understood that Tokyo seeks to support Japanese corporations in their pursuit of narrow commercial interests, but this stands apart from the wider question of whether Tokyo is pursuing a coherent and consequential broadly-based foreign policy.

Japan's economic presence in Indonesia has yielded much less policy leverage than one might expect. The United States, which has fewer economic ties to Indonesia and does very much less for Indonesia in terms of providing development assistance, nonetheless features much more prominently in Indonesian thinking. Indicative of this is that in the Indonesian scholarly literature on foreign policy, there is very little focused discussion of the significance of Japan to Indonesia. The most recent book-length study (L. Suryadinata, Indonesia's Foreign Policy Under Suharto: Aspiring to International Leadership, Singapore: Times Academic Press, 1996) devotes less than two and a half pages to Indonesia's relations with Japan. More broadly, the bilateral relationship simply has not commanded the wider policy attention that strong economic ties might lead the distant observer to expect.

Why is it that Japan does not command more attention in Indonesia, in the way, for instance, the United States does in Mexico? At the simplest level, one element is that the bilateral relationship between Japan and Indonesia is in fact surprisingly thin. There are remarkably few substantive areas of interaction between the two countries beyond commercial exchange and aid programs (unlike Mexico and the United States). Revealingly, when asked about this in a recent interview with Indonesian journalists, the Japanese ambassador could point only to government-sponsored cultural and friendship festivals, government-sponsored educational fellowships, and Japanese tourists holidaying in Bali as evidence of wider non-commercial connections between the two countries (Jakarta Post, December 3, 1998).

Despite the steady efforts of the Japanese government since the launching of the so-called Fukuda Doctrine in 1977 (when Japanese prime minister Takeo Fukuda visited Southeast Asia and declared Japan's determination to build 'heart-to-heart' relations, not just economic relations) the reality is that non-economic ties remain weak. Not only is there little substantive bilateral interaction on either political or security issues. Even on the sociocultural front, the interconnections are much less extensive than the economic linkages would suggest. For example, despite strong efforts by Tokyo to fund more Indonesians to study in Japan, the proportion of those Indonesians studying overseas who choose Japan has scarcely grown over the past decade. In both absolute and relative terms, the number of Indonesians going to Japan for education lags well behind not just the United States, but also Australia and Germany, and probably, Malaysia and the Philippines (See Table 2).

Thinness of bilateral ties is one factor, but deeper forces are also at work. Simply put, notwithstanding the economic importance of Japan to Indonesia and the economic asymmetries between the two, there is little sense that Japan causes Indonesia to adjust its policy settings to accommodate Tokyo's preferences to any significant extent. At the most elemental level, Jakarta does not worry about Japan as a security threat. Lingering sensitivities arising from World War II are now largely a thing of the past (unlike in China or Korea). It goes without saying that Indonesia would indeed worry if there were a re-emergence of strongly nationalistic politics in Japan and an expansionist foreign policy. But it is widely understood that such conditions have simply not existed in Japan since World War II and continue to appear quite improbable for the foreseeable future. From what we know of Indonesian defense planning, Japan does not appear in any of the significant threat scenarios.

Nor does Japan threaten or even inconvenience Indonesia diplomatically on political issues such as human rights. While Jakarta does have to worry about the United States and many other large and small western countries (and, more recently, China) periodically subjecting it to intense criticism on human rights and labor rights issues, Japan avoids such behavior. Thus, for example, when Prime Minister Hashimoto visited Jakarta in January 1997, he specifically assured president Suharto that not a single Japanese government official would even meet with Nobel peace laureate and East Timor activist, Jose Ramos Horta, who was then visiting Japan in a bid to pressure Jakarta (Jakarta Post, January 10, 1997).

Moreover, unlike other western governments and particularly the United States government, Tokyo very rarely takes punitive trade measures against Indonesia. It took an extraordinarily egregious breach of World Trade Organization rules by Jakarta--the awarding of exorbitant privileges to a car assembly joint-venture between a Suharto son and the Korean Kia group in 1996--to trigger serious policy counter-measures by Tokyo. Even then, despite MITI's protracted efforts to persuade the Indonesian government to reconsider its position and a declared preparedness to take the matter to the WTO, not only did Jakarta not accede, but in April 1997, Suharto bluntly rebuffed the entreaties and ordered the project accelerated (Japan Times Weekly, June 24-30, 1996). These were scarcely the actions of a government fearing significant bilateral sanctions.

There is also little sense in Jakarta that Tokyo is pursuing a grand strategic policy to try to reshape the region or project its own policy preferences on others. The attempt, in January 1997, to launch the so-called Hashimoto doctrine for regular Japan-ASEAN summits and separate but parallel bilateral dialogues on regional security matters was greeted politely but with what could only be described as lukewarm interest in Indonesia. Indeed, many members of the Indonesian foreign policy community believe that Jakarta demonstrated greater verve and leadership in handling the 1994 APEC summit in Bogor than Japan did the following year at Osaka. And they believe Japan's actions during the first twelve months of the regional financial crisis were equally timid and uninspiring.

Although Tokyo was prompt and generous with financial assistance, many in Indonesian policymaking circles doubted that Tokyo would play a truly effective role in dealing with the crisis. The frustration in Jakarta focused not so much on the fact that Japanese banks were the primary lenders of the short term funds that flooded into the country during the boom of the mid-1990s or on the fact that Japanese banks were the least willing (among foreign lenders) to renegotiate the structure of the debt once the financial collapse had taken place. Rather, Indonesians saw the unwillingness or inability of Tokyo to do anything other than throw aid money around.

Specifically, Tokyo was not only unwilling to accede to long-standing calls from Indonesia (and other Asian countries) to allow more exports into the Japanese market, it seemed incapable of rekindling solid growth in the Japanese economy--without which the task of rehabilitating the battered economies of Southeast Asia would be much more difficult. And Tokyo's hasty retreat in the face of U.S. and Chinese opposition to its proposal in September 1997 of a US$100 billion Asian Monetary Fund to tackle the region's financial problems only reinforced Jakarta's perception that Japan was incapable of providing effective regional leadership, even in a time of crisis. As Jusuf Wanandi, a leading Indonesian foreign policy commentator, put it: "There is a feeling of a real lacuna in Japan's leadership in this crisis, which after all is an economic one and is happening in East Asia and therefore should be of great concern to Japan. This suggests that Japan really has to prepare herself and to get her act together now in order to play a leadership role for the future development of the region." Or as one normally cautious member of the Indonesian foreign policy community pithily summed up the widespread exasperation with Japan: "[They're] helpless and hopeless!" (author interview September 8, 1998).

None of this implies that Tokyo itself is anything less than happy with the status quo. The whole logic of the post-World War II foreign policy framework put in place in the early 1950s by Shigeru Yoshida was that Japan would forgo traditional security and political foreign policy goals, and focus instead more narrowly on economic and social ties. A range of factors underpinned this: Japan's domestic political configuration; its limited resource endowments; the determination of the United States to guard against a militarily and politically independent Japan in the wake of World War II; and the systemic imperatives of the Cold War. Moreover, as David Arase has persuasively argued, Japan's ODA has been deliberately and effectively harnessed for the purpose of supporting the expansion of Japanese corporate networks throughout Asia (Buying Power: The Political Economy of Japan's Foreign Aid, Lynne Rienner, 1995).

Contrary to the popular image of Japan as an economic juggernaut rolling through Asia, at least as viewed from Jakarta, Tokyo appears curiously passive and sometimes even timid rather than overbearing or formidable. The United States and China, with much smaller economic presences in Indonesia (especially in the case of China), figure far more prominently in Indonesian foreign policy thinking.

The Miyazawa Plan

What is the potential for significant change in Indonesia's relations with Japan in the aftermath of the regional financial crisis? For Indonesia--and much of Southeast Asia--the current financial crisis constitutes a major watershed: many economic and domestic political changes are flowing from it. It seems unlikely that it will not also have significant consequences for the way in which Indonesia interacts with other countries, most notably Japan. I shall focus on two key issues here: first, the possible foreign policy implications of the financial rescue of Indonesia that is currently underway; and second, the possible foreign policy implications of changes in the profile of foreign investment in Indonesia.

Having enjoyed strong economic growth for many years, Indonesia is now in an extremely deep economic crisis. Rather than expanding by 6% or more per year (as it did throughout much of the preceding decade), in 1998 the economy contracted by a massive 14%. This has been called the most radical economic reversal suffered by any country since the Second World War. Closely associated with this collapse in output has been the rapid outflow of capital, with both foreign and local investors shifting resources out of the country. Given this severe economic contraction and massive capital flight, an enormous burden falls on government spending to help resuscitate the economy. And here international assistance has been crucial, since the government's own budgetary position has inevitably deteriorated radically with sharply reduced tax receipts and sharply increased debt-service obligations. Simply put, the economic crisis has rendered Indonesia desperately dependent on external assistance to cover a gaping hole in government finances.

In 1998 the International Monetary Fund (IMF) covered this fiscal shortfall, releasing nearly US$8 billion to Indonesia for budgetary supplementation. However, the IMF funding was heavily front-end loaded and is scheduled to taper off quickly in 1999, just as the country enters a precarious economic and political juncture. By the second half of 1998, it was becoming apparent that the key multilateral financial institutions--the IMF, the World Bank, and the Asian Development Bank--were all approaching the limits of their ability to continue extending large-scale financial assistance to Indonesia. Furthermore, neither the United States nor Europe appear likely to extend more than modest additional bilateral assistance.

Against this bleak backdrop, in October 1998, Japan suddenly announced a bold and large-scale financial assistance program for the region--the Miyazawa plan. This package of US$30 billion is to be spread across five struggling Asian economies and holds out the promise of desperately needed additional financial assistance without the strict policy reform conditions attaching to U.S. or IMF assistance. The announcement of the Miyazawa Plan also suggests that Tokyo, much criticized for indecision and immobilism during the first twelve months of the crisis, might indeed now be willing to take on a more substantive regional leadership role. At least at the regional level, perhaps Tokyo is at last willing to play something other than just the part of a supporter to Washington.

The Miyazawa money assumes pivotal significance because, in a situation where there is so little private investment yet flowing back into the country--as was also true in the late 1960s--ODA once again becomes critical. This points strongly to the potential for Japan to obtain increased policy leverage within Indonesia.

Whether the Miyazawa initiative will in fact translate into substantially increased policy influence for Tokyo in Jakarta will depend heavily on two considerations: how the money is used, and whether Tokyo is willing and able to exploit the opportunity. Will Tokyo seek to tie the Miyazawa funds closely to the commercial interests of Japanese firms as opposed to allowing Jakarta greater flexibility to allocate the funds to priorities of its choosing? If the former, while it will be of some economic benefit to Indonesia in so far as it will at least be stimulating some economic activity, it will be unlikely to generate major policy leverage for Tokyo simply because such undertakings are unlikely to be of high political value to the Indonesian government. Conversely, if the funding can be used for spending initiatives of major importance to the Indonesian government, then the government will of course be loathe to lose it.

At this stage the signals are ambiguous. In early February 1999, Japan pledged US$2.4 billion to Jakarta, with the prospect of more to come. Although Jakarta had been hoping for a larger injection from Japan, this represents a very substantial chunk of the funding necessary to close the fiscal gap. For the 1999/2000 budget (which began in April 1999), Jakarta will need to finance more than 35% of its spending with foreign assistance. In dollar terms, this is roughly US$10.3 billion. The Consultative Group on Indonesia (CGI), the multimember consortium comprising much of the OECD and several multilateral agencies, agreed in 1997 to provide Indonesia with US$4 billion in additional 1999/2000 aid. The World Bank and the Asian Development Bank (themselves members of the CGI) have agreed to provide a further US$1 billion each. Together, these sums account for US$6 billion of the estimated US$10.3 billion that will be required. When the Miyazawa US$2.4 billion is added, the remaining shortfall shrinks to US$1.9 billion, which Jakarta is now scrambling to raise from Japan, the multilateral agencies, and the other large CGI members (Jakarta Post, February 10, 1999).

Initial reports suggest that, in practice, at least some of the Japanese funding will indeed be narrowly tied to infrastructure projects and must be carried out through Japanese construction companies and using Japanese imports (Jakarta Post, January 16, 1999). There have already been complaints in Indonesia that building new highways is scarcely one of its own priorities in the present circumstances. If the Miyazawa Program turns out to be little more than the familiar pattern of Japanese assistance that is really intended as a transfer to Japanese corporations, nothing will have changed. However, if Tokyo is in fact willing to allow resources to be used in ways that the Indonesian government (and other regional governments) value most, then a real window of politico-strategic opportunity will be opened for Japanese foreign policymakers.

Because Indonesia, along with Thailand, Malaysia, and the Philippines, are financially desperate, supporting a Japanese foreign policy initiative--say, the development of an Asian Monetary Fund or a revitalization of the still-born Hashimoto Doctrine of 1997--would appear a small price to pay for flexible and generous financial support, especially against a backdrop of America's irksome combination of financial tight-fistedness and policy heavy-handedness in Asia. But is Tokyo ready to assume a more substantive leadership role in Asia? Changes in the regional environment--most notably the need to balance a re-emergent China and fluctuations in U.S. approaches to China--provide powerful incentives for Japan to contemplate forging stronger politico-strategic ties with Southeast Asia.

The U.S. as Winner?

However, there are also major factors pulling in a quite different direction. Prior to the crisis Japan was, as already noted, the dominant foreign investor in Indonesia and throughout East Asia. And, in proportional terms, the surge of Japanese investment from the 1970s and particularly from the mid-1980s came at the expense of the United States. The United States did in fact remain an important foreign investor in Indonesia, but this was primarily in the oil and mining sectors. And U.S. investment began to make something of a comeback in the mid-1990s through the newly liberalized capital markets, as elsewhere in East Asia. But overall, and particularly in Indonesia's high profile manufacturing sector, Japanese investment was overwhelmingly dominant. This seems likely to change in the aftermath of the crisis.

Several factors point to this conclusion. First, and most obviously, is the severe contraction in the Indonesian economy and, in particular, the crushing debt of many Indonesian companies caught by the radical currency devaluation. This has meant that many of Indonesia's big corporations are being forced to sell assets in an effort to keep their creditors at bay and to stave-off complete collapse. Leaving aside those Indonesian companies that were never much more than crony rent-collecting operations (such as those of the Suharto children), since late 1998 a growing number of the most impressive Indonesia corporate empires are being forced towards asset divestiture. Indicative of what is to come are the current discussions between the once mighty Salim group and Ford over the possible purchase of Salim's automotive arm (Wall Street Journal, March 23, 1999). The corporate fire-sale in Indonesia parallels what has been happening elsewhere in Asia over the past year, although it has been proceeding much more slowly in Indonesia because of ongoing political uncertainty and the protracted nature of foreign debt negotiations. However, sooner or later, as foreigners overcome their short term wariness of the Indonesian market and as Indonesian companies run out of options for delaying a reckoning with their creditors, the pace of foreign acquisition of Indonesian firms will pick up--just as it has in Korea, Thailand, and Japan itself.

As this comes to pass, it is likely to be American rather than Japanese investors who consume the lion's share of the opportunities on offer. The reason is twofold. First, few Japanese firms are in a position to contemplate new investments in Indonesia because of the prolonged recession in Japan itself. Second, many Japanese investors already present in Indonesia have also suffered heavy losses from the economic collapse and are themselves likely to be forced into asset divestiture. Outbound foreign investment from Japan has fallen sharply, and a substantial portion of the private capital that is still flowing from Japan to Indonesia is to help prop-up existing Japanese investments in Indonesia.

For at least the next few years, there is unlikely to be much significant new Japanese private capital flowing into Indonesia. By contrast, U.S. companies and financial institutions are now overloaded with cash and in a strong position to pick and choose among the investment opportunities that are becoming available. It seems very likely that as foreign capital returns to Indonesia over the next 12-24 months, it will be U.S. investors who will be at the forefront. The most likely sectoral targets will be financial services, real estate, and some areas of manufacturing. This has been the pattern elsewhere in Asia over the past 12 months.

Such an outcome would carry a number of remarkable ironies. Having been widely criticized for being left behind in Asia by Japan during the 1980s and early 1990s, the United States is now poised to begin closing the gap. Along with differences in the Japanese and American business cycles (Japan was buoyant when America was in the economic doldrums, and now the tables have been turned), the fact that America largely missed the Asian investment boom in the 1980s and early 1990s means that it was not badly burned by the crash of the late 1990s. Although it is premature to speculate about the possible implications of the U.S. becoming a dominant investor in the region--after all, the influx of U.S. capital has yet to take place in Indonesia--it does seem reasonable to assume that the U.S. will take a heightened interest in and pay more attention to Indonesia and Southeast Asia in general.

Indonesia is still in the midst of a deep economic and political upheaval. Japan, too, is in the grip of a prolonged and perhaps mindset-changing economic recession. Both countries are located in a region characterized by important geopolitical changes, most notably the ascendancy of China and fluctuations in the way the United States approaches China. While Japan has wielded much less policy influence in Indonesia than is commonly assumed, there is now an historic opening for Tokyo to forge much deeper and broader policy connections with Jakarta. Plainly, Indonesia is of much less moment to Japan than China or Russia, to say nothing of the United States. Nonetheless, it remains the case that Indonesia, and by extension ASEAN, are likely to prove valuable foreign policy partners for Tokyo. Not only do they possess an effective veto on virtually all major proposals for regional cooperation (by virtue of ASEAN being the one coherent international organization of the nations in Asia), but more broadly, a coalition with ASEAN may well be Tokyo's most useful option for seeking to carve out a path for itself between the two truly big powers in the Pacific, China and the United States.

One should not pretend that such a scenario is anything less than a good distance away. The powerful domestic political obstacles within Japan to a more active and independent posture cannot be ignored. Equally, we cannot ignore the longer term consequences of the United States's increasing its economic presence in Indonesia and the region more broadly at the very time when Japan may be seeking to strengthen its policy presence. Suffice to say then, that the changes underway in Indonesia, in Japan, and in the region at large point to greater foreign policy flux over the next 5-10 years than we have seen for several decades.

ANDREW MACINTYRE is an associate professor in the Graduate School of International Relations and Pacific Studies at the University of California, San Diego. Among his works are Business and Politics in Indonesia (Allen & Unwin, 1990); Business and Government in Industrializing Asia (Allen & Unwin, 1994); and "The Indonesian Debacle: What Americans Need to Know and Do," The National Interest (Fall, 1998).

Table 1
Aggregate Economic Ties: Indonesia, Japan, and Other Selected Partners
(share of total)
  Japan ASEAN USA Germany UK France
Imports 20% 12% 12% 7% 3% 2%
Exports 26% 15% 14% 3% 2% 2%
Bank Lending 40% n.a. 10% 10% 7% 8%
FDI (approvals) 26% 21% 2% 1% 11% neg.
ODA 60% n.a. neg. 15% neg. 5%
Notes: n.a.=Not Available; neg.=Negligible

Sources: Import and Export data from the Central Bureau of Statistics (Jakarta) OECD Bank Lending data from the Bank of International Settlements (Basle) FDI data from the Investment Coordination Board (Jakarta) ODA data from the Ministry of Foreign Affairs (Tokyo)

Table 2
Indonesians Studying Abroad

Host Country Number of Students
USA 12,820
Australia 2,716
Germany 2,107
Japan 1,077
UK 936
Netherlands 601
Canada 502
All Countries 22,136

Source: UNESCO, Statistical Yearbook 1998, Vol. 3, p. 410. See S. Sudo, "From Fukuda to Takeshita: A Decade of Japan-ASEAN Relations," Contemporary Southeast Asia, Vol. 10, No. 2 (1988), p. 135 for mid-1980s data.

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