Calhoun: The NPS Institutional Archive DSpace Repository Theses and Dissertations 1. Thesis and Dissertation Collection, all items 2019-06 FRIEND OR FOE?: INDONESIA'S SHIFTING POLICY IN RESPONSE TO CHINA'S ASSERTIVENESS IN THE SOUTH CHINA SEA Nugroho, Febriyanto Adi Monterey, CA; Naval Postgraduate School http://hdl.handle.net/10945/62790 Downloaded from NPS Archive: Calhoun NAVAL POSTGRADUATE SCHOOL MONTEREY, CALIFORNIA THESIS FRIEND OR FOE?: INDONESIA’S SHIFTING POLICY IN RESPONSE TO CHINA’S ASSERTIVENESS IN THE SOUTH CHINA SEA by Febriyanto Adi Nugroho June 2019 Thesis Advisor: Michael S. Malley Co-Advisor: Anshu N. Chatterjee Approved for public release. Distribution is unlimited. THIS PAGE INTENTIONALLY LEFT BLANK Form Approved OMB REPORT DOCUMENTATION PAGE No. 0704-0188 Public reporting burden for this collection of information is estimated to average 1 hour per response, including the time for reviewing instruction, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Washington headquarters Services, Directorate for Information Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and to the Office of Management and Budget, Paperwork Reduction Project (0704-0188) Washington, DC 20503. 1. AGENCY USE ONLY 2. REPORT DATE 3. REPORT TYPE AND DATES COVERED (Leave blank) June 2019 Master’s thesis 4. TITLE AND SUBTITLE 5. FUNDING NUMBERS FRIEND OR FOE?: INDONESIA’S SHIFTING POLICY IN RESPONSE TO CHINA’S ASSERTIVENESS IN THE SOUTH CHINA SEA 6. AUTHOR(S) Febriyanto Adi Nugroho 7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES) 8. PERFORMING Naval Postgraduate School ORGANIZATION REPORT Monterey, CA 93943-5000 NUMBER 9. SPONSORING / MONITORING AGENCY NAME(S) AND 10. SPONSORING / ADDRESS(ES) MONITORING AGENCY N/A REPORT NUMBER 11. SUPPLEMENTARY NOTES The views expressed in this thesis are those of the author and do not reflect the official policy or position of the Department of Defense or the U.S. Government. 12a. DISTRIBUTION / AVAILABILITY STATEMENT 12b. DISTRIBUTION CODE Approved for public release. Distribution is unlimited. A 13. ABSTRACT (maximum 200 words) Indonesia’s foreign policy stance toward China is a significant issue as it is a major player and a core member of ASEAN. Southeast Asia is increasingly a competitive and important region of the world where China is asserting its great power status. Since 2009, China-related South China Sea controversies have intensified. After submitting its South China Sea claim to the United Nations in opposition to Malaysia and Vietnam’s claim in 2009, China has increasingly defended its claim through increasing exercises and other forms of power assertion. The main purpose of this thesis is to show how and why Indonesia’s China policy shifted after 2009 in reaction to China’s action. The thesis explains each presidential administration’s China policy between 1999 and 2019 by using Kuik’s framework to identify the presence of two counteracting policies: risk-contingency and returns-maximizing options. Both of these policy options were executed by each Indonesian presidential administration toward China. After 2009, Indonesia’s degree of power rejection toward China increased in comparison to power acceptance. It showed a growing tendency to balance against China by intensifying its risk-contingency policy. Thus, Indonesia’s China policy shifted in the direction of balancing post-2009. 14. SUBJECT TERMS 15. NUMBER OF Indonesia, China, Southeast Asia, South China Sea, balancing, bandwagoning, hedging, PAGES international relations, foreign policy, small state, medium state, weaker state, balance, 131 power, superpower, great power, leading state, threat, response, great power, geo politics, 16. PRICE CODE Indo Pacific 17. SECURITY 18. SECURITY 19. SECURITY 20. LIMITATION OF CLASSIFICATION OF CLASSIFICATION OF THIS CLASSIFICATION OF ABSTRACT REPORT PAGE ABSTRACT Unclassified Unclassified Unclassified UU NSN 7540-01-280-5500 Standard Form 298 (Rev. 2-89) Prescribed by ANSI Std. 239-18 i THIS PAGE INTENTIONALLY LEFT BLANK ii Approved for public release. Distribution is unlimited. FRIEND OR FOE?: INDONESIA’S SHIFTING POLICY IN RESPONSE TO CHINA’S ASSERTIVENESS IN THE SOUTH CHINA SEA Febriyanto Adi Nugroho Lieutenant Commander, Indonesian Navy Sarjana Hukum (Bachelor of Laws), Yos Sudarso University, 2012 Submitted in partial fulfillment of the requirements for the degree of MASTER OF ARTS IN SECURITY STUDIES (COMBATING TERRORISM: POLICY AND STRATEGY) from the NAVAL POSTGRADUATE SCHOOL June 2019 Approved by: Michael S. Malley Advisor Anshu N. Chatterjee Co-Advisor Afshon P. Ostovar Associate Chair for Research Department of National Security Affairs iii THIS PAGE INTENTIONALLY LEFT BLANK iv ABSTRACT Indonesia’s foreign policy stance toward China is a significant issue as it is a major player and a core member of ASEAN. Southeast Asia is increasingly a competitive and important region of the world where China is asserting its great power status. Since 2009, China-related South China Sea controversies have intensified. After submitting its South China Sea claim to the United Nations in opposition to Malaysia and Vietnam’s claim in 2009, China has increasingly defended its claim through increasing exercises and other forms of power assertion. The main purpose of this thesis is to show how and why Indonesia’s China policy shifted after 2009 in reaction to China’s action. The thesis explains each presidential administration’s China policy between 1999 and 2019 by using Kuik’s framework to identify the presence of two counteracting policies: risk-contingency and returns-maximizing options. Both of these policy options were executed by each Indonesian presidential administration toward China. After 2009, Indonesia’s degree of power rejection toward China increased in comparison to power acceptance. It showed a growing tendency to balance against China by intensifying its risk-contingency policy. Thus, Indonesia’s China policy shifted in the direction of balancing post-2009. v THIS PAGE INTENTIONALLY LEFT BLANK vi TABLE OF CONTENTS I. INTRODUCTION..................................................................................................1 A. MAJOR RESEARCH QUESTION..........................................................1 B. SIGNIFICANCE ........................................................................................3 C. LITERATURE REVIEW .........................................................................3 1. Weaker-State Preferences: Balancing, Bandwagoning, and Hedging ....................................................................................4 2. Understanding Southeast Asia’s Hedging Behavior ...................7 3. Indonesia’s Strategic Approach toward China .........................12 4. Kuik’s Framework and Its Importance for This Research .....13 D. POTENTIAL EXPLANATION AND HYPOTHESIS .........................17 E. RESEARCH DESIGN .............................................................................18 F. THESIS OVERVIEW .............................................................................19 II. INDONESIA’S POLICY ON CHINA 2000−2009 ............................................21 A. CHINA AND SUHARTO: BALANCING EAST AND WEST ...........21 B. ABDURRAHMAN WAHID ADMINISTRATION (1999−2001): ESTABLISHING A FOUNDATION .....................................................25 1. Binding Engagement ....................................................................25 2. Economic Pragmatism .................................................................28 3. Dominance Denial ........................................................................30 4. Policy Rationale ............................................................................30 C. MEGAWATI SUKARNOPUTRI ADMINISTRATION (2001−2004): BUILDING THE PILLARS ............................................31 1. Binding Engagement ....................................................................31 2. Economic Pragmatism .................................................................34 3. Dominance Denial ........................................................................36 4. Policy Rationale ............................................................................37 D. SUSILO BAMBANG YUDHOYONO ADMINISTRATION (2004−2009): BECOMING A STRATEGIC PARTNER AND REGIONAL POWER ..............................................................................37 1. Binding Engagement ....................................................................38 2. Economic Pragmatism .................................................................41 3. Dominance Denial ........................................................................42 4. Policy Rationale ............................................................................43 E. CONCLUSION ........................................................................................44 III. INDONESIA’S SHIFTING POLICY ON CHINA POST-2009 ......................47 vii A. EXPANDING THREAT PERCEPTION AFTER CHINA’S 2009 CLAIM ......................................................................................................47 1. China’s Reclamation Campaign and Militarization .................50 2. Conflict Development ..................................................................51