Despite Denials, Indonesia Greatly Expanding Economic Ties With Israel

By John Gee

As reported in the previous issue of the Washington Report, in November Indonesian Foreign Minister Alwi Shihab stated that his country’s plan to open trade ties with Israel was “only an appeal instead of a government policy.” In spite of this defensive Indonesian government response to opposition to a strengthening of links between Indonesia and Israel, ties are steadily but quietly being expanded.

A direct telephone link was opened from Indonesia to Israel in December. Previously, no one could call Israel directly from Indonesia. A few days later, on Dec. 19, an Israeli trade delegation flew into Jakarta for talks about the possible establishment of official economic ties and the expansion of business relations. The delegation was headed by Victor Harel, deputy director-general for economic affairs of the Israeli Foreign Ministry. At the conclusion of the visit, it was reported that the two states had agreed to set up chambers of commerce to promote business connections between them. A return visit by Indonesian businesspeople, led by Abu Raziel Bachri, president of the Indonesian Chambers of Commerce, is due to take place this spring.

Perhaps partly in an attempt to blunt opposition, while Israel will set up a business desk at Indonesia’s Chambers of Commerce, Indonesia will merely set up a desk in Amman, Jordan, which will be officially responsible for promoting business with Israel as well as with Jordan.

Earlier in December, Indonesian President Abdurrahman Wahid had stated that his country would open a trade office in the Palestinian territories in January 2000. After traveling to Jordan, Kuwait and Qatar in November 1999, the Indonesian president said he will visit Palestine, Egypt and Saudi Arabia early in 2000.

Israel already has large investments in Indonesia, as the Indonesian president himself pointed out to members of the National Economic Council on Dec. 4. He said that Israel had quietly invested $200 million in Indonesia, mainly through foreign companies.

The interest of some Indonesian leaders in greater ties with Israel is not based solely on the direct economic benefits that they expect to accrue to their country. In an interview with the magazine Tempo in November, Foreign Minister Shihab said that the real aim of the move was to influence “the Jewish lobby” in the U.S.

“We have to be frank, the Jewish lobby in the American Congress is very strong,” Shihab said, adding that “the U.S. cabinet is also dominated by Jews.”

Libya Promotes Peace Deal in the Philippines

The Republic of the Philippines is the only Roman Catholic country in Asia, but it also has a Muslim minority. Usually called Moros, the Muslims form a majority of the population in most of the southern island of Mindanao and throughout the two chains of small islands extending between Mindanao and the Malaysian state of Sabah. The Moros put up a strong resistance to Spanish occupation and, from 1899, to the U.S. troops who took over the Philippines from Spain.

During the rule of the late President Ferdinand Marcos, the Moro National Liberation Front (MNLF) launched a guerrilla campaign against the Filipino authorities to back its demand for a separate Muslim state. It received financial and military aid from Libya and won effective control of large areas of the countryside.

But MNLF fortunes changed in the 1980s. Marcos was brought down by popular protest and his successors enjoyed greater popular legitimacy. Libya withdrew most of its material support from the MNLF and helped facilitate talks with the government, which resulted in the signing of a peace agreement in 1996.

However, the Moro Islamic Liberation Front (MILF) had split from the MNLF and was not party to the agreement. Its fighters have continued to clash with government forces, although it, too, says it is ready to seek a negotiated settlement with the Philippine government. The sticking point is the MILF’s insistence on winning an independent state and the Philippine government’s refusal to contemplate such an outcome to negotiations.

Meanwhile, Libya has put its influence behind the search for a negotiated settlement. Al-Islam Qaddafi, son of Libyan leader Muammar Qaddafi, visited the headquarters of the MILF in December and met its chairman, Hashim Salamat.

Urging the MILF to negotiate for autonomy rather than separation, the younger Qaddafi said that Libyan businessmen would invest in the region if this happened. Salamat said that any move to drop the demand for independence would have to be approved by the Muslim people but, significantly, did not reject the option out of hand.

Barak Eyes ASEAN as Model for Mideast

Although final peace agreements have not yet been reached between Israel, the PLO, Syria and Lebanon, there is concern among other Arab governments that if such treaties are signed Israel will use its political leverage in the U.S. to dominate the region through trade and investment.

Israeli Prime Minister Ehud Barak’s position seems to give some recognition to Arab concerns. According to Israeli press reports, in November 1999 he ratified a plan for Middle East Regional Cooperation which took as its model ASEAN: the Association of Southeast Asian Nations.

ASEAN comprises Indonesia, Malaysia, Brunei, Thailand, Myanmar, the Philippines, Singapore, Vietnam, Laos and Cambodia. This is a very diverse regional grouping: the first three states named are predominantly Muslim. Thailand and Myanmar are Buddhist, the Philippines, Christian and Singapore has a wide range of religions. Vietnam, Laos and Cambodia are new ASEAN members under communist/post-communist regimes.

Singapore is the smallest member state, but has the most robust economy. Brunei has the highest per capita income, thanks to its oil wealth. Laos, Cambodia and Myanmar are very poor.

Myanmar has an internationally condemned military government, while Indonesia enjoys the sympathy of much of the world in its attempts to build a democratic political system.

Since such diversity precludes integration on the model of the European Union, the ASEAN states are content to set their sights lower. They work on the basis of achieving unanimity, effectively giving every state the power of veto over any policy initiative. ASEAN heads of state and foreign ministers meet from time to time to discuss matters of common interest. Sometimes this results in agreement on a common political position or upon regional action.

There is a consensus that ASEAN members should try to avoid airing differences in public—“try,” because it is not always possible. Last year, Malaysia and Singapore finally went public with their complaints about the environmental impact of the burning by farmers of Indonesia’s tropical rainforest, after diplomatic exchanges produced no results.

ASEAN members are committed to a policy of non-interference in each others’ affairs. The most touchy or repressive states often see this as including an obligation on their neighbors’ parts to curb critical media coverage.

This would appear to suit Israel and the Arab states as a model for their future relationship, if and when they go beyond the “cold peace” that has existed between Egypt and Israel for two decades. However, there seem to be some significant shades of difference between what Israel will propose to the Arab states and how ASEAN functions.

In an article on the proposal which appeared in the Israeli daily Ha’aretz on Dec. 21, Aluf Ben wrote that Israel would offer an arrangement based on the following principles:

“International disputes in the region are to be solved by talks and avoiding incitement.

“Regional economic cooperation and advancement of regional security are to be common goals.

“Gradual construction of the organization and its institutions is to be paced according to the normalization processes in the region and its economic development.”

It seems that, in spite of the peace treaties which it expects to reach, Israel still wants to stress the issue of security. ASEAN was originally founded as a reaction to what was viewed as an external threat—the spread of communism in Southeast Asia—which was also manifested by Chinese support for local communist parties.

For Israel, the danger comes chiefly from within the proposed grouping. Israel anticipates continued opposition from inside the Arab world, and wants Arab governments to be partners in keeping such opposition firmly under control. When Israeli officials talk about “avoiding incitement,” they mean not only what governments say, but what the media, political parties and individual opinion molders might say. This is illustrated by past Israeli complaints about Egyptian and Jordanian official toleration of fierce opposition criticism of Israel.

John Gee is a free-lance journalist based in Singapore and the author of Unequal Conflict: Israel and the Palestinians, available through the AET Book Club.