Why did Indonesia agree to sign a peace deal with Israel?
IN SEPTEMBER 2020, the United Arab Emirates, Bahrain and Morocco signed the Abraham Accords with Israel. But under the Trump’s administration’s original plan, there would have been a fifth signatory: Indonesia.
According to a source close to the negotiations, so keen was the US to have Indonesia – the world’s largest Muslim state by population – included that it offered up to $2 billion more in aid if Indonesia agreed to sign. The talks, I am told, were nearly successful, but in the end the Indonesians would not make the final push.
When rumours that Indonesia was about to sign started to fly around the diplomatic world, Indonesian foreign minister Retno Marsudi said that Indonesia had “no intention to open diplomatic ties with Israel.” Three and a half years later that intention has clearly changed, as this week it became clear that Indonesia is indeed about to establish diplomatic ties with Israel.
The timing has come as a surprise to many, given that Indonesia has long been a strong supporter of the Palestinian cause, has been a vocal critic of the war in Gaza and even filed its own case against Israel at the ICJ in January. Indonesia’s highest clerical body, the Indonesian Ulema Council (MUI), has repeatedly expressed its opposition to the existence of Israel, let alone recognition, saying for example that Indonesia “must remain consistent in its identity as a nation that rejects colonisers.” Indonesia also faces a growing threat from Islamist groups, such as the Islamic Defenders Front, and recognition of Israel is grist to their mill.
Just two weeks ago Ari Dwipayana, a key aide to Indonesian president Joko Widodo, was dismissing a report in Jewish Insider that Israel and Indonesia had planned to announce the establishment of diplomatic relations in October as “completely incorrect”. According to the news outlet, a senior adviser to President Jokowi and Ronen Levy, the then director general of the Israeli Foreign Ministry, had met in Jerusalem the previous month with Dan Shapiro, then the State Department’s senior advisor for regional integration. This report – and a picture showing Indonesian officials in Israel – caused outrage in Indonesia as it is illegal for Indonesian officials to visit states not recognised by Indonesia.
The Jewish Insider report was clearly correct. But the principal reason for Indonesia’s change of heart since 2020 is based almost entirely on Indonesia’s selfinterest – and is far more prosaic than the era-changing vision of the Abraham Accords and. Indonesia is set to begin formal diplomatic relations with Israel because of one acronym: OECD (Organisation for Economic Co-operation and Development).
Indonesia has been trying to join the OECD for the past few years but in recent months an obstacle emerged. New members require the approval of all 38 existing members – one of which is Israel.
It has been reported that OECD secretary general Mathias Cormann had initially made clear to Israel that it expected it “not to object” to Indonesia’s application to join, but
Israel refused – a stance hardened by Indonesia’s criticism of the Gaza war and its moves against Israel at the ICJ in The Hague.
Israeli foreign minister Israel Katz is said to have demanded that Indonesia show a “gesture of goodwill”. The OECD secretary general agreed to insist that diplomatic relations were established. Negotiations towards such an agreement had been proceeding for some months, with both sides anticipating a successful outcome before October 7 derailed everything.
Reports suggest that this normalisation of relations would have been agreed last autumn. A Memorandum of Understanding which is said to have included a commitment towards Indonesia joining the Abraham Accords process was signed in September.
But whilst this new diplomatic process has come as a surprise to many, there have been long been economic ties.
The exact amount of trade is impossible to quantify as much of it is via third countries, but it is estimated by one analyst as “the high end of hundreds of millions of dollars a year”, most of which is said to be Indonesian agri-tech exports – and there has been an Israel-Indonesia Chamber of Commerce in Tel Aviv since 2009.
According to Israeli news site Yediot Ahronot, OECD secretary general Cormann wrote to Indonesia two weeks ago saying Israeli approval was the only remaining obstacle to membership: “I am pleased to announce the Council has officially agreed to the clear and explicit early conditions according to which Indonesia must establish diplomatic relations with all OECD member countries before any decision is made to admit it to the OECD…”
Israeli foreign minister Israel Katz replied: “I anticipate a positive change in its policy toward Israel, especially [Indonesia] abandoning its hostile policy toward it, leading the path to full diplomatic relations between all sides.”
The signs are now all positive.
Israel Katz demanded a gesture of goodwill