Malaysia-Indonesia ties at a critical juncture

IT ALL began over Malaysia's detention two weeks ago of three Indonesian fisheries department officers for allegedly intruding into waters both countries have staked territorial claims on.

Within days, the incident mushroomed into one of the most serious diplomatic rows in years.

Demonstrators in Jakarta lobbed human faeces into the Malaysian Embassy grounds and legislators in the Indonesian Parliament demanded a public apology from Kuala Lumpur.

In Malaysia, the response was muted, with the media directed to downplay the public row and politicians told to refrain from making any provocative comments apart from backing Indonesian President Susilo Bambang Yudhoyono's call that both sides should remain calm.

Indonesian Foreign Minister Marty Natalegawa started a two-day visit to Malaysia yesterday and the issue was set to be discussed in his meeting with Malaysian counterpart, Datuk Seri Anifah Aman.

Like most spats between the two sides, this latest row will be settled in coming days, diplomats in Kuala Lumpur and Jakarta say. But the starkly conflicting responses underscore the widening disconnect between South-east Asia's two predominantly Muslim neighbours who share similarities in culture, language and religious customs.

More importantly, the growing frequency and intensity of the Indonesian-Malaysian rows are raising concerns that both countries are headed for rougher waters in their diplomatic ties in coming years, say diplomats and political analysts.

A potential source of conflict will be over resources, the analysts say.

The Indonesian economy has been expanding rapidly in recent years, buoyed by the heavy exploitation of its commodity and mineral resources.

That, in turn, will make negotiations on overlapping territorial claims with Malaysia, a neighbour it shares thousand of kilometres of borders and waterways with, more intense and heated.

Consider the resource-rich Ambalat region off Borneo's coast, where both countries have staked separate oil and gas concession claims.

In March 2005, Indonesia flexed its military muscles when it sent warships and fighter jets to the area, where both sides have awarded contracts to major foreign firms to undertake exploration activities.

Bilateral talks over Ambalat are ongoing, but diplomats say tensions between the two countries over the site could easily surface.

The stakes are high for both countries.

Malaysia has huge investments in the ownership of Indonesian financial institutions and controls large swathes of land dedicated to oil palm cultivation.

Indonesians account for nearly 70 per cent of the legal and illegal foreign labour force in Malaysia, which is estimated at around 1.7 million people, making the community a potential security threat when relations are testy.

Several analysts and diplomats argue that Malaysia is not focusing enough time and effort on building already strong bilateral links between the two countries.

"Malaysia needs to take its relations with Jakarta seriously. There is a high level of resentment towards Malaysia among Indonesians, particularly in Jakarta, and that needs to be addressed," said columnist Karim Raslan, who divides his time between the two countries.

Much of that resentment is because the political cultures in both countries are becoming increasingly incompatible, analysts say. Indonesia and Malaysia have long had single political entities with strong personalities at the helm.

But the ouster of long-time president Suharto in a popular revolt in May 1998 paved the way for radical reforms that have made Indonesia the region's poster child of political and economic stability.

Since then, the country has had four presidents, with Dr Yudhoyono currently serving his second term in office.

While power in Indonesia has devolved from the centre, political progress is slow in Malaysia. The country continues to be governed by the ruling United Malays National Organisation, or Umno, which is struggling to renew its appeal among Malaysians after it lost its two-thirds majority in Parliament during the 2008 elections to a loose coalition of opposition parties.

"Malaysia is very much a top-down power structure and there is a general reluctance among Malaysia's business and political elite to accept that the Indonesia system today is more mature," said a head of a Malaysian think-tank with strong links to Jakarta.

Relations between Malaysia and Indonesia have long relied on ties between the countries' top two leaders to iron out differences.

Under current Indonesian President Dr Yudhoyono, Malaysian politicians and businessmen have relied on the Indonesian leader's spokesman and main trouble-shooter, Dino Patti Djalal, as a key point person in managing relations between the two countries.

But Dino's recent appointment as Indonesia's ambassador to the United States has created a big vacuum. "The new advisers around the (Indonesian) President have a different worldview about Malaysia, which doesn't bode well for relations," said one editor of a top Indonesian current affairs magazine in Jakarta.

The Straits Times/ANN