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Comments by new U.S. Secretary of State Colin Powell have stirred some controversy in Australia. During his confirmation hearings, Powell said that the United States would let Australia take the lead in Indonesia, “as they have done so well in that troubled country.” Critics saw this as evidence that the Bush administration will seek to badge Australia as its deputy sheriff and point it at Indonesia. Such a policy would serve none of the parties involved.

In relation to Indonesia, Australian and American interests, while congruent, are not identical. The essential strategic interest that they share in relation to Indonesia is the integrity of the archipelago and maritime passage through the straits that link the Indian and Pacific oceans. That is also a vital interest for Japan, America’s key Asian ally, because of its reliance on oil from the Middle East. But for reasons of geography, Indonesia looms much larger for Australia than it does for the U.S. So Australia cannot frame its relationship with its most important neighbor solely within the context of its alliance with America.

Differences arose between Australia and America over the handling of the political fallout from Indonesia’s economic crisis in 1998. Neither country managed this as deftly as it might have. The Clinton team saw President Suharto merely as the Philippines’ Ferdinand Marcos writ large. So it seized the chance to get rid of him, using the International Monetary Fund as its instrument.

Certainly, Suharto was an autocrat who tolerated corruption. But he had also presided over unprecedented economic growth, and had been an important leader in the Association of Southeast Asian Nations. Indonesia’s relationship with Australia also became an important element in regional stability — not least because Suharto quietly valued Australia’s alliance with the U.S. Recognizing Suharto’s contribution to regional stability, Australia sought to quarantine the problem of East Timor, the Portuguese colony that Indonesia invaded in 1975, and ruled with a heavy fist thereafter. By 1995, relations between the two countries had developed to such an extent that they signed an unprecedented security agreement.

That strategic alignment was implicitly targeted at growing Chinese pressure in the South China Sea. Over time, it might have formed the center of an informal regional-security network that could have helped compensate for the essential weakness of ASEAN — the inability of its members to agree on how to respond to a rising China. A growing Australia-Indonesia alignment might, for example, have encouraged Japan to take part in collective security arrangements.

But all that ended when Suharto fell. Worse, East Timor was emboldened to push for early independence. In 1999, the appalling behavior of the army-backed Indonesian militias in East Timor — after the East Timorese voted overwhelmingly for independence in a U.N.-sponsored referendum — made Australia’s intervention there inevitable.

As a consequence of that U.N.-mandated intervention, Australian relations with Indonesia are at depths not seen since the mid 1960s. Many Indonesians now believe that Australia seeks to break up their archipelago, including by fostering separatism in Irian Jaya (West Papua). Nothing Australia can say is likely to convince them otherwise. And Indonesia is spiraling downward, disintegration at the periphery reflecting political tensions at the center.

Australia was right to warn the Clinton administration about the lack of strategic thinking in its approach to Indonesia. But Australia’s prime minister, John Howard, has not always had a sure touch himself. In the early stages of the Timor operation, he called publicly for “U.S. muddy boots on the ground.” That was never a prospect. Given Australia’s previous rhetoric about being an influential middle power, Washington expected Australia to fix this problem on its doorstep — although it did provide valuable logistic and diplomatic support. Howard stumbled again when asked by a journalist if Australia was playing “deputy sheriff” to the U.S. He did not demur. Now the “deputy sheriff” tag has come back to haunt him through the misinterpretation of Powell’s remarks by more parochial elements of the Australian media.

Canberra will welcome the Bush administration’s more strategically oriented approach to East Asia. But Australia’s main task in relation to Indonesia is to restore the subtle and hard-won understandings that once underpinned the bilateral relationship, and thus contributed greatly to regional security. That task would not be made any easier if Australia were to become identified as America’s sidekick.

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