The paper analyzes Indonesia’s foreign policy approach of providing foreign aid through Indonesian AID, a mechanism set up to enhance Indonesia’s diplomatic influence as a new emerging country. The study examines Indonesia’s ability and interests in setting up this aid program given that Indonesia is still a recipient of foreign aid itself. The paper points out the initiative serves economic, political, and ideological interests, potentially increasing Indonesia’s soft power on the global stage.
In the modern era of international relations, the use of hard power—such as military intervention, has become less prevalent due to the high costs and risks associated with it. Instead, countries have increasingly adopted liberal ideas in international relations that give a more prominent role to soft power. This includes using diplomatic efforts, cultural influence, and foreign aid, to accomplish their international objectives. Indonesia, known for its active and independent foreign policy, has adopted a similar approach. Although, Indonesia is still classified as developing country and continues to receive foreign aid, it has started its own foreign aid program, Indonesian AID, to increase its diplomatic influence.
Indonesian AID was formally launched on October 18, 2019, shortly before Indonesia’s successful election to the UN Human Rights Council for the 2020-2022 term. The program was inaugurated by former Vice President Jusuf Kalla, signaling Indonesia’s intent to be seen as a responsible global actor. This initiative is part of Indonesia’s broader strategy to intensify its soft power and contribute to global development goals, even as it navigates the challenges of being both an aid donor and recipient.
Indonesian AID targets small island nations and other developing countries that are strategically important to Indonesia. AID also serves as a diplomatic tool aiming to strengthen international development partnerships, strengthen South-South cooperation, achieve Sustainable Development Goals (SDGs), and keep world peace and prosperity. However, the provision of international aid is not entirely pure for aid reasoning, often focusing on Indonesia’s economic and political interests. For instance, donor countries often target market access and economic cooperation from the recipient countries. As a lower middle-income country, Indonesia has a responsibility to help other developing countries in aiding their development. Thus, the establishment of Indonesian AID looks like it is forced, considering Indonesia also has the status of being an aid recipient.
Literature Review:
The paper draws on several theoretical frameworks and existing studies to analyze the implications of Indonesian AID. It references literature on foreign aid, nation branding, and soft diplomacy to provide a comprehensive understanding of how Indonesia’s aid program fits into its broader foreign policy strategy.
The concept of foreign aid as a tool of diplomacy is well-established in international relations theory across countries. Countries often use aid to achieve strategic aims, such as securing alliances, promoting economic ties, or advancing ideological goals. According to Morgenthau, there are 6 types of foreign aid, namely (1) humanitarian foreign aid; (2) subsistence foreign aid; (3) military foreign aid; (4) bribery; (5) prestige foreign aid; and (6) foreign aid for economic development. All types of foreign aid are defined as the transfer of money, goods, and services from one nation to another. Except for humanitarian aid, all aid is political. In the case of Indonesia, foreign aid is used not only to assist other countries but also to enhance Indonesia’s reputation and influence on the global stage.
These days, nation branding has been widely recognized throughout the world, as nations often spend a considerable amount of state funds in the form of communication campaigns in several vital locations in the country, such as, international television channels, commercials, etc. Furthermore, nation branding strategically aims at promoting a positive national image for the country and its people, build a country’s brand identity, attract tourists, increase product exports, and to increase foreign direct investment. Also, by providing aid to other countries, Indonesia is not only contributing to their development but also promoting its own image as a responsible and benevolent global actor.
This helps Indonesian soft power, which is the capability to appeal other countries through persuasion rather than coercion. In the end of the Cold War era, soft power was coined by the Amerian political scientist Joseph Nye as an expression of an actor’s ability to get what is expected from the international environment by using cultural appeal or non-military attraction. Indonesia’s use of soft power diplomacy through Indonesian AID is part of its broader strategy to assert itself as a new emerging country that plays a significant role in global affairs.
Results and Discussions:
- Indonesia’s Interests Behind the Establishment of Indonesian AID:Sustainable development has become a global necessity, and Indonesia is committed to supporting the SDGs by establishing the Indonesian Agency for International Development (LDKPI) in 2019. LDKPI is responsible for managing funds from the state budget (APBN), which are given as grants to other countries and invested. The main goal of this agency is to promote global peace and support humanitarian missions.
LDKPI provides grants to countries that are classified as “least developed” or have urgent needs based on SDG indicators. For example, in 2022, a target of Rp 200 billion in grants was allocated to sectors in Africa, Asia, and the Pacific. These grants also serve as a tool of diplomacy to support Indonesia’s national interests globally, including helping state-owned enterprises (BUMN) expand into international markets and increasing the use of domestic goods and services.
The grants have included humanitarian aid such as health assistance to India, Zimbabwe, and Mozambique, and support for rebuilding technology facilities in Antigua and Barbuda. Additionally, Indonesia engages in international cooperation with agencies like the French Development Agency (AFD), focusing on climate change and renewable energy.
- Indonesia’s Capacity in Providing Foreign Aid:Indonesia has the capacity to be an important player in international politics by using soft power and diplomacy. The country is known for its strong democratic institutions, stable economic growth, and long history of supporting the independence of Asian and African nations.
Indonesia’s key assets include its large population, predominantly Muslim, who are moderate and tolerant, as well as its strong historical ties with African countries through the 1955 Asia-Africa Conference. Indonesia’s international reputation has grown stronger through successful hosting of major international forums, such as the G20 Summit in Bali in 2022.
By using soft power, Indonesia can influence other countries’ policies and strengthen its position on the global stage, including on sensitive issues like West Papua. Providing grants and participating in international cooperation are part of Indonesia’s strategy to support sustainable development and enhance its image as a country responsive to global challenges.
In conclusion, Indonesia’s interests through Indonesian AID can be categorized into three: economic interests, political interests, and ideological interests. Economic interests involve optimizing the use of Indonesian products and providers, while political interests aim to brand Indonesia as a responsive and serious country in sustainable development. For instance, Indonesian AID allows it to influence recipient countries’ policies on the Papua issue and as a democratic country with the largest Muslim majority in the world spread its version of democracy, Pancasila democracy,. As a lower middle-income country, Indonesia has a responsibility to help other developing countries succeed in their development. However, the mechanism of providing Indonesian grants to other countries through Indonesian AID is expected to decrease in the coming years, and Indonesia now bears the responsibility to increase development aid to other developing countries.