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Indonesia Index


President Suharto, accompanied by Minister of Foreign Affairs Ali Alatas (with glasses), meets Japanese prime minister Kaifu Toshiki during a May 1990 visit to the Merdeka Palace in Jakarta.
Courtesy Indonesian Department of Information

The quality of Indonesia-Japan relations in 1992 was best measured by statistics on trade, investment, and the flow of assistance. Japan was the destination of more than 50 percent of Indonesia's exports, the single largest foreign investor, and by far the most important donor of development assistance (see Foreign Aid, Trade, and Payments , ch. 3). In return, as the dominant foreign economic presence in Indonesia, Japan was subject to all the expectations and resentments attendant on that status. For example, Indonesia sought greater technology transfer as part of investment. The association of Japanese firms with politically well-connected Indonesians led to charges of exploitation. With their memories of World War II and the antiJapanese demonstrations during Tanaka Kakuei's 1974 visit, the Indonesian leadership was keenly sensitive to the possibility of a disruptive anti-Japanese backlash (see The Japanese Occupation, 1942-45; The State and Economic Development , ch. 1).

In the long term, the critical issue for Indonesia in the early 1990s was access to Japan's markets for manufactured goods and the debt owed to Japanese lenders. Yet, Indonesia shared the ASEAN-wide concern about the implications for Southeast Asia of Japanese remilitarization and was ambivalent about Japanese military participation in UN peacekeeping operations in Cambodia. From Tokyo's point of view, there was only indirect linkage between Japan's economic presence and the political relationship between the two countries, but Japan was aware of Indonesia's geostrategic straddling of the main commercial routes to the Middle East and Europe. Possibly, this concern explained why Japan seemed the least concerned of Indonesia's major economic partners about the human rights issue in general and East Timor in particular and explicitly rejected the linking of human rights with economic assistance.

Data as of November 1992

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