Indonesia shapes Australia’s regional dreams and darkens its strategic nightmares.

The only constant of the Indonesia effect is the constant shape-shifting of a roller-coaster relationship.

A vivid version of the wild ride is the period 1999 to 2002: Indonesia and Australia went to the military brink in East Timor, wrangled over people smuggling, shared the horror of a terrorist attack, achieved unprecedented police cooperation, and established a new regional process that’s still going.

The release of the 2002 cabinet records by the National Archives of Australia marks a shape-shifting moment. In 2002, the focus swung to terrorism and people smuggling after the bloody drama of East Timor’s independence vote in 1999.

In ASPI’s podcast series on the evolution of the Australia–Indonesia strategic partnership, a former Indonesian presidential adviser, Dewi Fortuna Anwar, recalled that Jakarta was ‘upset and angry’ at Australia’s role in Timor and that, for a time, ‘Australia was actually seen as a threat’.

For Canberra, the Timor outcome was unbidden and unintended. When Prime Minister John Howard wrote to Indonesia’s President B.J. Habibie in 1998 urging an ‘act of self-determination’, he emphasised that ‘Australia’s support for Indonesia’s sovereignty is unchanged’. Lots changed quickly after that.

Canberra was anxious and amazed at the role it had to play in Timor—proud at how it turned out, but mightily relieved it became a successful international mission and not war with Indonesia.

Australia realised it had given a ‘bilateral security guarantee’ to a new nation that would forever share a land border with Indonesia.

Pondering the drawdown of Australia’s military in East Timor in October 2002, the National Security Committee of cabinet fretted that if the proportion of Australians in the UN peacekeeping force grew too significant, it would ‘risk becoming an irritant in the development of a new Australia–Indonesia relationship’ and ‘promote an attitude in East Timor that Australia is willing to underwrite East Timorese security’. By 2002, the Timor security guarantee was the reality, whatever the risk.

Two events in Bali are the 2002 landmarks of the post-Timor era: the Bali ministerial conference in February on people smuggling, and in October the Kuta terrorist bombings that killed 202 people, including 88 Australians.

The Bali conference transformed the terms of the Jakarta–Canberra fight over Indonesian people smugglers dispatching ‘boat people’ to Australia. In 2001, the boat-people stoush saw Indonesia’s foreign minister attack Howard’s government for ‘megaphone diplomacy’ and Indonesia’s president refuse to take a phone call from Howard.

The Bali meeting co-chaired by Australia and Indonesia created the Bali Process on People Smuggling, Trafficking in Persons and Related Transnational Crime. The process has had seven ministerial meetings over two decades (still chaired by Australia and Indonesia); its website (funded by Australia, Japan and New Zealand) proclaims its purpose as ‘policy dialogue, information sharing and practical cooperation’.

Instead of doing bipolar bilateral battle over people trafficking, Australia and Indonesia stood together in a larger regional effort. The diplomacy started desperate but ended deft.

By the end of 2002, Australia was preparing to co-host a second conference in the Bali Process in 2003. A cabinet minute in November 2002 noted the success ‘in galvanising regional attention’, the ‘framework setting out longer term strategy’ and ‘the wider benefits of closer engagement with Indonesia’.

Covering that Bali ministerial in Nusa Dua in February 2002, one of my reporting asides had been that this was the natural place for Australia and Indonesia to come together. Bali, after all, was where Australians felt most welcome. I thought of that line when the bombs exploded in Kuta.

Amid tragedy, a change in the Indonesia–Australia relationship became even clearer. Australia embraced Indonesia as a fellow democracy, sharing the grief and sharing the fight against the extremists.

Under the Suharto regime, Indonesia’s response to the bombings would have been to draw the secrecy curtain, to crack down and shut out. The Bali bombings marked the moment when Australia’s security relationship with Indonesia broadened from military to police, and moved from stand-off to cooperation.

In October 1999, Australian and Indonesian forces exchanged fire across the border between East and West Timor, and one Indonesian officer was killed. Jakarta had torn up its security treaty with Canberra over the Australian-led intervention, and military conflict was a possibility. Almost exactly three years later, the Bali bombings changed the security dynamic.

Forensic work by Australian police at a Bali bombsite identified the registration of the truck that carried the explosives. Australian police worked beside Indonesian police in every step that followed, leading to the capture and conviction of the Bali bombers.

The Australian Defence Force had ownership of any security connection with Indonesia during the decades of Suharto’s rule. The moral peril of Suharto’s regime had been dealing with an Indonesian army that functioned as both mafia and military. In the new democratic Indonesia, the frontline role could be held by the Australian Federal Police, partnering with an Indonesian police force that was no longer part of the military.

A 2014 ASPI study based on interviews with 60 Australian and Indonesian police described a valued ‘relationship based on trust, mutual benefit and shared concern for fighting crime’, able to withstand ‘most of the fluctuations in the broader bilateral relationship’.

The partnership became a target for the extremists when they exploded a one-tonne car bomb outside Australia’s Jakarta embassy in 2004, killing nine people and injuring 160. The damaged embassy coat of arms is now at the National Museum of Australia.

The potency of the history is shown by what Canberra still keeps secret. In the release of the 2002 cabinet archives, only eight documents were ‘wholly exempt from public access because their disclosure would damage Australia’s security, defence or international relations’. Two of these were a cabinet submission and decision on ‘The Australia–Indonesia defence relationship—next steps’ and a decision on a ‘Review of counter-terrorism cooperation between Australia and Indonesia’.

The dramatic history of Australia–Indonesia relations is of two vastly different neighbours compelled to find a destiny together—how little the two have in common, how much they must share.