December 2024

Indonesia’s Quest for Influence: Bridging Indo-Pacific and Global South | COGGS|

|

Balaji Chandramohan

Being one of the foremost economic players in the Southeast Asia, Indonesia holds a significant role in the Global South and plays an increasingly significant part in the Indo-Pacific region’s geopolitics. Its strategic location, at the intersection of the Indian and Pacific Oceans, has positioned it as a key player not only in regional dynamics but also on the global stage.

Indonesia’s Geo-Strategic Importance

Indonesia occupies a vital geo-strategic location in the Indo-Pacific, connecting Asia to the Southern Hemisphere and controlling crucial maritime routes. The country straddles two significant regions—the Indian Ocean and the South-west Pacific—making it a central hub for global trade routes. The Strait of Malacca, one of the busiest and most important maritime passages in the world, runs through its territory, emphasizing Indonesia’s importance in maintaining regional stability.

24 Sea Ports on Indonesia.

Strategic Impact of Indonesia’s Location

Indonesia’s location enhances its geopolitical significance, as it governs key sea lanes vital for global shipping and energy transportation. This proximity to vital maritime chokepoints has prompted Indonesia to reframe its security strategy, focusing on maritime defense and becoming a key player in Indo-Pacific security.

Indonesia’s Evolving Maritime Strategy

In response to the evolving Indo-Pacific security landscape, Indonesia has shifted its defense focus toward maritime security. The country has unveiled a new maritime doctrine, signaling a departure from its previous inward-facing security approach.

Modernizing Indonesia’s Navy
As part of this shift, Indonesia has initiated a naval modernization plan to expand its capabilities and assert its presence in the Indo-Pacific. The plan includes the creation of a ‘green-water’ navy, with a target of 274 naval ships by 2024. This ambitious project is Indonesia’s most significant naval expansion in over four decades, aiming to enhance its maritime defense and regional influence.

Indonesia’s Growing Diplomatic and Strategic Influence
Indonesia’s maritime strategy is also supported by its growing diplomatic outreach. The country’s enhanced profile in the Indo-Pacific region has prompted it to broaden its diplomatic initiatives and strengthen ties with key players in the region and beyond.

Indonesia’s Role in the U.S. Indo-Pacific Strategy

Indonesia in IndoPacific. Courtesy: X https://x.com/marc_saxer/status/1764861807095926836

Indonesia is becoming increasingly important in the United States’ pivot to the Indo-Pacific, serving as a crucial partner in the region’s balance of power. The country is considered a “gateway” between Eurasia and Australia, regions with growing influence in the Global South.

Indonesia’s expanding diplomatic network and strategic importance reflect its ambition to become a major player in regional geopolitics, with a focus on strengthening relationships within the Global South.

Economic Growth and Maritime Reach


Indonesia’s economic trajectory has supported its growing geopolitical role. Following significant reforms during the presidency of Susilo Bambang Yudhoyono (2004-2009), Indonesia has experienced robust economic growth, driven by a rising domestic consumption and increasing commodity exports such as palm oil, copper, and rubber. These reforms have not only enhanced Indonesia’s economic standing but also facilitated its maritime expansion.

Economic Reforms and Strong Growth
Indonesia’s economic reforms—including improvements in tax systems, customs, and fiscal management—set the foundation for continued growth. This robust economic performance positions Indonesia as a rising power in the Indo-Pacific, capable of investing in strategic areas such as defense modernization and military expansion.

Indonesia’s Defense Modernization and Military Expansion
To ensure its continued strategic relevance, Indonesia has embarked on an ambitious plan to modernize its armed forces. As part of the 2010 Strategic Defence Plan, Indonesia aimed to develop a minimum essential force by 2024, enhancing both its navy and air force. Indonesia has finalized a $300 million agreement to acquire 12 ANKA drones from Turkey, with deliveries scheduled for late 2025. Furthermore, the Ministry of Defense has recently signed a contract with France’s Thales for the purchase of long-range military radar, a deal expected to include technology transfer and the enhancement of Indonesian personnel’s skills. However, Indonesia spends less than 1 percent of its GDP on defense, a stark contrast to Singapore, which allocates around 3 percent of its GDP despite being a smaller country.

Strengthening Indonesia’s Military Capabilities
Indonesia’s military modernization efforts include the development of a modernized navy, submarines, and combat aircraft. By increasing its defense budget and focusing on strategic areas, Indonesia is working to position itself as a major maritime power in the Indo-Pacific. These upgrades will allow Indonesia to project its influence and contribute to regional security.

Indonesia’s Future Role in Global Geopolitics
Looking ahead, Indonesia is poised to become an even more influential geo-political player in the 21st century. The country’s evolving maritime strategy and defense capabilities will solidify its position as a key partner in efforts to maintain regional stability in the Indo-Pacific.

Indonesia’s Role in the Global South

As a founding member of the Non-Aligned Movement, Indonesia’s growing maritime and economic influence provides it with a unique opportunity to strengthen its role in the Global South. The country’s evolving defense capabilities and strategic alliances will further cement its position as a crucial player in the geopolitics of the Indo-Pacific region and beyond.

In conclusion, Indonesia’s strategic outreach reflects its ambitions to solidify its position within the Global South. With a growing maritime capability, expanding economic influence, and evolving defense strategy, Indonesia is positioning itself as a key actor in the geopolitics of the Indo-Pacific region. As the country continues to modernize its military and strengthen its diplomatic efforts, it is poised to become a central force in shaping the future of the Indo-Pacific and contributing to global stability.

[ Balaji Chandramohan is a Chennai, India based geopolitical analyst and former visiting fellow with Future Directions International, Australia. The views expressed in this article do not reflect those of COGGS.]

Indonesia’s Quest for Influence: Bridging Indo-Pacific and Global South | COGGS| Read Post »

Trump’s 100 % Tariffs Threat on De-dollarization: What Means for Global South

|

In a X-post on December 1, US President-elect Donald Trump issued a stark warning that he would impose 100% tariffs on the BRICS nations—Brazil, Russia, India, China, and South Africa—should they attempt to establish a currency rivaling the U.S. dollar. Trump’s threat to use tariffs as a blunt instrument against economic shifts highlights his longstanding preference for trade protectionism as a tool for economic growth. Throughout his presidency, Trump advocated tariffs as a mechanism to bolster domestic industries, create jobs, and increase government revenue. However, the consequences of such measures, including increased costs for U.S. consumers, have raised questions about their long-term effectiveness. As BRICS nations seek alternatives to the U.S. dollar, the dynamics surrounding dollar dominance are evolving—an issue that warrants a more sophisticated approach than simply retaliatory tariffs.

In a panel discussion convened by COGGS, Ambassador Anil Trigunayat, advisor at COGGS, delivered a penetrating analysis of the currency dynamics redefining the global financial system, highlighting how ongoing international conflicts, notably the war in Ukraine, are driving shifts in global trade patterns and currency preferences, with particular implications for the Global South.

I. The Ripple Effects of Global Conflicts

The COGGS discussion begins with the broader context of international conflict, notably the war in Ukraine. This conflict has catalyzed a series of disruptive economic measures, including the expulsion of Russia from the SWIFT international payment system and the seizure of Russian assets by Western powers. Such actions underscore how global conflicts are increasingly shaping economy, particularly for nations that find themselves sidelined by Western economic sanctions. As countries like Russia, China, and others in the Global South are excluded from established financial networks, they are turning to alternative means of trade and finance.

One of the key consequences of these disruptions is the weaponization of commodities like energy, food, and fertilizer. This development  has disrupted global supply chains and intensified inflationary pressures worldwide. In response, nations are rethinking their reliance on the U.S. dollar, exploring alternatives such as bilateral trade agreements in local currencies. These changes, while incremental, signal a growing willingness to explore alternative financial systems that could reduce vulnerability to external pressures.

II. De-dollarization and the Rise of National Currencies

Central to COGGS’s discussion is the trend of de-dollarization—an ongoing shift away from the U.S. dollar as the dominant medium of global trade. Countries like India, Russia, and China have increasingly turned to their own national currencies in bilateral transactions, reducing reliance on the dollar. For example, India has signed trade agreements with over 20 countries, while Russia and China conduct the bulk of their $200 billion trade in their respective currencies, the ruble and the renminbi. These efforts are not an attempt to replace the dollar outright but to diversify the global financial system and reduce exposure to risks associated with U.S. monetary policy and sanctions.

This trend has accelerated in part due to a desire for greater economic autonomy, especially among nations in the Global South. By trading in their own currencies or using digital currencies, these countries are seeking to insulate themselves from the adverse effects of external economic policies. However, despite this growing momentum, the dollar remains entrenched as the primary global reserve currency, holding between 70-80% of global reserve assets. Any meaningful transition away from dollar dominance will be gradual and will require systemic adjustments on a global scale.

A dollar bill imprisoned in a decorative cage symbolizing financial confinement.

III. Challenges to the Dollar’s Dominance

Although the U.S. dollar remains dominant, the current financial architecture is showing signs of strain. The dollar’s position is not easily challenged, as it is deeply embedded in global trade, finance, and banking systems. The dollar’s dominance, however, is increasingly being questioned by countries that perceive it as a tool of U.S. geopolitical power. For many nations, the reliance on the dollar presents both economic and strategic risks—particularly in light of the volatility introduced by U.S. sanctions and the shifting global balance of power.

Nevertheless, the global shift away from the dollar will not happen overnight. These transitions are more about creating options rather than directly supplanting the dollar. While many Western media outlets frame these efforts as a direct challenge to U.S. hegemony, they are more a reflection of the changing priorities of the Global South, which is seeking greater flexibility and resilience in its trade and financial dealings.

IV. The Global South’s Position

For nations in the Global South, the motivation to reduce reliance on the U.S. dollar stems from a desire for greater economic sovereignty. Over-dependence on the dollar has made these countries vulnerable to the whims of U.S. monetary policy and economic sanctions, which can have disproportionate impacts on smaller economies. In this context, alternatives like national currencies or digital currencies offer a means of mitigating these vulnerabilities.

Global South is not necessarily seeking to isolate itself from the U.S. dollar. Rather, it is looking for a more diversified financial system that provides greater autonomy and reduces the risks associated with a single currency system. The U.S. should reconsider its reliance on punitive measures, such as tariffs, to preserve dollar dominance. Instead, the U.S. might benefit from engaging in a more collaborative dialogue with other nations about how to adapt to the evolving global economic landscape.

V. A New Currency Order?

The global economic system is in a period of flux, with shifting trade relationships and growing efforts to create alternative financial structures. In future, there will be an effective multipolar economic system – where multiple currencies and trade mechanisms will coexist. This shift, however, will be gradual and complex. The U.S. dollar, while no longer as unassailable as it once was, is unlikely to be completely displaced in the near future. Instead, the global financial system will likely evolve to incorporate a more diversified set of tools, where countries have greater freedom to choose their preferred methods of trade and finance.

 

 

The ongoing erosion of dollar dominance is a response not only to geopolitical conflicts but also to the inherent limitations of a financial system that disproportionately benefits certain nations. The transition towards a more diverse economic order will take time and negotiation.  But it’s clear that the world is moving toward a system where the U.S. dollar is no longer the sole arbiter of global finance. Trump’s threat to impose punitive tariffs on BRICS nations is emblematic of the U.S.’s protectionist stance, but it may miss the larger point: the global financial system is undergoing a transformation. As countries seek alternatives to the U.S. dollar, the U.S. must adapt to a changing world order. This process will be neither quick nor straightforward, but the outcome will undoubtedly reshape the global economic order in the years to come.

Trump’s 100 % Tariffs Threat on De-dollarization: What Means for Global South Read Post »

How Central Asia is Becoming a Key Player in Global South?

|

Balaji Chandramohan

Central Asia, situated at the crossroads of the Middle East and South Asia, was historically a key battleground in the Great Game between Asia and Europe throughout much of the 19th and 20th centuries. In the 21st century, it has gained significant geostrategic importance, particularly within the Global South.

In 2001, China, Russia, and four Central Asian countries formed the Shanghai Cooperation Organization (SCO) as a countermeasure to limit Western influence in the region. India and Pakistan joined the SCO in 2017, further expanding its significance.

The SCO has grown in relevance for both Russia and China as their relations with the West have deteriorated. Experts argue that the potential of the SCO cannot be underestimated, despite the existence of other prominent regional and multinational forums such as BRICS (Brazil, Russia, India, China, South Africa), the G20, and the G7.

 

Colorful pushpins marking locations on a detailed map of Central Asia.

Iran’s inclusion as a full member of the SCO will strengthen the organization’s energy portfolio but is likely to provoke anger in Western capitals. As the SCO becomes more aligned against Western-led forums, India may find it increasingly challenging to strike a diplomatic balance between its various global partners.

Nonetheless, India is confident in maintaining an independent foreign policy without aligning exclusively with any one group. How New Delhi manages its diplomacy—particularly its relations with Russia, China, and Pakistan—will influence the future trajectory of the SCO.

To begin with, Russia, India’s longstanding ally, seems supportive of India’s ambition to link South and Central Asia through Iran, bypassing Pakistan. India will also work with Iran to complete this project, which will foster closer economic ties between Central Asia, Moscow, and New Delhi.

This policy suggests that Moscow is prepared to support India’s ambitions in Central Asia, at least diplomatically (though not militarily). Russia’s soft power in Central Asia is increasingly seen as a valuable countermeasure against China’s expanding diplomatic and military influence in the region.

On the other hand, Central Asia is considered China’s western periphery, and Beijing has strategically developed oil and gas pipelines connecting to the region, including routes to Kazakhstan and the Turkmenistan-Uzbekistan-Kazakhstan-China gas pipeline.

Moscow is aware of China’s growing influence in the Central Asian republics, particularly through the SCO and bilateral agreements in the energy sector.

Furthermore, Afghanistan and Pakistan, both neighboring China and maintaining strong political ties with Beijing, are increasingly attuned to China’s role in mediating conflicts, such as between Saudi Arabia and Iran, as well as in the Ukraine crisis. Both nations have heightened expectations of China, and the trilateral meeting in Islamabad signaled their growing confidence in China’s diplomatic role.

Notably, Moscow and Beijing have increased their dealings with Kabul, short of formally recognizing the Taliban government, which has led to greater comfort in Central Asia toward aligning with the Global South.

Russia, Central Asian states, and China share a common perception of existential threats posed by terrorism and religious extremism, a longstanding concern of the US. This shared threat has fostered cooperation to prevent the US from establishing basing facilities in the region or allowing the Afghan Resistance (Panjshir) to use Central Asia as a sanctuary for further conflict.

Debating Central Asia’s credentials as part of the Global South offers significant academic value in at least two ways. First, it encourages scholars to revisit and rethink the region’s post-Cold War trajectory.

While Central Asia may be an uneasy fit for the Global South, it provides an appropriate framework to discuss the region’s historical and present-day significance. Viewing Central Asia as part of the Global South can shed new light on the nuances, richness, and conceptual limits of the Global South itself.

The region’s unique geographical position and its historical connections to the Silk Trade Routes have been crucial in shaping Central Asia’s geopolitical role, solidifying its place within the Global South.

These ancient routes, which connected the East and West, facilitated the exchange of people, goods, and ideas between Europe and the Far East, profoundly shaping the region’s cultural, economic, and political landscape, even when it was part of the Soviet Union.

The disintegration of the Soviet Union in 1991 led to the independence of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan—five Central Asian countries that have made significant strides in political transformation, modernization, and economic growth.

Russia-Ukraine Conflict and Central Asia

Central Asia has become increasingly significant in global geopolitics, especially due to the escalating Russia-Ukraine conflict. This conflict has attracted the attention of regional and global powers, all seeking to expand their influence in the region, thereby impacting Central Asia’s economic, political, and security dynamics.

The Russia-Ukraine crisis, which began in 2022, has had a profound effect on the economic and political landscape of Central Asian countries. For example, the energy sector has faced significant supply chain disruptions. Additionally, the economic sanctions imposed on Russia by Western countries have had a ripple effect, adversely impacting the economies of Central Asian nations that are heavily dependent on Russia.

The withdrawal of US forces from Afghanistan created a vacuum in terms of Western influence, which Western countries quickly sought to fill, often overlooking the concept of the Global South.

Conversely, the Russia-Ukraine conflict has reignited Western interest in the region. A key moment was the summit in September 2023, where all five Central Asian heads of state met with US President Biden for the first time. This was the first summit-level meeting between the US and Central Asia, symbolizing a renewed engagement.

Regarding India, the past decade has seen significant developments in its relationship with Central Asia. Prime Minister Narendra Modi’s visit to all five Central Asian countries in 2015 marked a milestone, reinforcing India’s commitment to the Global South.

India views a stable and integrated Central Asia as part of its “extended neighborhood,” crucial for both security and economic interests.

In January 2022, India hosted the inaugural India-Central Asia Summit, further solidifying political ties. Indian Foreign Minister Dr. S. Jaishankar framed this relationship around the “4Cs”—commerce, capacity building, connectivity, and contacts—each of which strengthens India’s engagement with the Global South.

Meanwhile, global geopolitical transformations have sparked renewed interest in the Global South. As the US struggles to maintain its superpower status, China’s expanding economic and political influence and Russia’s challenge to the international order through its invasion of Ukraine have elevated discussions on the Global South’s role in global affairs.

These tensions have sparked debates about the credibility of the Western order and the growing influence of emerging powers. The economic, financial, and industrial development patterns of the Global South raise questions about whether its elites will challenge the existing global capitalist order or seek to revise it by shifting their positions and influence within the system.

Though discussions on the world order and the role of the Global South have been ongoing for decades, China’s assertive ambitions and Russia’s actions in Ukraine have given rise to new narratives about the role of the Global South in geopolitics.

In Europe, Russian aggression has fostered unprecedented unity and highlighted the need to diversify strategic needs in areas such as energy, military, industry, and technology.

Moscow has expressed dissatisfaction over the lack of support from the Global South during the sanctions imposed on Russia. Many countries in the Global South have trust issues with the West and question the likelihood of receiving help from Western powers when needed. As a result, they advocate for neutrality and demonstrate “strategic autonomy.” This situation aligns with Russia’s global ambitions.

It is understood that the US is capitalizing on the geopolitical challenges posed by Russia’s aggression, using them to undermine the credibility of the Global South. By advocating for Russia’s weakening, the US aims to recalibrate its political strategy while strengthening relations with Global South allies.

In this context, the growing attention to the Asia-Pacific and Indo-Pacific regions, enhanced engagement with ASEAN countries, India’s push to position itself as the leader of the Global South, and the rise of the Indo-Pacific security agenda all emphasize the participation of the Global South. Similarly, countries in Latin America are gaining increased attention as key players in the Global South, with all major global powers—China, Russia, the EU, India, and the USA—intensifying their focus on this region.

In this environment, Central Asian countries are eager to strengthen their geopolitical position and align more closely with the growing influence of the Global South.

[ Balaji Chandramohan is a Chennai, India based geopolitical analyst and former visiting fellow with Future Directions International, Australia. The views expressed in this article do not reflect those of COGGS.]

How Central Asia is Becoming a Key Player in Global South? Read Post »

Scroll to Top