As global governance enters a period of ‘rupture’, the traditional architecture of power is being rewritten. Marked by profound fragmentation, the US attacks on Venezuela and Iran have led to a chaotic multipolar structure. This shift is shaping a new international architecture based on power. Traditional multilateral frameworks are increasingly being sidelined in favour of minilateralism: ad hoc coalitions of the willing which prioritise functional efficiency over universal consensus. States prioritise national interests which are oriented to establishing national resilience. Middle powers like Indonesia are in a strategic bind, balancing neutrality with pragmatically assertive participation in the international arena.
In 2026, Indonesia stands at a historical crossroads; characterised by “independent and active” foreign policy, this country has been moving from passive non-alignment to an active alignment. Indonesia has undergone a significant economic transformation, propelled by its status as the preeminent economy in ASEAN and its emergence as the world’s 16th largest economy. Defined by aggressive modernisation, proactive diplomacy, and diversification of strategic alignments, Indonesia’s defence posture is becoming increasingly central to the global security framework, yet it remains paradoxical. The country’s current trajectory raises a critical question: Is Indonesia merely a middle power in terms of navigating the divisions of a new world order marked by great power competition, or has it assumed the central role in an undisputed regional order?
By combining development pragmatism, hedging strategies, and selective integration into global production chains and technology ecosystems, Indonesia’s economic journey demonstrates how emerging middle powers manage globalisation, positioning it as a key player in shaping the evolving political and economic structure of the Indo-Pacific. This condition, coupled with a large demographic footprint, with a total population of over 283 million people and a continuously growing GDP, makes Indonesia an attractive global market for competing technology investments from major powers, particularly the United States and China.
Since 2025, particularly after the first year of President Prabowo’s administration, Indonesia has faced domestic economic dissatisfaction fuelled by global uncertainty. In the international relations environment, this is characterised by global factors such as Trump’s tariffs, humanitarian conflict in the Middle East, and uncertainty in the multilateral order—followed, in February 2026, by the shutdown of the Hormuz Strait, which ushered in a global economic crisis driven by unstable world oil prices. This situation adversely impacted the Indonesian economy. Rather than achieving its 8% economic growth target, Indonesia must critically evaluate its current position within the broader global macroeconomic landscape. Domestically, public demands remain a concern since the outbreak of protests in August 2025, driven by the high cost of living, limited job opportunities, and unequal privileges granted to the elite. Indonesia is striving to achieve greater competitiveness in order to survive in global conditions while attending to its domestic conditions.
Under President Prabowo’s administration, Indonesia’s foreign policy has reflected a shift toward pragmatic economic diplomacy, yet it remains in a relatively strong bargaining position. This strategic leverage of the evidence to deepen trade cooperation, such as the Regional Comprehensive Economic Partnership (CEP) and the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA). Furthermore, Indonesia’s pursuits of membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the OECD serve as pivotal institutional frameworks designed to anchor and accelerate domestic economic reforms. However, in order to mitigate the impact of the contemporary oil crisis on ASEAN countries, President Prabowo has engaged in strategic diversification by securing critical energy cooperation with non-Western countries like Russia. President Prabowo worked to implement this during his official state visit to President Putin in April 2026.
To secure its strategic autonomy, Indonesia has adopted an approach to defence anchored in diversification. This has been complemented by an ambitious military modernisation initiative, underscored by a presidential directive detailing a $125 billion investment plan that extends through the mid-2040s. Indonesia and the US added momentum in April 2026 when they formalised the Major Defence Cooperation Partnership, which was set up to enhance regional interoperability security, modernisation, and. Jakarta’s diversification approach is reflected in other deals, the J-10 arrangement with Beijing, the Rafale contract with France, and agreement to purchase 48 KAAN Fighter Jets from Turkey. This defence partnership, announced alongside enhanced ties, highlights Jakarta’s “free-and-go” policy in order to focus on security diversification rather than formal alignment.
Indonesia’s trajectory as a middle power reflects an upward trend; however, its capacity to exert decisive influence within global governance structures remains constrained. Indonesia has diversified its strategic options beyond traditional Western partners by expanding cooperation with non-Western actors, including Eurasian states, while simultaneously maintaining engagement with the European Union. This reflects a broader pattern of multi-engagement diplomacy, which offers an emerging strategic approach for Indonesia that may be described as “active alignment”. Nevertheless, significant challenges remain Indonesia’s capacity to consolidate its influence as a middle power within an increasingly diversified international order. Indonesia’s diplomatic role is predicted to be more effectively institutionalised through minilateral rather than multilateral platforms. Moreover, despite its historical legacy rooted in the Asian–African Conference (AAC), Indonesia has yet to fully demonstrate the required capability to act consistently as a bridge-builder between the Global South and the Global North.
Indonesia is widely recognised as a regional leader. Its diplomatic influence was instrumental in securing Timor-Leste’s accession to ASEAN—after prolonged negotiations within the ASEAN countries. Indonesia reflects its ties with non-Western countries, while simultaneously consolidating its leadership role within ASEAN. Consequently, major powers consider Indonesia an important strategic partner due to its recognised regional standing. Such recognition has not yet translated into a substantial role as a middle power at the global level. This limitation can be illustrated by President Prabowo Subianto’s unsuccessful attempt to position Indonesia as a mediator in the US–Iran conflict. In this context, Indonesia has demonstrated greater effectiveness as a regional mediator, as evidenced by its involvement in facilitating the resolution of the Cambodian conflict in 2010. Nevertheless, Indonesia continues to face challenges in extending this mediatory capacity to resolving broader international conflicts.
Determining Indonesia’s political status in the international system remains complex, but its trajectory suggests that Indonesia has sought to emerge from the “grey area”—from uncertainty to risk—escaping the trap of trading regional recognition for international concessions. Indonesia has increasingly demonstrated the characteristics of a middle power through its economic diversification, strategic partnerships, and leadership within ASEAN, although its global influence remains limited and transitional. Indonesia has increasingly demonstrated the characteristics of a middle power through its economic diversification, strategic partnerships, and leadership within ASEAN, although its global influence remains limited and transitional.
To mitigate the risks associated with a more assertive international role, Indonesia must reinforce its ASEAN centrality while expanding minilateral cooperation with other middle powers. Consequently, Indonesia needs to reformulate and modernise its “independent and active” foreign policy doctrine by adopting a strategy of “active alignment” and a “positive-diversification strategy”, enabling it to contribute more effectively to global governance and strengthen its position within the evolving international order. Thus, a new framework of middle powers can enact global governance by enabling countries to play a significant role in shaping global architecture.
The Valdai Discussion Club was established in 2004. It is named after Lake Valdai, which is located close to Veliky Novgorod, where the Club’s first meeting took place.
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