Indonesia is often presented as one of Australia's most important neighbours and strategic allies, with formal diplomatic relations between the two nations marking a 70-year milestone last month.

Key points: West Papua continues to be a contentious issue between the two nations

West Papua continues to be a contentious issue between the two nations An announcement to move the Australian embassy to Jerusalem strained ties

An announcement to move the Australian embassy to Jerusalem strained ties A landmark free-trade agreement was signed in 2019 but needs to be ratified in Indonesia



"Not just close neighbours — but great friends," Scott Morrison said during his first international visit as Prime Minister in 2018.

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Gary Quinlan, Australia's Ambassador to Indonesia, recently told the Jakarta Foreign Correspondents Club the deep ties between the nations dated back to 1945, when Australia became the "strongest supporter" of Indonesian independence and was the first country to send a diplomatic mission to establish the basis for recognition of the Republic.

"No country in South-East Asia is more important to Australia than Indonesia," Mr Quinlan told the forum.

"And only a handful of countries globally match that importance."

Indonesia's first president Sukarno also chose Australia to represent his nation in the United Nations negotiations in the lead-up to its independence on December 27 1949.

However, the differences between their histories, cultures and economies almost ensures their relationship will be "fraught with the dangers of misunderstandings", according to former Australian prime minister Paul Keating.

Indeed, the relationship has undergone various ups and downs due to disagreements around key issues — like capital punishment in the case of the Bali Nine or people smuggling — and veered onto different paths or been derailed altogether as a result.

Here's a look at the key issues and moments that have strengthened and shaken the relationship in recent times and where it might be heading in the years to come.

Elections, spills and the contradictions in between

Indonesia and Australia's relationship has had various ups and downs due to disagreements around key issues. ( Supplied: Australia Indonesia Centre )

To signal the importance of Indonesia in Australia's foreign policy, in August 2018 Australia's new leader Scott Morrison followed in the steps of his predecessors by immediately travelling to Indonesia for his first overseas trip.

"By making my first overseas visit as Prime Minister to Indonesia, I want to make a clear statement about the importance of our relationship," Mr Morrison said.

Mr Morrison travelled to Indonesia just weeks after becoming Prime Minister. ( ABC News: Jed Cooper )

Former prime minister Malcolm Turnbull had formed a strong relationship with Indonesian President Joko Widodo over the years, and his ousting from Australian politics caused concern that a landmark free-trade agreement nine years in the making could be jeopardised.

"Australia and Indonesia share geography, deep historical ties, a vibrant contemporary relationship and a vision of a peaceful and prosperous region," Mr Morrison said.

"Our close collaboration across economic, security and strategic domains makes both countries stronger, safer and more prosperous."

But just weeks after returning to Canberra, Mr Morrison proposed moving the Australian embassy in Israel from Tel Aviv to Jerusalem, following on the heels of US President Donald Trump. Those moves sparked outrage in a number of Muslim-majority nations, especially Indonesia.

Indonesia does not have formal diplomatic ties with Israel, and just months before Mr Morrison's announcement, both Israel and Indonesia temporarily banned their respective citizens from visiting the other country, a move believed to be related to clashes over Mr Trump's embassy move.

The move by Mr Morrison immediately placed a strain on the relationship and forced the temporary closure of Australian embassies in Indonesia due to protests — it also became a hot campaign topic in both Indonesia and Australia ahead of national elections in April and May 2019 respectively.

The 2019 elections was a re-rerun of the 2014 contest with Mr Widodo, left, and Mr Prabowo, right. ( AP, file )

"[Joko Widodo] expressed to me, as he has done to Prime Minister Morrison, the very serious concern held in Indonesia about the prospect of the Australian embassy in Israel being moved from Tel Aviv to Jerusalem," Mr Turnbull said at the time.

"There is no question were that move to occur it would be met with a very negative reaction in Indonesia.

"This is, after all, the largest Muslim-majority country in the world. We have to be very clear-eyed about that, and we have to take into account Australia's national interests, and our interests in the region, when we consider a decision like this."

Mr Morrison later shelved the embassy move plan, and in March 2019 the agreement was quietly signed — but its ratification would be put on hold as the two nations went to the polls.

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The Indonesian elections were particularly fraught, with foreign policy counterparts in Australia anxiously waiting to see whether Mr Widodo would be voted in for a second term, or if General Prabowo Subianto, who was highly critical of Mr Morrison's suggested embassy move, would sweep to power.

Mr Widodo, who enlisted a hardline Muslim cleric to be his Vice-President, ultimately won with 55 per cent of the vote.

His re-election was met with quiet relief in Canberra as it meant a continuation of foreign policy plans, in contrast to Mr Prabowo's campaign of being openly hostile to trade.

"The respective election outcomes mean both governments that need to ratify the deal are the ones that negotiated it and the deal is much more likely to enter into force quickly," Heath Baker, acting CEO of Export Council of Australia, said.

Free trade not a panacea for strained relations

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 1 minute 8 seconds 1 m 8 s Is Australia prepared for a wealthy and powerful Indonesia?

Indonesia is the world's 16th largest economy, but trade between Australia and Indonesia lags and neither country is in the other's top 10 trading partners.

While geographic proximity does not always equate to closer economic relations, the signing of the free trade agreement in March 2019 signalled a step forward — however, Mr Morrison and Mr Widodo were both absent from the ceremony.

Heads of state are generally not required to attend the signing of trade agreements, but the absence stood in stark contrast to the fanfare of the bilateral trade deals between Australia and South Korea, China and Japan.

"There is plenty of room to deepen our trade and investment ties as the two countries with the largest economies in the region," Foreign Minister Marise Payne said at the time in attempt to quell concerns.

Nonetheless, it was ratified in Australia in December 2019, however in Indonesia, it is still awaiting parliamentary approval despite expectations it would be ratified before 2020.

Dubbed the Indonesia-Australia Comprehensive Economic Partnership Agreement, the trade deal would reduce tariffs on nearly all import goods and relax foreign ownership laws in Indonesia. It would also establish education institutions and include an increase in work visas for Indonesians coming to Australia.

Australian farmers have long wanted expanded access to the Asian market, especially as Australia and China's relationship has become strained in recent months. But they have no illusions about a trade agreement being a fix-all solution to the relationship.

"It's not just a point of establishing the market, but it's about what happens afterwards," National Farmers' Federation president Fiona Simson said.

"It is about relationships, it is about networks, it is about putting our key people in there."

Meanwhile, former Australian shadow minister for trade and investment Jason Clare said trade with Indonesia was "massively underdone".

"Australia and Indonesia are like neighbours who barely look over the fence," he said.

"We don't talk with each other, or work with each other anywhere near enough as we should.

"If this agreement can help to change that, can increase trade … then that's a good thing."

West Papua, Timor-Leste and a history of regional distrust

The Indonesian provinces of West Papua and Papua, are often referred to collectively as West Papua. ( ABC News: Jarrod Fankhauser )

In 1995, an Australian parliamentary paper noted that a pivotal security agreement between the two nations demonstrated Australia's progress in "developing one of [our] most important but most difficult bilateral relationships".

"[It] is not simply about external threats, it is about the whole environment of the region — it is about the foreign policy and trade policies of the countries," former prime minister Paul Keating said while championing Indonesia as a key area of foreign policy.

"Australia and Indonesia have a coincidence of views and interests in the strategic outlook of the region."

Paul Keating described the 1995 security agreement as a key area of Australian foreign policy. ( AAP, file )

But with Mr Keating's election defeat just months later, followed by the Asian financial crisis, the overthrow of former Indonesian president General Suharto, the Timor-Leste crisis, and a shifted focus on China's growing influence, the relationship was destined to stay on shaky ground.

For example, Australia's controversial involvement in the 1999 Timor-Leste crisis has remained a marker of distrust between Indonesia and Australia, and subsequent issues surrounding West Papuan independence are no different, according to Australian academic Richard Chauvel.

In August, this year thousands of protesters took to the streets and burnt down government buildings during deadly clashes across Indonesia's provinces of Papua and West Papua.

Deadly clashes erupted in the Indonesian region of West Papua last year. ( AP: Beawiharta, file )

Jakarta remains firm in its stance that the region has been part of a unified Indonesia since a United Nations-backed referendum, and that any unrest is a domestic issue.

Despite parallels being drawn between the Papuan demands for independence and the Timor-Leste conflict, Australia has remained notably silent on the former, with Ms Payne simply telling reporters that all sides of the conflict should exercise "absolute restraint".

Australia's reserved stance can be traced back to the Lombok Treaty signed in 2006, a year after 43 West Papuans arrived in Australia seeking asylum and were granted protection visas.

The agreement stipulated that both nations will not interfere in internal affairs, as well as respect each other's sovereignty and not support "separatist" actions.

In recent years, many Indonesians have been angered by Australian media's coverage of West Papua, calling much of the reporting "one-sided", especially for providing a platform for human rights lawyer Veronica Koman, who was charged in Indonesia for being a "provocateur".

A decision by a Sydney local council to raise the West Papuan Morning Star flag last year also caused controversy with the Indonesian Consulate-General in Sydney, who said the move could be "misrepresented to represent support from the Australian Government".

Resilience of the relationship to be tested 'in new era'

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 3 minutes 10 seconds 3 m 10 s Widespread anti-government protests broke out in Indonesia in 1998 that led to the fall of President Suharto.

In a speech late last year, Australia's Ambassador to Indonesia Gary Quinlan maintained that despite the differences over the years Indonesia and Australia have maintained good relations in many areas.

"We are the closest partners on counter-terrorism and are very strong on law enforcement, defence, maritime cooperation, border management, transport, aviation, agriculture and education," he said.

"All the things that close neighbours need to do, we are doing with each other".

But Mr Quinlan said both countries "are [now] at a strategic turning point in [their] relations."

"The resilience of both countries is being challenged and each of us has made a very deliberate choice to embrace the other more closely in this new era," he said.

"We no longer spend much time talking to each other about ourselves — our bilateral challenges — but are increasingly talking to each other about everyone else and what we can do together to create a more resilient region.

"To do that, of course, our own relationship itself must be resilient."

The Australian Embassy in Jakarta is Australia's largest overseas diplomatic mission. ( ABC News: Samantha Hawley, file )

The Australian Embassy in Jakarta remains the nation's largest overseas diplomatic mission, costing close to half a billion dollars to build and employing more than 500 staff, including 150 Australian diplomats.

Despite Indonesia's historic importance to Australia, a recent Lowy Institute survey found the Australian public has a lack of knowledge of the country's largest neighbour.

The same poll also found only 1 per cent of Australians view Indonesia as "Australia's best friend in the world".

Managing the relationship may not have been easy for both nations, but common interests in trade, investment and regional security have helped maintain strong ties.

Mr Quinlan says while the two nations are likely to continue to have hiccups in relations, bilateral agreements are currently strong and moving in the right direction.

Kristiarto Legowo, Indonesia's ambassador to Australia, also reiterated the importance of the relationship during 70-year celebrations between the nations at the Indonesian Embassy in Canberra last September.

"Indonesia and Australia choose to be friends with each other, and it is a friend in need and friend indeed … friendship in [a] two-way street, not a one-way road," Mr Legowo said.

Mr Legowo also underlined the importance of Indonesia and Australia's joint efforts to face the challenges ahead by quoting an Indonesian proverb, "Berat sama dipikul, ringan sama dijinjing", or in English, "Many hands make the workload lighter."

Read the story in Bahasa Indonesian here.