Two hundred and forty thousand dollars will build a school for 150 primary school kids in the tsunami-devastated city of Banda Aceh, Indonesia. When I visited in September, parents and teachers glowed with pride at their simple, clean new school, built with Australian aid money. Girls and boys have separate toilets for the first time.
After listening to the principal, who has gathered together the 40 survivors of his previous school, some of whom lost all their families in the tsunami, it’s hard not to squirm at the talking heads of tabloid television who swagger into Indonesia looking for “cannibals” to prove that the Indonesians are barbarians.
Indonesia has changed a lot over the past decade. Once a corrupt military dictatorship, it is now on the way to becoming a healthy democracy. Many Australians don’t seem to have absorbed this fact, as shown by pathetic stereotypes about Indonesian judges being monkeys, (a claim made by a Sydney shock-jock when “our Schappelle” was first jailed) or agit-prop by professional anti-Indonesian academics who tilt at straw men such as the “born again Jakarta lobby”.
Australian opinion has barely registered the important survey by the Jakarta-based Indonesia Survey Institute, which showed that only 11 per cent of Indonesians thought that the country should adopt an “Islamic form of government”. The great majority supported Indonesia’s moderate official ideology, Pancasila.
Institute Director Denny J.A. told the Jakarta Post: “This corroborates the old belief that Muslims here are mostly moderate.” Another more recent poll showed that only 9 per cent of Indonesians would vote for an Islamist party, a big drop from a few years ago. Over 80 per cent of Indonesians said they supported democracy.
It can’t be denied, however, that there are still difficulties in the Australia-Indonesia relationship. There are forces on both sides trying to whip up hostility for their own political reasons.
In Indonesia, the minority of radical Islamists see Australia as a source of western and liberal ideas, which undermine their own efforts to subvert and supplant Indonesian Islam, which is traditionally tolerant and pluralistic, with imported Salafist or Wahhabist ideologies.
Unfortunately, these negative trends in Indonesia, unrepresentative though they are, do influence opinion in Australia. The Lowy poll suggested that many Australians continue to be hostile to Indonesia. There are several obvious reasons for this. The behaviour of the Indonesian Army in East Timor is still remembered, even though those events took place under the old regime.
Improving Indonesia-Australia relations requires patience and persistence on both sides. While we cannot compromise on basic principles such as support for East Timor’s independence or opposition to the death penalty, we should be aware of Indonesian sensitivities, just as Indonesians need to be aware of ours.
The two most difficult current issues are Papua and the death penalty. It is true that violations of human rights are still taking place in Papua, but I do not believe that the solution to this problem lies in support for Papuan separatism. Indonesia is now a country in which the rule of law and respect for human rights are being established, albeit imperfectly. If Australia is to take a position on Papua, it should be one of support for a special autonomous status for Papua within Indonesia, similar to the status recently agreed on for Aceh.
The death penalty is also a difficult issue in Australia-Indonesia relations. It is no good Australians accepting, or even applauding, the execution of convicted terrorists such as the Bali bomber Amrozi, and then loudly protesting when it is applied to convicted Australian drug-runners such as the Bali Nine. Indonesians can respect a consistent opposition to the death penalty in all cases, but they won’t respect double standards. If we want to argue for the Bali Nine to be spared then we can hardly applaud the execution of the Bali bombers.
Susilo Bambang Yudhoyono’s reforming presidency remains popular and its policy progress creditable. But, as the well-informed analyst Jusuf Wanandi argues, the peaceful resolution in Aceh and the reduction in the fuel subsidy have to be balanced against a “rainbow cabinet” that accommodates too many incompetent ministers, because of the president’s desire to include so many parties in his government.
Jakarta faces real problems. Forty million Indonesians live below the poverty line ($US1 a day), and around 12 million are unemployed. President Yudhoyono's major concern is the economy. Current 
economic growth, at 5.2 per cent, is less than is necessary to absorb new entrants into the workforce.
As Jusuf Wanandi says, the onus is on President Yudhoyono to provide the leadership to help the country overcome these and other problems. With the next presidential election due in 2009, he still has time to do so.
A close political and now revived military relationship with Indonesia is essential for Australia’s security. Maintaining a close relationship between a large, poor, Muslim, developing country and a small, rich, western country will never be easy, but now that Indonesia is a democracy, under a reforming president who is friendly to Australia and eager to improve the relationship, the task is much easier. But it will always require tact and restraint on both sides.