1,000 Friends Are Too Few, One Enemy Is Too Many: Indonesia’s
Non-Alignment Strategy
By Georgia Kruger
As global competition over critical raw minerals (CRMs) accelerates, supply chains are becoming instruments of geopolitical power. The EU is consequently shifting its attention to Indonesia, the world’s largest nickel producer. After a decade of negotiations, the two parties concluded the landmark EU-Indonesia Comprehensive Economic Partnership Agreement (CEPA) in September 2025. Once ratified, the deal will eliminate almost all bilateral tariffs. However, the newfound partnership is already facing a stress test.
While Brussels views CEPA as a tool for strengthening energy resilience, Jakarta’s motivations for reaching a deal are more complex. Just three months after the pact was finalized, Indonesia signed a free trade agreement with the Russia-led Eurasian Economic Union (EAEU). The move, reflecting Indonesia’s “bebas dan aktif” (free and active) policy, puts the EU in a position where it must once again balance security interests with normative credibility.
An Essential Relationship
Southeast Asia’s growing relevance stems from the role of CRMs in Europe’s green transition. Crucial for renewable technologies such as wind turbines and batteries, CRMs are central to reducing structural energy dependencies and accelerating decarbonization. For the EU to meet its target of using 42.5% renewable energy by 2030, the bloc requires roughly 390,000 tons of CRMs annually. Since over 90% of EU CRM imports currently come from China, Brussels’ efforts to diversify its sources represent a security-relevant opportunity and a strategic necessity.
The deal between the EU and Indonesia, reached after 19 rounds of negotiations, includes concessions on previously contentious goods such as palm oil and eliminates trade barriers on raw materials. These compromises reflect Brussels’ growing willingness to balance regulatory standards with broader geopolitical and economic considerations.
However, the EU’s newfound pragmatism has its limits, and Indonesia’s long-standing ties with Russia seem to be testing them. While Brussels needs to cultivate new relationships to navigate an increasingly volatile geopolitical landscape, the war in Ukraine necessitates choosing partners that are not closely aligned with Russia.
Unfortunately, Jakarta has been dallying with Moscow. Soon after taking office in late 2024, Indonesian President Prabowo Subianto announced that his country would be joining the BRICS, a move welcomed by Russian Foreign Minister Sergey Lavrov. There are other signs that the two countries are growing closer. During Prabowo's visit in December 2025, Putin offered Indonesia help with building nuclear power plants. Notably, Russia operates the world’s first floating nuclear power station: the Akademik Lomonosov, a technology especially valuable for the archipelago.
Europe’s quandary is only becoming more visible. In February, Brussels included the Indonesian port of Karimun in its 20th sanctions package against Russia. The port first made its way into international headlines in May 2025, when Kyiv’s Foreign Intelligence Service found it to be Russia's most important energy transshipment hub in the first half of that year. While the EU struggled to reach agreement on the package, this case raises doubts about the bloc’s ability to balance its doctrinal foreign policy with its diversification strategy.
A Strategic Hedge
Jakarta’s relationship with Russia may be difficult for the EU to digest, but it can be viewed less as an endorsement of Kremlin policies and more as a continuation of a multi-alignment strategy. By joining the BRICS, Indonesia followed in the footsteps of other southeast Asian states that use international organizations to hedge their bets in times of great-power competition. Indonesia is also pursuing membership in the Organization for Economic Co-operation and Development, another calculated step to diversify institutional dependencies.
Similarly, Jakarta is not automatically aligning with Moscow on security issues. Last year, Indonesia reportedly rejected a Kremlin request to base long-range aircraft in Papua. Instead, Indonesia is working to diversify its security portfolio and safeguard its strategic autonomy. The country recently received the first three of 42 French Rafale fighter jets. Prabowo’s outreach to Moscow appears less ideological than a bargaining tool within a broader strategy of strategic autonomy.
A Path Forward
The EU's pragmatism may have its limits, but the bloc is unlikely to distance itself from a strategically important partner like Indonesia. Given its own goal of ending purchases of Russian energy by 2027, risking diplomatic fallout over a transshipment hub would be ill-advised, especially since the EU was the 4th largest importer of Russian fossil fuels in 2025. Moreover, several member states continue to rely on strategic exemptions for Russian pipeline oil.
The EU's priority, therefore, must be to eliminate its own direct dependencies. Once European energy and industrial sectors are fully insulated, a more rigorous examination of partners' ties to Moscow becomes far more credible. The key to successful engagement is not to undermine relations through doctrinal rigidity, but to outcompete Russia. In doing so, the EU can facilitate a natural alignment toward the West while securing its supply chains and credibility.
Want to learn more about Indonesia? Watch our documentary Nickel Land: Indonesia's Critical Mineral, available on our website or YouTube
The views represented in this article are those of the author and do not necessarily reflect the views of the Bertelsmann Foundation.