Former Australian Prime Minister Paul Keating has been appointed as a strategic adviser on East Asia to Indonesian President Prabowo Subianto. He will also join the advisory board of Indonesia’s sovereign wealth fund, known as Danantara. This significant role was confirmed to Keating through a personal letter delivered by Indonesia’s Foreign Minister Sugiono during his visit to Australia earlier this year.
Keating, who acknowledged the invitation, chose not to provide further details. Danantara, which was launched in February 2024, manages an impressive USD 900 billion (approximately USD 1.37 trillion) in assets, including several state-owned enterprises. The fund is a crucial part of Prabowo’s strategy to elevate Indonesia’s economic growth from 5 percent to 8 percent annually by 2029.
Advisory Board Composition and Future Plans
The advisory board that Keating will join is chaired by billionaire US hedge-fund manager Ray Dalio and includes notable members such as former Thai Prime Minister Thaksin Shinawatra, former Credit Suisse Asia Pacific CEO Helman Sitohang, and renowned economics professor Jeffrey Sachs from Columbia University. It is common for former Australian prime ministers to take on advisory roles with foreign governments and companies. For instance, former Prime Minister Tony Abbott served as an official UK trade adviser under former Prime Minister Boris Johnson, shaping post-Brexit trade policy.
Danantara is set to conduct a roadshow in Australia in September 2024, as it seeks to make strategic investments globally. Concurrently, Anindya Bakrie, head of Indonesia’s influential Chamber of Commerce and Industry, is scheduled to visit Melbourne, aiming to strengthen business connections between the two nations.
Indonesia has recently appointed new consuls-general in Melbourne and Sydney to enhance investor relations, further demonstrating its commitment to strengthen ties with Australia. This relationship is pivotal as Indonesia is projected to become the world’s fourth-largest democracy by 2040.
Strengthening Australia-Indonesia Ties
Later this week, Australian Treasurer Jim Chalmers is expected to meet with his Indonesian counterpart during the G20 summit in Durban, South Africa. Chalmers expressed hopes for a significant announcement that could advance the economic partnership between the two nations.
In a notable reflection on the importance of the relationship, Keating stated in 1994, “no country is more important to Australia than Indonesia.” This sentiment was echoed by current Prime Minister Anthony Albanese, who visited Jakarta shortly after his re-election in 2025.
During his tenure, Keating built a solid relationship with the late President Suharto, Prabowo’s father-in-law. This diplomatic shift, although strained during the East Timor crisis in 1999, transformed Australia’s stance towards Indonesia from potential adversary to a stable partner.
The Albanese government continues to prioritize a robust defence relationship, highlighted by Defence Minister Richard Marles signing a new treaty-level defence cooperation agreement in August 2024.
