Australia–Indonesia security pact expands into drones, cyber and economic resilience

Australia and Indonesia have agreed to deepen security cooperation under their new Jakarta Treaty, with Canberra committing A$33.2 million to implementation while providing aerial drones and training to Indonesia’s coast guard and expanding collaboration across cyber security, maritime awareness and economic resilience. The measures were detailed in a joint statement published on August 29 following the tenth Australia–Indonesia Foreign and Defence Ministers’ 2+2 Meeting, held in Melbourne on August 26.

The meeting was the first 2+2 dialogue since the two countries signed the Australia–Indonesia Treaty on Common Security, known as the Jakarta Treaty. Ministers described the bilateral relationship as being at a high point while warning that the regional geostrategic environment was deteriorating and increasingly required closer consultation between two of the Indo-Pacific’s largest neighbours.

The security package is also linked to a much larger economic relationship. Australia and Indonesia welcomed the second phase of the KINETIK climate and sustainable infrastructure partnership, under which Australia is committing A$600 million over the 2026–2035 period to support sustainable infrastructure and climate investment across Indonesia. They also highlighted a 250,000-tonne agricultural-grade urea supply deal and said Australian liquefied petroleum gas supplies to Indonesia had increased at least threefold between 2025 and 2026.

How will Australia’s A$33.2 million commitment turn the Jakarta Treaty into practical security cooperation?

The A$33.2 million allocation is intended to institutionalise the treaty rather than fund one individual weapons purchase. Australia said the money would strengthen Indonesian language capability, institutional links and cooperation across cyber, maritime and economic security and resilience, creating a framework through which officials and defence institutions can work together more routinely.

That institutional dimension matters because security treaties can remain largely symbolic unless governments create mechanisms that survive changes of ministers, military commanders and political priorities. Australia and Indonesia have therefore tasked officials with exploring ways to institutionalise more direct high-level consultations under the Jakarta Treaty while continuing implementation of their separate 2024 Defence Cooperation Agreement.

The Jakarta Treaty builds on the 2006 Lombok Treaty but pushes the relationship further by explicitly framing Australian and Indonesian security as interconnected. Canberra and Jakarta said each country benefits from the other’s stability, resilience and security, language that reflects a broader shift from traditional bilateral diplomacy toward strategic coordination.

The treaty has not yet completed all domestic procedures needed for entry into force, but both governments said they expected those processes to move forward. The August meeting therefore functions partly as an early test of whether the agreement will develop into substantive operational cooperation.

Why is Australia providing aerial drones to Indonesia’s Bakamla coast guard?

One of the most tangible new measures is Australia’s commitment to provide aerial drones and training to Bakamla, the Indonesian Maritime Security Agency, to strengthen maritime domain awareness. The purpose is to improve Indonesia’s ability to observe activity across a vast archipelagic territory containing some of the world’s most important commercial sea routes.

Indonesia faces an unusually complex maritime-security environment. Its waters are used by commercial shipping, fishing fleets, energy transport and military vessels, while enforcement agencies confront illegal fishing, smuggling and other transnational threats across enormous distances.

Unmanned aerial systems can extend surveillance well beyond the visual range of patrol vessels and provide relatively persistent coverage without requiring the operating costs associated with larger crewed aircraft. Training is therefore as important as the hardware because effectiveness depends on integrating drone surveillance with maritime command systems, patrol vessels and enforcement agencies.

The announcement also has a wider strategic dimension. Indonesia does not formally align itself with competing great-power blocs and has traditionally guarded its strategic autonomy, but improved surveillance capacity gives Jakarta greater ability to understand and respond independently to activity in waters important to its sovereignty.

What did Australia and Indonesia say about rising tensions in the South China Sea?

The joint statement expressed concern about actions that raise tensions and risk miscalculation in the South China Sea and other important waterways. Both governments emphasised the obligation of states to comply with international law, particularly the United Nations Convention on the Law of the Sea, and said maritime disputes must be settled peacefully.

Australia and Indonesia did not single out China by name in that section of the statement. That wording is significant because Jakarta maintains substantial economic relations with Beijing and generally avoids framing regional security through the same overt strategic competition language used by some Western governments.

Nevertheless, references to miscalculation, safe military conduct, freedom of navigation and the legal framework governing maritime claims place the statement squarely within the wider regional debate surrounding Chinese and Southeast Asian territorial claims.

The two governments also said any eventual South China Sea Code of Conduct must remain consistent with international law and UNCLOS. That position reinforces concerns among several regional states that a negotiated code should not weaken existing legal rights or create restrictions inconsistent with international maritime law.

How much broader is the Australia–Indonesia partnership becoming beyond traditional defence cooperation?

The August 29 statement shows that Canberra and Jakarta increasingly define security to include energy, supply chains, infrastructure and economic resilience. Ministers cited disruption from geopolitical conflict, uncertainty in global trade and pressure on international supply chains as reasons for expanding cooperation.

The A$600 million second phase of KINETIK illustrates that approach. Running from 2026 through 2035, the partnership is designed to support sustainable infrastructure and climate investment across Indonesia while potentially creating opportunities for Australian businesses and investors.

The governments are also developing cooperation involving critical supply chains, economic-security analysis and investment links with Danantara, Indonesia’s sovereign wealth fund. A defence-industry trade delegation is planned as both countries examine areas where Australian and Indonesian companies can collaborate more closely.

That creates a model in which defence policy and industrial policy reinforce one another. Australia gains a more capable security partner immediately to its north, while Indonesia gains technology, investment and institutional support without entering a formal alliance structure.

Why does Indonesia matter so much to Australia’s wider Indo-Pacific security strategy?

Geography makes Indonesia indispensable to Australia’s security calculations. The Indonesian archipelago lies directly across important approaches between the Indian and Pacific oceans, while both countries share an interest in preventing Southeast Asia from becoming a theatre of uncontrolled strategic competition.

Indonesia is also Southeast Asia’s largest economy and population centre, making its choices influential throughout the Association of Southeast Asian Nations. Australia therefore has strong incentives to build its regional security relationships around Jakarta rather than relying exclusively on traditional alliances with the United States and other Western partners.

For Indonesia, Australia offers sophisticated defence capabilities, training, investment and access to wider regional partnerships while generally acknowledging Jakarta’s preference for strategic independence.

The Jakarta Treaty consequently differs from a military alliance. It is better understood as an attempt to make consultation and cooperation more predictable when either country faces security challenges that could affect the other.

What are the key takeaways from the Australia–Indonesia security and investment package?

• Australia has allocated A$33.2 million to support implementation and institutionalisation of the Jakarta Treaty.
• Canberra will provide aerial drones and training to Indonesia’s Bakamla coast guard to strengthen maritime domain awareness.
• Australia and Indonesia intend to deepen cooperation across cyber, maritime and economic security.
• The two countries expressed concern about actions increasing tensions and miscalculation risks in the South China Sea.
• Both governments said maritime disputes and any future South China Sea Code of Conduct must remain consistent with international law and UNCLOS.
• The second phase of the KINETIK partnership provides A$600 million for sustainable infrastructure and climate investment in Indonesia from 2026 to 2035.
• Australian liquefied petroleum gas supplies to Indonesia have increased at least threefold between 2025 and 2026.
• Both sides are pursuing additional defence-industry, supply-chain and investment cooperation.

Could the Jakarta Treaty become one of Australia’s most consequential Asian security relationships?

The importance of the August meeting lies less in any single drone transfer or funding announcement than in the architecture being constructed around them. Australia and Indonesia are linking traditional defence cooperation with cyber resilience, maritime surveillance, infrastructure, energy and supply-chain security, creating more points of institutional contact than existed under earlier bilateral arrangements.

That matters in an Indo-Pacific environment where governments increasingly worry about crises emerging through maritime confrontation, economic coercion, cyber incidents or supply disruptions rather than conventional warfare alone. Australia cannot manage those risks effectively without Indonesia, while Jakarta benefits from greater capability without surrendering its long-standing policy of strategic autonomy.

The Jakarta Treaty will ultimately be judged by how governments behave during a real regional crisis. Yet the A$33.2 million implementation commitment, Bakamla drone support and growing exercise programme indicate that Canberra and Jakarta are already trying to ensure the agreement becomes operational before such a test arrives.