On 6 February, Indonesia and Australia signed the Australia-Indonesia Treaty on Common Security, also known as the Treaty of Jakarta 2026, marking a major milestone in their bilateral relationship. Hailed by leaders as a ‘watershed moment’ and the most significant step in the relationship in 30 years, the treaty sets out to make the Indo-Pacific more stable while also bringing the two nations closer in security work, economic ties and education. But its real-world impact will depend on how both nations translate words into action.
The big ideas that hold the treaty together
At the core of this agreement lie ideas that weave security and shared prosperity into one connected vision. The treaty focuses on making security talks and teamwork stronger than ever before. Top leaders and ministers will now meet regularly to talk through issues that matter to both sides, with a promise to sit down together if either nation faces serious threats. New plans are already in motion, such as building joint military training sites in Indonesia and placing a senior Indonesian military officer within the Australian Defence Force.
Alongside defence work, economic security has been named a key strategic goal. The Australian government and Indonesia’s sovereign wealth fund Danantara have signed a memorandum of understanding to boost two-way investment, share important information, and find new opportunities in areas such as farming and renewable energy. Right now, Danantara is already looking at ways to partner on Indonesia’s US$5 billion (about A$7.6 billion) waste-to-energy projects, with Australian businesses ready to take part.
The treaty also puts a strong focus on connecting people and institutions. More students and academics will get to travel between the two countries, and schools and universities will work together more closely. This builds on Australia’s A$319.3 million development partnership with Indonesia for 2025-26, which puts education and good governance first to build stability for the long run. Both nations have also reaffirmed their support for international law—especially the United Nations Convention on the Law of the Sea (UNCLOS)—and solving disagreements peacefully. This point was front and centre at the first Indonesia-Australia Maritime Dialogue in December, where officials agreed to work side by side on keeping seas safe and stopping conflicts before they start.
What’s missing from the deal
Even with all its big goals, the treaty leaves out several important pieces that could get in the way of it working well.
First, there are no clear rules for how to handle access to strategic straits. Indonesia controls some of the world’s most important shipping routes, such as the Sunda Strait and Lombok Strait—waterways that matter greatly for Australian and allied military movement. Yet the treaty says nothing specific about how military ships can use these waters. This is a noticeable gap, especially when you think about Australia’s existing defence links with Papua New Guinea and how security works across the wider Indo-Pacific.
Second, the treaty doesn’t tie in much with the Association of Southeast Asian Nations’ security frameworks. Most of the focus is on what Indonesia and Australia can do together as two countries, but there’s little talk about how this work will fit with the ASEAN Political-Security Community (APSC)—the main way the region works on collective security. If Jakarta Treaty projects aren’t linked to forums like the ASEAN Regional Forum, there’s a risk of doing the same work twice or even going against what the region as a whole is trying to achieve.
Third, there’s no clear plan for how to respond when a crisis hits. While the treaty says both sides will talk things through if there’s a security threat, there are no detailed plans for what to do in specific situations—for example, if there’s a territorial disagreement in the South China Sea or around the Natuna Islands, or if threats such as terrorism or cyberattacks crop up. This lack of clarity could mean slow action or even different responses when every second counts.
Fourth, the treaty is quiet on sensitive territorial topics. It makes it clear that Indonesia’s land and waters are its own, but it doesn’t say how cooperation might affect areas such as Papua—a region that matters because of Australia’s defence agreement with Papua New Guinea, which covers nearby land and sea.
Without open talk about these issues, small misunderstandings could end up straining trust between the two countries. On top of this, some Indonesian critics worry the treaty might make it harder for the nation to stick to its long-standing policy of not taking sides in global power struggles.
What needs to happen next
To get the most out of the treaty, both countries need to move quickly on a few key priorities.
Indonesia and Australia should start talking right away about a supplementary agreement on strait access. The goal would be to set up clear, rules-based ways for military ships to use Indonesian waters—all in line with UNCLOS. This could include letting each other know in advance when ships are coming through, running joint patrols in key areas, and working with other regional partners such as Malaysia and Singapore.
The two countries next should find ways to weave Jakarta Treaty work into ASEAN’s security systems. For instance, joint military training could be linked to the APSC’s programs for building skills across the region, or the ASEAN Ministerial Meeting on Transnational Crime could be used to coordinate how to fight terrorism and deal with cyber threats. Doing this would make the whole region stronger and make sure the treaty supports what ASEAN is trying to achieve.
Then, bilateral security arrangements could be bolstered by the establishment of a dedicated task force to draft plans for how to respond to different types of crises, with regular practice runs to make sure everything works smoothly.
On the economic front, the Australian government and Danantara should speed up their work under their memorandum of understanding and focus on finding big, impactful projects in renewable energy—such as solar and geothermal power—and infrastructure. This would bring real economic benefits to both countries while making their strategic ties even stronger.
Finally, both governments need to be more open about what’s happening. To build trust with the public and stop unnecessary rumours, secrecy should be minimised and regular updates should be given on how things are going. This would help make sure everyone knows the parties to the agreement are being held accountable and that the treaty truly serves people in both nations.
Looking ahead
The Jakarta Treaty 2026 is clearly a major step forward in how Indonesia and Australia work together, tying security to economic growth and making the region more stable. Its focus on talking things through, connecting people and following international rules comes at exactly the right time.
But to make sure it lives up to its promise, both countries have to address the gaps in how the straits are used, how it fits with ASEAN, and how to plan for crises—and they have to act fast to turn words into action.
The future of the Indo-Pacific doesn’t just depend on deals between two countries; it depends on how well those deals work with the bigger frameworks that bring the whole region together to build a safer, more prosperous community.
This article was originally published in Asialink Insights.
