Indonesia and Malaysia still opposed to ties with Israel despite covert relationship

Photo: dror lahat / Pixabay

While Indonesia and Malaysia remain publicly supportive of Palestine and refuse to establish ties with Israel, both countries have successfully pursued a secret trade and diplomatic relationship with Tel Aviv for decades.

By Umair Jamal

On April 1, Israel’s ambassador to Singapore, Sagi Karni, told the South China Morning Post that Muslim countries in Southeast Asia, particularly Indonesia and Malaysia, could have “fruitful relations” with Israel.

Karni’s gave the statement following Israel’s recent normalization of ties with the United Arab Emirates (UAE), Bahrain, Morocco and Sudan.

Currently, Israel does not have an official diplomatic relationship with Indonesia or Malaysia but the two countries have long enjoyed a booming trade and political relationship with Tel Aviv.

Karni believes that the Muslim word’s views on Israel are changing and his comments show Tel Aviv hopes to develop ties with Southeast Asia’s Muslim countries.

That said, at this point, Indonesia and Malaysia do not appear ready to publicly acknowledge their relationship with Israel, let alone establish formal ties.

“Fruitful relations”: What is Israel proposing to Indonesia and Malaysia?

Regarding Israel’s position on ties with Indonesia and Malaysia, Karni said that “We are open and willing and interested in having good relations with all countries. We have nothing against Malaysia; we have nothing against Indonesia.”

“We’d like to have normal diplomatic, political relations we would like to have also, very importantly, normal economic relations.”

However, he explicitly said that the onus to move the discussion forward in this regard was on Indonesia and Malaysia. As soon as they give an indication that they want to develop ties “we can move very fast,” Karni said, “But we cannot force anybody to be our friends.”

Former Israeli Prime Minister Benjamin Netanyahu. Photo: Chatham House, London shared under a Creative Commons (BY) license

Karni’s comment can be best understood as a reference to Malaysia and Indonesia’s insistence on the resolution of the Palestine issue before normalizing diplomatic ties with Israel. In 2016, Israeli Prime Minister Benjamin Netanyahu had asked Indonesia to normalize ties with Israel, but Indonesia refused to move on the offer unless Palestinians were granted an independent state.

Responding to Israel’s recent normalization of ties with Arab countries, Indonesia’s foreign office said the country’s position will not change.

Similarly, Malaysia offered a relatively muted response to the development and called for Palestinians rights to be protected.

According to Karni, the agreements with the UAE and Bahrain, known as the Abraham Accords, demonstrate to the Muslim world that Israel is not looking for any secret deals. For Karni, the Abraham Accords represent a “conceptual paradigm change” where all parties involved signed agreements in front the world and “not behind closed doors.”

From Israel’s perspective, this strategy could be replicated with other Muslim countries, including Indonesia and Malaysia, if they are willing.

Karni said that the formula for developing ties is different now as Israel offers “Peace for peace, trade for trade, flights for flights, tourism for tourism, science for science.”  

Abraham Accords signing ceremony. Photo: The White House from Washington, DC, Public domain, via Wikimedia Commons

Understanding Indonesia and Malaysia’s response to the Abraham Accords

Indonesia and Malaysia’s response to this shift is interesting in that there have been no overt or hostile calls from official circles to continue boycotts against Israel at all costs. Arguably, both countries have welcomed the agreements as they have described the development as an opportunity to open more avenues to resolve the Palestine issue.

Indonesia called on all parties involved in the Abraham Accords to “respect the relevant United Nations Security Council resolutions and internationally agreed parameters” to safeguard Palestinian rights.

“We understand the intention of the UAE and Bahrain to provide space for the relevant parties [Palestine and Israel] to negotiate and change the approach to solving the Palestinian issue through this agreement. However, the effectiveness of the agreement depends to a large extent on Israel’s commitment to respect it,” Indonesia’s Foreign Ministry spokesperson Teuku Faizasyah said in a statement.

“It is time to consider that these initiatives and agreements [Abraham Accords] are geared toward restarting a credible multilateral process. This will allow equal footing for all parties and be based on agreed international parameters,” the spokesperson added.

Malaysia’s response on the other hand also indicated that the country is not opposed to the development. In a statement, Malaysian Minister of Foreign Affairs Hishammuddin Hussein said that his country recognized the “sovereign right” of the UAE to establish diplomatic ties with Israel. But he reiterated that Malaysia’s position on the issue of Palestine and Palestinian rights remains unchanged.

Indonesia and Malaysia’s responses indicate that both countries anticipate the agreement could offer new chances to resolve the Palestine issue, which could then allow them prepare to recognize Israel as well. 

Photo: hosny salah / Pixabay

With successful relationships behind the scenes, what prevents Indonesia and Malaysia from recognizing Israel? 

Analysts believe the UAE, Bahrain and other Gulf countries’ recognition of Israel will make it difficult for Indonesia and perhaps Malaysia to continue supporting the Palestinian cause.

“Of course, there’s a commitment not to interfere in the affairs of other countries that have normalized [ties with Israel] but Indonesia will still gently remind them not to forget the plight of the Palestinians,” said Yon Machmudi, a researcher based at the University of Indonesia’s Center for Middle East and Islamic Studies.

Indonesia and Malaysia’s cautious responses to the accords come despite strong pressure from radical elements to criticize the agreements. To an extent, this domestic pressure is perhaps the one key reason that may prevent them from establishing diplomatic relations with Tel Aviv. “Domestic radical Islamist elements will feature strongly in Indonesia’s decision-making processes on issues pertaining to relations with Israel,” noted Syed Huzaifah Bin Othman Alkaff of Singapore’s Nanyang Technological University (NTU) in an article he published recently. 

Another paper written by Greg Barton and Colin Ruben Stein for the Jewish Political Studies Review argues that, “While not inherently antithetical to Israel, Indonesia clearly places a higher value on avoiding trouble with radical Islamist elements at home than it does on normalizing relations with far-away Israel.”

Sebastian Strangio, writing for The Diplomat, suggested that, “Given the costs [for Indonesia], it is also questionable whether formal recognition would be worth it.” 

There is also evidence to suggest that both Indonesia and Malaysia have somewhat secretly maintained a cordial relationship with Israel. For decades, there have been many high-rank visits between Indonesia and Israel. Bilateral trade between Indonesia and Israel, which is mostly routed through other countries, reached US$400-500 million in 2013. In 2018, bilateral trade between the two countries reportedly amounted to US$100 million. According to an Israeli official, the bilateral trade between Indonesia and Israel reaches “hundreds of millions of dollars a year.” An Israel-Indonesia economic council has had an established office in Israel since 2009.

The equation is similar for Malaysia, which has a “booming but very discreet” trade and informal diplomatic relationship with Israel. According to data published by the Israeli Central Bureau of Statistics (CBS), total trade between Malaysia and Israel reached US$1.5 billion for 2013 alone. Roughly US$1.46 billion of this figure was Israeli exports to Malaysia. In 2016, Israel’s exports to Malaysia reportedly stood at US$1.4 billion. However, Israel’s exports to Malaysia over the last four years have dropped significantly with Tel Aviv only exporting US$6.81 million worth of goods in 2020.

“Trade continues to accelerate: Between January and July this year, Israeli exports to Malaysia soared to US$884.7 million (RM2.8 billion), a 27% jump over the same period last year,” according to a Times of Israel article about 2014’s trade exchanges.

Like Indonesia, Malaysia uses third countries to do business with Israel, which makes its particularly difficult to account for the total volume of bilateral trade. “Every shipment is duly recorded in Israel’s foreign trade statistics but studiously ignored by Malaysia,” the Times of Israel said.

“A raft of Israeli exporters and eager buyers in Malaysia and also neighboring Indonesia—the world’s most populous Muslim nation—are braving the political headwinds in order to do business—largely through third countries such as Singapore.”

“As in the case of Southeast Asia, the allure of Israel’s high tech exports to business people in these countries seems to outstrip the political hostility,” it noted.

For Indonesia and perhaps Malaysia to recognize Israel “would likely require a deal that would grant strategic political, economic or military advantage which would not only appease nationalists but also be worth the trouble with Islamist groups,” argues NTU’s Alkaff in his recent article.

While a thriving trade relationship and discreet diplomatic contacts remain in place, it is unclear when Indonesia and Malaysia could be ready to openly establish ties with Israel. Much of this will depend on the countries’ domestic political conditions which, for now, remain hostile to any such prospect.

About the Author

Umair Jamal
Umair Jamal is a freelance journalist and a Ph.D. candidate at the University of Otago, New Zealand. He can be reached at and on Twitter @UmairJamal15