Greta Nabbs-Keller is writing a PhD at Griffith Asia Institute on the impact of democratisation on Indonesia's foreign policy.

There is a perceptual factor in the Lowy Institute's 2012 Indonesia Poll which may explain Australia's apparent policy inertia on Indonesia.

The first clear message from the polling is that Australia's public diplomacy efforts in Indonesia are ineffective. This is despite the fact that Australia is Indonesia's largest bilateral aid donor and that AusAID is engaged in an impressive breadth and depth of capacity-building programs across Indonesia. This should provide significant 'relationship capital' for Australia, but it's clearly not resonating with the Indonesian public.

The Lowy Institute has argued for the need to expand our diplomatic resources and develop our ediplomacy capabilities. Given resource constraints on DFAT, perhaps it is time for the Government to consider greater outsourcing of its public diplomacy efforts. The private sector could probably do a better job with 'brand Australia' and in capitalising on Australia's existing soft power appeal in the education, health and business sectors in Indonesia.

The second development is that the US has pipped Australia in the popularity stakes. The Indonesian public feels warmer and fuzzier toward the US, most likely because of the Obama factor, and believes the US provides more aid money than Australia.

Improved Indonesian public perceptions of the US, combined with the fact that Washington has 'pivoted' toward Asia in strategic and economic terms, is not all good news for Australia. Perceived US retrenchment from Southeast Asia under the Bush Administration and ongoing policy restrictions on engagement with Indonesia's military provided Australia with greater policy space in Indonesia. Now we are increasingly competing with the immense resources and inducements the US has to offer Jakarta across a range of sectors.

But Australia retains some comparative advantages, based on our proximity and easy personal rapport with Indonesians. In light of US re-engagement with Indonesia, Australia needs to better identify and align its niche capabilities with Indonesian priorities.

Finally, the report reveals a level of frustration with Australia's management of its bilateral relationship and its failure to capitalise on positive economic and political developments in Indonesia. There is 'a tendency to view Indonesia as an amalgamation of threats' and to 'treat it as a miscreant Pacific atoll', Fergus Hanson argued.

The answer may lie in the political fragility factor identified on p.15 of the Poll. Australians, like Indonesians, are not entirely convinced about the viability of Indonesia's democracy as a basis for ongoing stability and economic growth. Perhaps this collective cynicism extends to Australia's government and foreign policy establishment. After all, why expend significant resources on moving our relationship beyond the 'negative positives' when Indonesia's politico-security situation could go pear-shaped again?

Perhaps it is a lack of conviction, rather than blindness, which constrains Australia's Indonesia policy. A sense that Indonesia's current circumstances represent a 'democratic interregnum', rather than a fundamental political and economic transformation, may explain some of the policy inertia. There is some basis for Australian scepticism about Indonesia, but the problem in hesitating is that others are bounding ahead.

Photo by Flickr user BombDog.