Iain Henry is a Fulbright Scholar and PhD Candidate at ANU's Strategic and Defence Studies Centre. He tweets at @IainDHenry.

Recent events have thrust the Australia-Indonesia relationship back into the spotlight. Managing this relationship will be one of the next Government's highest priorities. Importantly, this extends beyond the immediate concern of people smuggling. Hugh White has recently argued that Indonesia will only become more important for Australia in the coming years, so it seems obvious that we cannot let a single issue dominate such a relationship.

In this context, the history of East Timor's independence provides a cautionary tale for Australia's political leaders.

Australia's role in East Timor still generates suspicion and resentment among some Indonesians. At worst, it is said Australia secretly worked to achieve East Timorese independence, despite having assured Indonesia that we supported their rule. At best, Australia's conduct was seen as unnecessarily triumphalist and insensitive to Indonesia's fragile position following the fall of Suharto.

Within the last few years some commentators have suggested that Australia secretly worked towards East Timor's independence, but these claims do not withstand critical examination. In a recent article published by the Australian Journal of International Affairs (paywalled), I examine Australia's 'historic policy shift' on East Timor. Drawing on data from interviews with 15 former political leaders, public servants and others, I rebut the idea that Australia ever desired, or worked towards, East Timorese independence.

Once Indonesian President BJ Habibie had resolved to conduct an act of self-determination in East Timor, Australia had little choice but to support it. In allowing a self-determination ballot, Habibie had put Indonesia's international reputation on the line at a time when it desperately needed foreign assistance to recover from the Asian financial crisis. In this situation, Australia's neighbourly duty was to help as much as it could by ensuring a free and fair ballot.

Few Indonesians will ever see Australia's conduct in East Timor as the behaviour of a good neighbour, but the alternative — a ballot subverted or overturned by the Indonesian military — would have been a catastrophe for Indonesia's fledgling democratic experiment.

The history of 1998-1999 contains three important lessons for Australian leaders and policymakers today. The first is that sudden policy changes can have a significant impact on the bilateral relationship. When Prime Minister Howard wrote to BJ Habibie and suggested a policy change on East Timor, it sparked an unanticipated chain of events that led to East Timor's independence. This outcome could not have been reasonably foreseen, but the example shows that policy decisions regarding Indonesia must be handled with the utmost care, sensitivity and tact, lest they generate unintended consequences. Sadly, Australia's recent track record on this front is less than encouraging.

The second lesson is that, put simply, we need to treat Indonesia with much greater respect.

This is not to suggest that we refrain from pursuing our national interest or self-censor on issues of disagreement, but rather that we begin to treat Indonesia as an important country. We especially need to strive to ensure that we do not embroil Indonesia in our own domestic political squabbles. Following the tragic violence of September 1999, the myth that Australia 'liberated' East Timor was politically advantageous for the Howard Government, but it gave credence to the argument that Australia conspired to break up Indonesia.

The behaviour of our political leaders could go a long way to changing the national conception of Indonesia. This is a non-partisan point: both sides of politics are guilty of this sin.

Hopefully, as the Australian electorate becomes better informed about Indonesia's growing importance, public attitudes could shift to the extent that a prime minister's ability to manage the Indonesia relationship (much like their ability to manage the US alliance or our economic relationship with China) becomes a key test of their electability.

Thirdly, it is worth considering whether we are best served conceiving of Australia and Indonesia as 'friends' or as 'neighbours'. If we approximate the countries to two individuals, they would share few similarities: different standards of wealth and education, different languages, customs and culture. Their friendship, while not impossible, would seem unlikely. They would have little in common and would probably mix in different social circles.

Perhaps for these reasons, some find it hard to conceive of Australia and Indonesia being friends. However, these differences shouldn't prevent us from being good neighbours. Rather than both countries perceiving the other to be something of a fair-weather or unreliable friend, a more stable footing might be for both countries to focus on being a 'good neighbour' to the other. Good neighbours wouldn't construct a new fence, remove a shady tree or adopt a noisy dog without first discussing the idea with their neighbour.

Over time, once these habits of cooperation and consultation have become the norm, we might find that, because of our efforts to become good neighbours, we become good friends.

Photo courtesy of the Defence Deaprtment.