Indonesia was bumped from its position as the biggest recipient of Australian aid this week, and President Jokowi paid a visit to the country taking its place: Papua New Guinea. Before heading across the border, President Jokowi further opened media freedoms in Indonesia's Papua provinces (though several restrictions were left in place). Meanwhile in Jakarta, government officials joined civil society in commemorating the tragedy of the May 1998 riots.

Questions about the strings attached to Australian aid were raised again in Jakarta this week as the budget allocation for aid to Indonesia was slashed by almost half. Treasurer Joe Hockey said the aid cuts were not related to the recent executions of two Australian citizens in Indonesia, which had prompted the withdrawal of the Australian ambassador last week. A poll by the Lowy Institute showed that most Australians would prefer 'private diplomatic protests' over either aid cuts or the withdrawal of the ambassador in response to the executions.

In Indonesia, there has been little protest over Australia's aid cuts. Following the #CoinsforAustralia saga earlier this year, Australian aid to Indonesia and its implications of diplomatic 'debt' has remained a cause of public resentment. Online commenters have argued that Indonesia will be better off without Australia's conditional donations — even non-Indonesian speakers can pick up the tone in news comments sections like this one with the common refrain: 'Go to hell with your aid'. As for the official response, Indonesian Foreign Minister Retno Marsudi indicated that the cuts were expected, while Jokowi said it was Australia's right to decide whether to give aid to Indonesia or not, and that it was nothing to cry about.

The aid cuts reflect a changing dynamic in Australia-Indonesia relations. As Indonesia's economy and its role in the region continue to grow, Australia will eventually transition out of the role of donor for Indonesia's development.

However, it is still in Australia's interests to ensure that Indonesia develops in an equitable and sustainable way. At present, while Indonesia is becoming increasingly wealthy, its wealth is very unevenly distributed. Cuts to Australian aid will affect Indonesia's poorest, which in turn can affect regional stability and security.

It is also in Australia's interests to maintain a strong partnership with Indonesia in handling regional affairs. An aid budget that preferences countries supporting Australia's domestic agenda on asylum seekers signals to Indonesia and others an inward-looking and short-sighted approach to building regional relationships.

As Australia's aid focus turned to Papua New Guinea this week, so did Indonesia's attention, though for different reasons. As Anna Kirk wrote on The Interpreter this week, PNG Prime Minister Peter O'Neill welcomed a closer partnership with Jokowi in supporting development in Indonesia's Papuan provinces, and expressed support for Indonesia's bid to join the Melanesian Spearhead Group, effectively edging out the possibility of membership by the United Liberation Movement for West Papua.

Prior to the visit to PNG, Jokowi stopped by Papua, where he released five political prisoners and eased restrictions on foreign journalists reporting from the province. The visit was intended to signal the Indonesian Government's commitment to improving conditions in the restive province. However, questions remain over press freedom and the state of civil and political rights in the region.

In Jakarta, the Commission on Violence Against Women (Komnas Perempuan) commemorated the May 1998 riots with a ceremony at the Pondok Rangon cemetery, the site of a mass grave for those who died in the violence. Student protests and the riots that followed across Jakarta and other major cities in May 1998 led to the fall of the Suharto regime and ushered in an era of democratisation.

However, successive governments have been slow to acknowledge the tragedy that accompanied this turbulent time in Indonesia's recent history. In a rare move, Jakarta city government officials attended the ceremony in Pondok Rangon on Wednesday and held an open discussion with survivors and family members of victims of the violence. A statue was unveiled that depicted a needle and thread stitching a piece of cloth draped over an open hand, as a symbol of Jakarta's unfinished healing process.

Photo courtesy of Flickr user Adib Wahab.