Indonesia ready to normalize ties with Israel as part of bid to join OECD – official

Head of economic forum said to broker deal that could see world’s largest Muslim nation establish relationship in exchange for Jerusalem smoothing way into developed countries club

Joshua Davidovich is The Times of Israel's Deputy Editor

People take part in an anti-Israel demonstration in Surabaya, Indonesia, on November 17, 2023. (Juni Kriswanto / AFP)
People take part in an anti-Israel demonstration in Surabaya, Indonesia, on November 17, 2023. (Juni Kriswanto / AFP)

Indonesia could normalize ties with Israel as part of a deal to smooth the entry of the world’s most populous Muslim nation into a global forum for developed countries, an Israeli official said Thursday.

The official, who spoke on condition of anonymity, confirmed a report in Israeli newspaper Yedioth Ahronoth detailing months of hush-hush talks between Jerusalem, Jakarta, and Organization for Economic Cooperation and Development Secretary-General Mathias Cormann.

Normalization would mark a stunning about-face for Indonesia at a time when anti-Israel sentiment in the Muslim world is running higher than it has in years due to the war in the Gaza Strip.

But establishing ties would also spell an end to Israeli opposition to Indonesia joining the OECD, according to the report.

The OECD began the process of adding Jakarta to the 38-nation forum in February, but Israel had reportedly objected to its accession due to the lack of diplomatic relations. Countries must receive unanimous support to join the bloc, which is dedicated to advancing economic growth via neo-liberal fiscal policies.

Cormann initially secured a promise from Indonesia to shift its critical stance toward Israel, but Foreign Minister Israel Katz balked at pulling Jerusalem’s opposition, saying normalization would be needed, Yedioth reported.

After several weeks of negotiations, Cormann sent a letter to Katz two weeks ago in which he said he had brokered an agreement according to which Indonesia will not be allowed to join the bloc until it has normalized ties, the paper said. The wording of the letter was approved by Indonesia, according to Yedioth.

Foreign Minister Israel Katz in Jerusalem, February 19, 2024. (Chaim Goldberg/Flash90)

An OECD spokesperson noted the adoption of a multi-year accession roadmap for Indonesia by the OECD Council on March 29. The roadmap includes the requirement that candidates “demonstrate … like-mindedness in their statements and actions in their relations with the Organisation and its Members.”

“Any decision to invite Indonesia to become an OECD Member would need to be taken by unanimity of all OECD Members,” the spokesperson said.

There was no comment on the report from authorities in Indonesia.

On Tuesday, Israel allowed Indonesia to participate in an airdrop relief mission over Gaza for the first time, a possible signal of burgeoning ties.

Under outgoing Indonesian President Joko Widodo, Indonesia tolerated low-level, quiet contacts with Israel, mainly on trade, but largely shunned open ties with the Jewish state.

Indonesia President Joko Widodo, right, greets Organisation for Economic Co-operation and Development (OECD) Secretary-General Mathias Cormann as he arrives during the G20 Summit in Bali, Indonesia, November 15, 2022. (Mast Irham/Pool Photo via AP)

In March, Widodo’s office denied a report that Jakarta and Jerusalem had intended to normalize relations in October 2023 before the October 7 Hamas attack in Israel and the resulting war caused the plan to be shelved, the Jakarta Post reported.

Moves toward normalization between the countries have been rumored for years, but Indonesia has refused to cement ties until an independent Palestinian state is established and has been a staunch supporter of the Palestinians. The country has a tiny Jewish community.

Anti-Israel protests are common in Indonesia, where support for the Palestinians runs high.

Protesters display posters as they pray during a rally in support of the Palestinians in Gaza, outside the US Embassy in Jakarta, Indonesia, Saturday, March 9, 2024. (Dita Alangkara/AP)

In March last year, the country was stripped of its role as host of the men’s Under-20 World Cup amid massive domestic opposition to the participation of an Israeli soccer team in the tourney.

Even without official ties, direct and indirect Israel-Indonesia trade comes to about $500 million per year, Israel-Asia Center executive director Rebecca Zeffert told The Times of Israel in 2022.

Widodo has repeatedly condemned the violence in Gaza and has urged parties to “stop the escalation, to stop the use of violence, to focus on humanitarian issues, and to solve the root of the problem, namely the Israeli occupation of Palestine.”

In January, Jakarta filed a case against Israel at the International Court of Justice in The Hague. It has also backed South Africa’s genocide accusation at that court over Israel’s war against Hamas in Gaza.

JTA contributed to this report.

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