This chapter examines Indonesia's South China Sea policy under President Susilo Bambang Yudhoyono. For much of his administration (2004–14), Indonesia held on to three interrelated policy concepts: non-claimant, honest broker, and confidence-builder. Indonesia is a non-claimant as it does not stake a claim in the disputed waters of the Spratlys. Indonesia maintained a non-claimant status because China has yet to clarify publicly its infamous “nine-dash line” map. In the absence of such clarification, Jakarta has not acknowledged that any maritime boundary dispute with Beijing exists — which has allowed Indonesia to exploit the hydrocarbon and marine resources of the Natunas’ exclusive economic zones (EEZs). Ambiguity over the nine-dash line thus seemingly benefited both China and Indonesia. A non-claimant position has further allowed Indonesia to play the role of an “honest broker” among the claimants. Indonesia has played that role by becoming a confidence-builder seeking to peacefully manage, rather than legally resolve, the disputes through multilateral mechanisms to achieve a “dynamic equilibrium”. A dynamic equilibrium is when regional countries would work with others to build institutional mechanisms and architecture — with ASEAN playing a central role — where no power is dominant or excluded and all parties make up part of a web of mutually beneficial relationships.

Taken as a whole, these policies were not the product of Yudhoyono's novel strategic insights. Instead, they are rooted in the broader historical and political contexts of Indonesia's overall approach to the South China Sea since the 1990s. Specifically, I argue that four dimensions of interests have shaped Indonesia's South China Sea policy for over two decades: (1) sovereignty and resources, (2) military and security, (3) Indonesia–China bilateral relations, and (4) ASEAN centrality and cohesion. Given these interests, Indonesia cannot afford to be an innocent bystander. Yet, as a non-claimant, Indonesia's options to actively engage the dispute are limited. Accordingly, it has relied on a combination of multilateral and diplomatic policies to manage the tension in the area and a series of unilateral steps to prepare for and hopefully prevent an all-out regional conflict. In international relations parlance, Indonesia as a non-claimant with strategic interests carefully combines “external institutional balancing” (engaging the claimants through ASEAN) and “domestic internal balancing” (improving domestic economic and national security institutions to deter or prevent regional conflicts) since the 1990s.