Scott Morrison has faced the first test of his prime ministership in Indonesia

NEW prime minister Scott Morrison has faced his first major leadership test over an issue that could make or break Australia. No pressure.

OVER the weekend, Scott Morrison faced the first real challenge of his leadership.

No, this wasn’t about crunching the budget numbers, stopping the boats or curbing our population growth rate. It was about our neighbour Indonesia.

As the United States retreats from Asia, and China muscles in at the same time, experts have warned Australia needs to start repositioning itself as a key player in the Asia-Pacific region.

Over the weekend, the new Prime Minister was in Jakarta — an appointment originally set up by Malcolm Turnbull — where new deals were signed with President Joko Widodo, aimed at achieving exactly that.

Here’s what went down.

WHAT HAPPENED IN INDONESIA

On his first international excursion as PM, Mr Morrison had some big shoes to fill.

It was well-known that former prime minister Malcolm Turnbull had a warm friendship with Mr Widodo. This meeting was set up while he was still in power.

For Australia-Indonesia relations, Mr Turnbull’s rise to the top job was a marked shift after relations plummeted under the Abbott government.

Malcolm Turnbull famously had a good relationship with Joko Widodo.

This was the first time Mr Morrison met the Indonesian leader.

But the pair concluded with two significant deals under their belts — a free-trade deal that had been eight years in the making, and a Comprehensive Strategic Partnership to symbolise their commitment to elevated security ties.

Australia and Indonesia are two of the world’s 20 largest economies, but neither are in each other’s top 10 trading partners, making a trade deal crucial going forward.

Meanwhile, the Comprehensive Strategic Partnership was important to dealing with rising protectionism, intolerance and threats of conflict, particularly — although it was never said out loud — from China.

It spoke of the “threats of conflict” and “shifts and challenges” both countries faced.

“If left unattended, these may lead to the dismantling of the precious ecosystem and rules-based regional architecture that we have built over the past half century.”

“Our partnership reflects our vision of a region in which the Association of Southeast Asian Nations (ASEAN) is central, the rights of all states are respected, and countries behave in accordance with international rules and norms.”

The ABC hailed the trip as a “success”, noting that the PM “appeared relaxed and confident” as he posed with Indonesian children and made small-talk with the country’s president.

Scott Morrison met Indonesian president Joko Widodo for the first time over the weekend. Picture: AAP Image/Lukas Coch

The visit was marked as a ‘success’, with two new deals being pushed through. Picture: Ed Wray/Getty Images

The ABC noted the PM ‘appeared relaxed and confident’ throughout. Picture: Graham Crouch

WHY INDONESIA IS SO IMPORTANT TO US NOW

If there’s ever a time to solidify our relationship with Indonesia, it’s right now.

According to ANU professor and former chief defence strategist Hugh White, Indonesia “has the potential to be far more important to Australia than we have ever conceived” — potentially even rivalling China.

The country’s economy is growing rapidly. If it maintains its current growth rate, it will become the world’s fifth-largest economy by 2040, and the fourth-largest by 2050. As it stands, its GDP is set to be triple Australia’s in just over a decade.

“Wealth is the ultimate foundation of national power, so that will make Indonesia, or should make Indonesia, a very powerful country,” Prof White writes in Australian Foreign Affairs.

Our northern neighbour may not yet pack a punch on the world stage like the US or China — but give it time.

Indonesia’s proximity to Australia makes our relationship all the more important.

Prof White also notes Indonesia could be a “major strategic asset to Australia, helping to shield us from more-distant threats”.

He says Indonesia is the only neighbour close enough to pose any kind of serious threat to us — and at the same time, it’s the only country strong enough to defend us against any potential threats to our north.

“Just as our closeness with Indonesia gives us many reasons or pretexts to be enemies, it also gives as many reasons to become allies. And this means that Indonesia’s growing power can be both good and bad news for Australia, making it both a more valuable potential ally and a more dangerous potential adversary.”

In other words, as the United States continues to retreat from the Asia-Pacific, and China’s position gets stronger, a strong alliance with Indonesia could prove invaluable.

Commentators have suggested Scott Morrison is off to a good start with Indonesia so far. Picture: AAP Image/Lukas Coch

The magazine’s editor Jonathan Pearlman notes that Australia’s independent strength is already diminishing.

“Australia’s global economic weight is likely to shrink over time, and its military edge in the Asia-Pacific region is already fading.

“Furthermore, the status and allure that Australia gains from being a close ally of the region’s dominant player, the United States, will diminish as China rises and Beijing challenges Washington’s primacy in Asia.”

WHAT ABOUT THE THREAT OF CHINA?

Concerns over China’s rising power and influence can be felt across the Pacific, but it didn’t get a mention from either Indonesian or Australian officials over the weekend.

Beijing and Jakarta are engaged in their own feud due to overlapping territorial claims in the South China Sea.

While Australia has no claims to the region, it asserts the “right to freedom of navigation” through oceans, in defiance of China.

Mr Morrison is yet to make his first move on China. Until recently, Beijing’s relationship with Canberra faced a lengthy diplomatic “freeze” due to rising tensions over foreign interference laws and the South China Sea.

But Beijing welcomed the new prime minister’s election last month.

In a statement to The Australian, a spokesman for the Chinese Foreign Ministry said: “China’s policy towards the relationship with Australia has always been consistent and clear.

“A healthy and stable relationship is not only good for the two countries but also good for the regional and global peace, stability and prosperity.

“We look forward to working together with Australia to further develop the relationship in the right direction.”