Indonesia's relationship with Australia could be "thrown under a bus" following Canberra's provocative move to consider relocating its embassy in Israel, a trade expert is warning.
Prime Minister Scott Morrison yesterday indicated he was open to moving Australia's diplomatic presence from Tel Aviv to Jerusalem, a move that would follow the United States' controversial decision earlier this year to recognise Jerusalem as Israel's capital.
Like Mr Morrison, Indonesia's President Joko Widodo is facing an election next year.
"That's what makes this situation potentially dangerous and also very complex for two leaders who obviously get on very well after their first meeting," Indonesia Institute chairman Ross Taylor told AM.
Like the Coalition's battle to hold the seat of Wentworth, Indonesia's religious vote in next year's national elections could be critical.
Last month the Indonesia President surprised many by choosing as his vice-presidential running mate conservative cleric Mar'uf Amin, who heads the country's largest conservative Muslim movement and has called for a fatwa against secularism.
"Jokowi has to make sure his new running mate and the backing he has from the conservative Islamists are kept happy, and of course they are very pro-Palestine," Mr Taylor said.
"If he has to throw Australia under a bus in order to preserve that position, that is something he would have to give consideration to.
"But he's really being wedged by Morrison's comments and I think he'd be preferring that would not [have] happened."
That is because the Indonesia President has been a supporter of free trade talks that were expected to culminate in a signed agreement some time in November.
A falling Indonesian rupiah has helped advance the talks, Mr Taylor said.
"They have a trade imbalance as capital flees Indonesia, and the President, I feel, has been very keen to demonstrate he has a good economic base where he wants to take the country," he said.
"That free trade deal with Australia is a good starting point to demonstrate to the market it's open for business."
There are conflicting signals from Indonesia.
One senior source told the ABC yesterday trade talks could be off following Mr Morrison's announcement.
But Trade Minister Enggartiasto Lukita told the Reuters news agency no such move was being contemplated.
Mr Morrison told AM he was not surprised the Trade Minister discounted the ABC report.
"We've been in close engagement with Indonesia and we share one important value in common and that is we both support a two-state solution [for the Middle East conflict]," he said.
