For much of the past two decades, Australia has looked north to Indonesia and seen a close neighbour, a regional power, a trading partner and Australia’s number one overseas destination. Increasingly, however, it has also viewed Indonesia through the lens of Islam.
That shift was not accidental. Before the “War on Terror”, Indonesia was more commonly imagined in Australia as Australia’s Asian neighbour. The Bali bombings changed that, casting Indonesia increasingly through the lens of Islam, terrorism and security. A 2006 Lowy Institute report found that many Australians viewed Indonesia as “a dangerous source of Islamic terrorism” and even as a threat to Australia.
More than two decades on, it is time to widen that lens. As Foreign Affairs Minister Penny Wong observed at an event commemorating the twentieth anniversary of the Bali bombings, the terrorists failed to divide Australia and Indonesia. Instead, we “turned towards each other”. The next step is to deepen that relationship by seeing Indonesia not simply as a security partner or a “Muslim neighbour”, but as a remarkably diverse society — and Indonesian Islam as diverse, dynamic and constantly evolving.
And that matters not only for understanding Indonesia, but also for understanding Australia.
Australia’s relationship with Muslims is much older than the War on Terror. For at least four centuries, Muslim dominated maritime networks from what is now Indonesia and made seasonal voyages to northern and north-western Australia in search of trepang (sea cucumber). These voyages are commonly associated with the Makassans, although the fleets were ethnically diverse, and included “Makassar, Bugis, Javanese, Ceramese, Sumawese, and the Bajau ‘sea-gypsies’, among others”. The visitors negotiated access to Aboriginal waters and worked with Aboriginal communities in fishing, processing trepang and other activities while exchanging goods, labour and knowledge. The encounters also left traces in language, culture and social practices across northern Australia.
One of Australia’s earliest sustained encounters with Muslims was therefore shaped by mobility, trade, negotiation and cultural exchange and diversity, not security or terrorism.
Modern Muslim Australia has a different history. The dismantling of the White Australia policy in the 1960s and 1970s opened the country to migrants from increasingly diverse backgrounds. Migration from Türkiye helped establish one of Australia’s early large Muslim communities, followed by migration from other parts of Asia, the Middle East and Africa. Australian Muslims are not one community. They speak different languages, come from different ethnic backgrounds, and hold different political and social views. Yet public debate still too often speaks about “Muslims” as though they were a single cultural and political bloc.
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Indonesia offers a different way of thinking about Muslim diversity and, importantly, about what Australia can learn through exchange rather than one-way observation.
Indonesia has the world’s largest Muslim population, but Islam in Indonesia is far from uniform. The nation formally recognises six religions — Islam, Protestantism, Catholicism, Hinduism, Buddhism and Confucianism — alongside diverse forms of kepercayaan (belief systems). Recognition does not always mean equality in practice, however. Adherents to certain kepercayaan, including Indigenous traditions, continue to face challenges in areas such as civil registration, education and employment.
Yet this landscape is also changing. In 2026, the Ministry of Culture designated 13 July as the National Day of Belief in Almighty God, just weeks before Indonesia marked its eighty-first Independence Day on 17 August. The recognition offers a timely reminder that Indonesia’s story of religious diversity is not a settled achievement but an ongoing negotiation over whose beliefs and identities are recognised within the nation.
This is reflected in Indonesia’s own measures. Its 2025 Religious Harmony Index reached 77.89, the highest score since the survey began in 2015. “Tolerance” scored particularly high at 88.82, while “equality” was lower at 79.35 and “participation” or “togetherness” came in at 65.49. These differences remind us that living with diversity involves more than tolerance: it also raises questions about whose beliefs are fully recognised. The distinction matters. People may accept difference without necessarily living together as equals.
The most revealing debates about diversity are often personal: interfaith marriage, religious authority, religious minorities and the boundaries of belonging. Digital platforms and popular culture are also reshaping religious life. They can amplify polarisation, but they also allow young Indonesians to discuss faith and morality beyond traditional institutions. Figures such as Habib Jafar have gained influence partly because they communicate religious ideas in ways that resonate with younger generations.
This is not simply a story about Indonesia becoming “more Islamic” or “less Islamic”. It is a story about how Islam, and religious diversity more broadly, is being lived and reshaped in contemporary Indonesia.
As Australia continues to debate migration, multiculturalism, religious freedom and belonging, the 2026 Census once again put religious identity and belonging in the spotlight. Indonesia offers not a model to copy, but a different experience of negotiating religious diversity.
The 2026 Indonesia Update is an invitation to explore these questions together — not simply to learn about Indonesia, but to learn with Indonesia and from the experiences of its diverse communities. Looking beyond the Muslim neighbour may offer Australia a richer way to understand both Indonesia and itself.
Eva Nisa is an Associate Professor of Anthropology at the Australian National University. She is the convener of the 2026 Indonesia Update on Islamic Diversity in Indonesia.
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