Indonesia halts ties with Australia over spying claims

President Susilo Bambang Yudhoyono has frozen military and intelligence links with Australia over claims the latter had tapped the phones of several top government officials including Yudhoyono and the state secretary.

Indonesia has put a stop to key bilateral cooperation with Australia and warned economic ties could be strained, following reports the latter had spied on top Indonesian officials. 

President Susilo Bambang Yudhoyono said on national television Wednesday he was freezing military and intelligence cooperation, further straining an already tense relationship between the two countries, according to a Reuters report.  

Further leaks from NSA whistleblower Edward Snowden on Monday revealed the Australian government in 2009 had tapped the phones of several senior Indonesian government officials including Yudhoyono, his wife, the vice president, and the state secretary. Last week,  Indonesian hackers launched a denial of service attack  on the website of the Australian Secret Intelligence Service in retaliation to claims Australia used its Jakarta embassy for spying.

Yudhoyono's announcement means discussions over the issue of asylum seekers will also be stalled. "It's clear that this is a logical step Indonesia must take," he said. The Indonesian military told Reuters the freeze on military cooperation would be effective at the start of next year. 

The report noted that the Australian Defense Department was seeking clarification on the statement as it was unclear what exactly the impact would be on bilateral ties. It further quoted the country's recently-minted prime minister, Tony Abbott, who spoke earlier in parliament to express regret over the latest reports. "I do understand how personally hurtful these allegations have been for him and his family," said Abbot, who has refused to address the surveillance claims .

Indonesia's Trade Minister Gita Wirjawan said the latest Snowden revelation could threaten bilateral economic ties, with trade between the two countries worth over US$11 billion last year. According to Reuters, Indonesia is a significant importer of Australian agricultural products while Australia is Indonesia's 10th largest export market. "It is difficult if two neighbors can't trust each other to think about anything related to economic cooperation," Wirjawan said.

Indonesia on Monday recalled its ambassador to Australia and said it was "devastated" over the spying reports. "This is an unfriendly, unbecoming act between strategic partners," said its foreign minister Marty Natalegawa, who announced the ambassador's return to Jakarta.

Australia's former foreign minister Bob Carr chided Abbott for being dismissive over the diplomatic row, which he described as " catastrophic ", and demanded the Abbott administration apologize immediately.