The country staged a successful Asian Games in 2018, an event held between the Indonesian capital of Jakarta and Palembang, the capital of South Sumatra province.

That encouraged Indonesia to begin exploring the prospect of launching a bid for the Olympic Games.

Last November, Indonesia President Joko "Jokowi" Widodo officially announced a formal bid to host the 2036 Summer Olympics in the currently unbuilt new capital city of Nusantara.

International Olympic Committee (IOC) President Thomas Bach was fully on board. "Having seen a presentation of the Nusantara project and the progress already achieved, I am deeply impressed by the vision of President Widodo to develop this city as a model for sustainable living, with a special emphasis on health and sport," he said.

Bach’s enthusiasm has probably waned a bit now after the events of the last few days saw Indonesia pull out of hosting the Association of National Olympic Committees (ANOC) World Beach Games only a month before they were due to open in Bali on August 5.

The official reason given by the Indonesian Olympic Committee (KOI) President Raja Sapta "Okto" Oktohari was that the Government had not provided the promised funding and that the withdrawal of sponsors had added to the difficulty of putting on a world-class event.

Indonesia’s Youth and Sports Minister Dito Ariotedjo was quick to refute these suggestions, claiming the Government had given World Beach Games organisers plenty of time for preparations after the country was officially named in June last year as the host of the event.

Dito admitted that KOI's proposed budget of Rp1 trillion (£52 million/$66 million/€61 million) for the World Beach Games had been reduced to Rp446 billion (£23 million/$29 million/€27 million), but argued that should have been more than enough to stage the event. 

He referred mysteriously to "other issues" being a factor in the decision to pull out of hosting the World Beach Games. Most people believe the potential presence of a team from Israel at the Games was a major contributor to the decision not to release the money.

The Israel-Palestinian conflict is an emotional issue in the world’s most populous Muslim-majority nation, whose 277 million people broadly support the Palestinian cause both for religious reasons and an anti-colonial tradition that dates back to the country’s independence.

The timing of the announcement about the World Beach Games seemed suspicious as it coincided with Israel launching a major military operation in the West Bank, a two-day operation which caused extensive damage to roads, homes and cars and killed 12 Palestinians. With a Presidential election coming up next year, the governing Indonesian Democratic Party of Struggle, widely known as PDIP, is wary of controversy. The prospect of Israel's flag flying over Indonesia territory would undoubtedly have sparked criticism. 

In March, FIFA had stripped Indonesia of the right to host the 2023 Under-20 World Cup due to opposition and protest marches in Jakarta over Israel’s participation in the tournament.

In the run up to that tournament, which was also scheduled to be held in Bali, the Governor I Wayan Koster had sent a letter to Indonesia’s Sports Ministry requesting Israel be banned from competing in the province, even though its population is majority Hindu.

Indonesia’s withdrawal was only announced on Tuesday (July 4), but uncertainty over the country’s hosting of the World Beach Games stretched as far back as April, when Koster had reiterated his objections to Israel travelling there to compete.

Israel had qualified to compete in the 3x3 basketball at the World Beach Games only for that event to be dropped after officials claimed they could not find a venue to host it. But Israelis were still due to compete in the open water swimming.

"Don’t ask me. I wasn’t even aware of it," Wayan claimed to local media when asked about the decision to cancel the World Beach Games.

This is not the first time that hosting a major event involving Israel has embroiled Indonesia in controversy. When it staged the Asian Games in 1962, it breached promises to invite countries it did not have diplomatic relationships with, including Israel, and refused to issue them visas.

As a result, Indonesia was suspended from the IOC, and were subsequently excluded from the 1964 Olympics in Tokyo. Indonesia responded to this punishment by hosting the Games of the New Emerging Forces in 1963.

Indonesia is unlikely to face any punishment for its decision to withdraw from hosting the World Beach Games, apart from reputational damage.

"There will be consequences, and we are still communicating," Oktohari admitted. "In principle, NOC Indonesia will continue working and, at present, we will organise activities to bolster the exposure of Indonesia's sports."

The biggest consequence seems certain to be that Indonesia’s bid for the 2036 Olympics has sunk quicker and deeper than its current capital Jakarta is slipping into the sea.