The Australian government immediately announced it would recall its ambassador, Paul Grigson, and suspend ministerial visits. In a rare show of solidarity, the Labor Party and the Greens fully supported this. It is unclear at this stage if other actions might be taken.
For Indonesia's part, Vice-President Jusuf Kalla and Attorney-General H.M. Prasetyo have downplayed the recall of the ambassador. Kalla told the Indonesian public this was normal diplomatic procedure. He even referred to Indonesia's recalling of its ambassador in 2013 over the Australian spying scandal.
This suggests the Indonesian government expects the diplomatic rift to be temporary. The ministers also repeated demands for Australia to respect Indonesia's political and legal sovereignty.
Indonesian leaders play to voters too
Indonesia has employed two key strands of justification for the executions. The first relates to dubious claims about an epidemic of drug addiction and the deterrent effect of capital punishment.
Many Indonesians support the death penalty for serious drug crimes. These domestic conditions are central to understanding Indonesia's refusal to meet Australia's requests for clemency. As a democratic state, like Australia, Indonesia's policies are shaped by public opinions and what politicians feel will play well with voters.
Jokowi's authority to govern comes from his electoral legitimacy. This has been threatened by his rapidly declining popularity. He is increasingly seen as a puppet of the strongly nationalist leader of the Democratic Party of Struggle (PDI-P), Megawati Sukarnoputri.
The refusal to grant clemency is clearly a political decision. In the face of pressure from Australia, Brazil, Netherlands and the broader international community, Jokowi sided with his domestic rather than international interests.
Sovereignty matters to Indonesians
The second strand of justification is related to Indonesian sovereignty. This does not provide a reason for denying clemency so much as it establishes Indonesia's right to deny clemency.
The potency of this argument in Indonesia is rooted in a political culture that deeply values independence and territorial integrity.
Holding the diverse, post-colonial archipelagic nation of 17,500 islands together has long occupied Indonesia's leaders. Foreign attempts to influence Indonesia are often viewed by Indonesians as an interference in domestic affairs that compromises sovereignty.
In this context, it is difficult to judge whether any diplomatic entreaties would have worked. In Indonesia, defying international pressure can be presented as an admirable display of strength.
Indonesian governments traditionally do not respond well to bullying and threats. Like Jokowi, Australian Prime Minister Tony Abbott is no stranger to projecting "strong leadership" to a domestic audience.
Falling back into old habits, Abbott's threats of an "absolutely unambiguous response" and using humanitarian aid as leverage proved disastrous. Even after Foreign Minister Julie Bishop was sent to mop up, Jokowi refused to answer Abbott's calls.
Australia's public diplomacy and treatment of Indonesia has long betrayed a sense of superiority. This is an attitude that is now proving counterproductive.
Indignation about human rights is selective
Indonesia's sovereignty concerns are partly rooted in a perception that Western states such as Australia seek to impose a particular vision of human rights on Indonesia.
On this point, Australia should empathise. After all, Abbott only recently declared that Australians were "sick of being lectured to by the United Nations" on its human rights record.
Public diplomacy campaigns do not exist in a vacuum. It's difficult to separate the executions from other foreign affairs matters, including Australia's policy of turning back boats carrying asylum seekers.
This was deeply unpopular in Indonesia. Prior to his election, Jokowi promised to be "stronger" on issues of sovereignty. He referred specifically to Australia's "unacceptable" incursions into Indonesian waters as part of the "turn back" policy.
The Abbott government's response has been unrepentant. This policy does nothing to alleviate Indonesia's long-held suspicions - reinforced by Australian support for East Timor's independence - that Australia does not respect its territorial integrity.
Regardless, like Jokowi, Abbott has sought to demonstrate strength on border control and security to his domestic audience.
Indonesian's stubbornness mirrors Australia's own refusal to be lectured on its refugee policy. This ultimately compromises Australia's moral authority.
Diplomacy cannot be business as usual
The Australian government's use of careful diplomatic language reflects a complex balancing act. It wants to display displeasure without permanently damaging its relationship with Indonesia. However, recalling the ambassador is unprecedented for the bilateral relationship and not without risks.
On one level it is about demonstrating Australia's displeasure. But what is the end game here?
Public diplomacy involves a specific way of exerting influence, which entails making arguments in the public realm to persuade a nation's government to do what it would otherwise not do. As terribly sad as it is, in this case the damage is done.
It might be too cynical to wonder if the government is acting in a way it thinks will boost opinion polls. Is it trying to punish Indonesia or send a message about what happens when demands are not met?
Or is this the start of Australia taking the lead in a renewed diplomatic push to abolish the death penalty? Perhaps Australia might begin by defending the 60 non-Australians on death row for drug crimes in Indonesia, or by condemning the US and China for their use of capital punishment. As horrifying as the killings of the rehabilitated Chan and Sukumaran were, Australia's moral position was compromised by its narrow focus on two of its own.
Indonesia is the rising power in the relationship
While demonstrating displeasure is necessary, the Australian government should exercise caution.
Historically, bilateral relations have been defined by Australia's demands of Indonesia. However, this dominant position is likely to be flipped in future.
Australia will have to negotiate a stronger, more confident Indonesia. Vice-President Kalla pointedly noted that Australia has more to lose in a protracted diplomatic row with Indonesia.
This is not to say that the death penalty should not be condemned. But Australia needs a reality check here: Indonesia is not some colonial backwater that Australia can just boss around. Australia needs to take more seriously Indonesia's status as an emerging power.
Indonesia's GDP has already surpassed Australia's by virtue of its vast population size. It is predicted Indonesia will have the world's eighth-largest economy in 2050. In contrast, Australia will fall out of the top 20.
Indonesia's emergence as a key player in the "Asian century" will require Australia to rethink its long-term strategic interests. Engaging with Indonesia will require creative diplomatic solutions and an understanding of Indonesian concerns regarding sovereignty, intervention and security.
This article was originally published in The Conversation.