Like all the closest of relationships, the Australia have been marked by periods of tension as well as friendship and cooperation; by areas of great strength and by those that need to be strengthened further.
I feel privileged to be here representing my country in taking forward this unique relationship, facing mutual goals and challenges as strategic partners — and knowing that across business, cultural and government sphere we enjoy such strong and genuinely warm sentiments.
And this brings me — literally to business. Because it’s here — in the business to business relationship — that I plan to devote a lot of energy. This is where I see real potential for growth.
This is not to say the economic and trade relationship is not growing — it is currently 400 Australian businesses have operations in Indonesia in fields ranging from mining and agriculture to education, and Australian businesses had invested over A$4.7 billion in Indonesia in 2009.
But while the relationship is growing — it’s not growing as fast as it could the stats over the past five years look good — a 6.1 percent increase in our total trade in goods and services. But from 2008-2009 to 2009-2010, we saw only 1.1 percent growth despite our proximity and complementarity — Indonesia is ranked only 13th among Australia’s trading partners in terms of total trade volume, and number 12 as a source of imports for Australia (number 11 for exports to Indonesia), while Indonesian investment in Australia is seriously underdone — at only A$339 million for 2009.
We can do better than that. But it will take effort on both sides.
For governments — we need to do what we can to facilitate investments so that Indonesian and Australian businesses are aware of the possibilities.
Australian companies have much to offer in a business partnership, not least an interest in genuine, long-term partnerships, their appetite for long-term commitment is demonstrated by those companies who are expanding their operations here and bringing services and other benefits to Indonesian consumers (to audience), you know who you are.
“Australian businesses need to at least have an Indonesia strategy — because there is too much potential to miss.”
Potential Indonesian partners can — and should — expect to benefit from robust corporate governance regimes; a commitment to corporate social responsibility (CSR) programs and responsibilities; strong training programs; and world-class expertise in many areas. I know that most of the Australian companies I have spoken to here take great pride in what they are doing for local communities. I engaged widely with Australian businesses before taking up this post. And the message from them was clear. Indonesia is increasingly on their radar.
But Indonesia is also an unfamiliar frontier, despite its proximity. People worry about the unknown — they need understanding, certainty and clarity about the business environment, whereas often things in Indonesia are not clear until you are on the ground, Australian businesses need to put real effort into finding and nurturing the right local partnerships.
My message to Australian businesses is that they need to at least have an Indonesia strategy — because there is too much potential to miss.
For us the Comprehensive Economic Partnership Agreement (CEPA) presents the perfect opportunity and vehicle to do more. The decision by President Susilo Bambang Yudhoyono and Prime Minister Julia Gillard to commence negotiations on an Indonesia-Australia Comprehensive Economic Partnership Agreement (or the IA-CEPA) reflects the maturity of the strategic partnership between our two countries. The key word in this agreement is “comprehensive” — it is much more than an FTA negotiation. It’s about economic cooperation and integration, about encouraging investment both ways, and includes a capacity building element to ensure Indonesia is as well placed as it can be to maximize on the agreement.
We plan to work with Indonesia and to support Indonesia to ensure we reach the best possible outcome for both countries.
It will be absolutely crucial to consult all sectors — and we particularly need to consult with the business community and those organizations that represent the business community.
We want to know what you think — and where you see the CEPA as potentially adding value to existing cooperation, the Department of Foreign Affairs and Trade has already called for submissions: Please talk to me or my staff if you would like to make a submission.
We want to hear if you think there are areas that we should focus on: areas where you have concerns; areas where the agreement can support your business and I hope an agreement can also work towards big picture goals — such as food security — and enhancing Indonesia’s capacity to play a greater role in the global production and supply network for the security of future Indonesians and the future of the countries Indonesia can, in turn, supply.
We can draw on areas where Australia has expertise to create new opportunities — for example in agribusiness, in medical capability, research and technology, and in services and look to areas where Indonesia can enhance its potential as an investor overseas and as a country where investors want to be in ever-greater numbers.
Of course consultation with business is nothing new, because business links are a core pillar in the bilateral relationship, business contributes in a fundamental way to the vital component of the bilateral relationship that is investment and economic growth, but in terms of our long-term relationship, it’s the way that business is done that counts and by that I mean the personal and people-to-people links that bind us and set us apart from other relationships around the globe.
Because I think we do have a unique relationship with natural synergies that can be harnessed to the benefit of both countries and peoples. More broadly, our people-to-people links can be seen in terms of tourist flows and our unique education relationship. Australia offers a close destination for quality higher education and vocational education and training (over 18,000 enrolments in 2010).
In the Indonesia Australia Business Council, it’s clear that relationship and people-to-people links matter. Looking around this room — I see many faces who have used their personal qualities and strong relationships with Australia and Australians to contribute a great deal to the relationship.
The writer is Australian Ambassador to Indonesia. He has presented his credentials to President Susilo Bambang Yudhoyono on Dec. 3, 2010. This article is excerpted from his speech delivered at the Australia Day Business Luncheon on Jan. 26 hosted by the Indonesia Australia Business Council.
Comment: Joe Collins, Sydney, Australia | Wed, 02/02/2011 - 04:02am
It seems West Papua is the Cassowary in the room . The Australian Ambassador does not mention the human rights situation in West Papua in his article yet the recent shocking video footage of West Papuans being tortured by Indonesian soldiers caused outrage around the world. The soldiers were not even charged with torture but with disobeying orders and only received light sentences of between 8 and 10 months jail. The Ambassador's article concentrates heavily on the importance of government and business relations between the two countries. However, the Australian and the Indonesian people do care about human rights as do the West Papuan people who suffer the ongoing abuses. Hopefully the Ambassador will visit West Papua on a fact finding mission to investigate not only the human rights situation in the territory but also to see how Australia can help the West Papuan people in capacity building in fields such as health and education.
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