Monday, February 20, 2017

Jokowi Lite: The Indonesian president’s non-visit


The relationship between our two countries is now back on a more normal diplomatic footing for the moment but we need to do better than that if we are to make the most of our proximity to this gigantic nation of 270 million that considers itself now ‘rising’. 

The president of Indonesia was out of the country before many Australians even knew he had arrived.
Joko Widodo (known as Jokowi) touched down Saturday and was back in Jakarta by Sunday evening after a series of meetings in Sydney, including dinner with Prime Minister Malcom Turnbull at his home at Point Piper. This flying visit was in stark contrast to the four days originally planned for November last year, which had included an address to the Australian parliament. Compared to the original plan, this weekend drop-in was Jokowi-lite.

It is therefore also hardly surprising that their announceables lacked much punch. The Australian had foreshadowed the two countries would agree to cooperate in joint patrols in the South China Sea but this did not eventuate, perhaps because of backlash when this was reported in Jakarta.

Full restoration of bilateral military ties was announced by the two leaders, but that is old news. The apology made in Jakarta on 8 February by Australian army Chief Lieutenant General Angus Campbell had already ended tensions over supposedly offensive training materials used in language training programmes involving Indonesian Special Forces soldiers in Perth. In fact, Wiranto, Indonesia’s Coordinating Minister for Politics, Law and Security, had intervened in the row back in January. He made it clear then that the suspension of ties applied only to a few language courses.

Likewise, the renewed commitment to conclude negotiations this year for an Indonesia-Australia Comprehensive Economic Partnership Agreement (IACEPA) announced by the president and the prime minister was just that: a renewed commitment.

Indonesia is, in fact, currently renegotiating all its bilateral trade agreements, with the aim of strengthening its ‘national interests’. This is really shorthand for increasing its capacity to protect domestic business, a position that reflects reality on the ground in Indonesia. Although Jokowi repeatedly asserts that Indonesia is open for business and wants foreign investment to fix its crumbling or absent infrastructure, in reality Indonesia remains a very challenging destination not least because of bureaucratic red-tape and poor law enforcement. This is particularly true for investors who might find themselves competing with one of Indonesia’s politically powerful konglomerat, or tycoons.

In any case, as every lawyer knows, an agreement to agree is not enforceable, and it will be very difficult to draft an IACEPA that will make both countries happy. Progress so far has, unsurprisingly, been slow, and that is unlikely to change, not least because Australia has limited leverage with Indonesia when it comes to trade negotiations.

Turnbull and Jokowi agreed that the Australia-Indonesia trade relationship is underdone. Their announcement that a new Australian Consulate General will open in Indonesia’s second city, Surabaya, is therefore welcome, as are decisions to lift tariffs for some imports and improve access for Australian cattle exporters.

These are not game-changers, however. Despite its population of 270 million, Indonesia is only our 13th largest trading partner and two-way trade is worth only $15.3 billion, less than with Thailand ($20.8 billion) and Malaysia ($19.2 billion), let alone Singapore ($28.5 billion), despite the smaller size of these economies. The two leaders did not mention that Australia invests over ten times more in New Zealand ($99.93 billion) than it does in Indonesia ($8.4 billion), despite Indonesia being the 16th largest economy in the world – and on track, if rating agencies are correct, to be in the top 10 by 20130 and the top 5 by 2050.

Part of the problem is that we do not export much that Indonesia wants and Indonesia doesn’t sell much that we want. Both our economies are commodities-based and opportunities for business partnerships across the Arafura Sea have historically been limited. They still are.

It also needs to be acknowledged that Indonesia’s clunky investment procedures and institutionalised corruption pose serious obstacles for foreign investment. Like so many of Jokowi’s election promises, his claims that he would quickly fix these problems once in office have proved over-ambitious, so don’t bank on IACEPA transforming things in a hurry, even if it is signed this year.

Jokowi’s visit was rushed and lacked much spark but this is not because he has any particular animus towards Australia or because he doesn’t want good relations with us. Rather it reflects the fact that, unlike his predecessor, Susilo Bambang Yudhoyono, he does not see the bilateral relationship as being a special one or a big priority. Jokowi is a domestically-focused president with limited interest in foreign affairs. His main focus seems to be business and as a trading partner we are just not in the league of Indonesia’s major trading partners, Japan, the United States, China or the European Union – or even Singapore, Thailand and Malaysia.

The speed of the visit also reflects the fact that Jokowi’s is a weak presidency. An outsider to elite politics in Jakarta, he is the first president of Indonesia not to lead his own party and has struggled to consolidate power and maintain workable coalitions in the national legislature. Jokowi has faced a series of political challenges to his authority and doesn’t like to be out of the country for too long.

He is, for example, currently dealing with a major campaign by Islamist hardliners to prevent the incumbent governor of Jakarta, the ethnic Chinese Christian Basuki Tjahaja Purnama (known as Ahok), from being returned to office. Conservative Muslim leaders accuse Ahok of blasphemy and he is currently on trial for that offence. The second round of the gubernatorial elections is now scheduled for 19 April.
Ahok was Jokowi’s deputy and close advisor when Jokowi was governor of Jakarta. This means the gubernatorial race is widely seen in Indonesia as a proxy battle between Jokowi and two of the most powerful men in Indonesia – Prabowo Subianto (who Jokowi defeated in the presidential elections in 2014, and who supports Anies Baswedan for governor) and Yudhoyono (whose son, Agus, was knocked out in the first round elections). For many, it is also a rehearsal for the next presidential elections in 2019.

The Jakarta election is therefore a high stakes game, combing elite rivalry with Islamist rabble-rousing and growing anti-Chinese racist sentiment. This toxic brew led to huge rallies of about 700,00 people on the streets of Jakarta on the eve of Jokowi’s first planned visit to Australia in November last year, protesting against Ahok and, by association, Jokowi. It is easy to understand why Jokowi cancelled his trip at the last moment and why he could only manage a quick drop-in this time.

It is good that with his poisonous relationship with Tony Abbott now history, Jokowi seems to have developed a warm friendship with Turnbull of the sort that could enable them talk directly when the next problem arises between our countries, as it inevitably will.
We should not, however, read much more than that into Jokowi’s whistle-stop to Sydney. In the atmosphere of increased nationalism that has prevailed in Indonesian politics since the 2014 elections, Jokowi has proved very sensitive to perceived slights to his country’s dignity, historically a common cause of tensions in the Australia and Indonesia relationship.

It is also good that the relationship between our two countries is now back on a more normal diplomatic footing for the moment but we need to do better than that if we are to make the most of our proximity to this gigantic nation of 270 million that considers itself now ‘rising’.

Yes, business and security ties are vital but they are likely to continue to be slow to develop, unpredictable and often difficult. We should therefore be investing a lot more on cultural diplomacy than the utterly derisory sums we currently spend. We need more ‘soft power’ engagement to underwrite the relationship, give it ballast and make it less contingent on the personality of whoever is currently occupying the presidential palace in Jakarta or the revolving door at the Lodge.

But don’t hold your breath on this one. Like their predecessors, Jokowi and Turnbull dutifully announced that people to people links matter but, as usual, there was not even a hint of any new funding to back that up.

Tim Lindsey is Redmond Barry Distinguished Professor and Malcolm Smith Professor of Asian Law at the University of Melbourne Law School where he directs the Centre for Indonesian Law, Islam and Society.

Ciobo defends visa rules as Indonesia and Australia seek to cement trade deal

By Gabrielle Chan

Malcolm Turnbull will join the trade minister and a business delegation hoping to finalise a long-awaited trade deal with Indonesia
Australia’s trade minister, Steve Ciobo, has defended tough visa entry requirements for Indonesian students ahead of a high level visit to the country to complete an Australia-Indonesia trade deal.

Australia’s prime minister, Malcolm Turnbull, will join Ciobo and a delegation of 120 Australian business people for the Indonesia-Australia Business Week (IAWB).

Indonesia is Australia’s 13th largest trading partner and Australia is hoping to get more access for vocational education and tertiary institutions to operate in Indonesia, while Indonesia wants to get access to training and education in Australia.

Ciobo said both countries were looking to finalise the deal after a decade of negotiations. He has met his counterpart, the Indonesian trade minister Enggartiasto Lukita, 14 times since the latter came to the post in July last year.

In February, during a visit by the Indonesian president, Joko Widodo, to Australia, Indonesia agreed to lower tariffs on Australian sugar from 8% to 5%, while Australia agreed to remove tariffs on pesticides and herbicides coming from Indonesian suppliers.
Ciobo said on Monday the visa requirements imposed on Indonesians looking to study in Australia were part of an overall immigration system.

Indonesians aged 18-30 who apply for visas need to show they have access to $5,000 in their bank account, provide a letter of support from the Indonesian government, show they have completed two years of undergraduate study, have good English and provide a chest X-ray.
“Anything we do, we do in the context of existing visa requirements,” Ciobo said. “That’s part and parcel of the requirements we have in terms of securing visas for people from outside of Australia. We have requirements in terms of health for things like tuberculosis but we will look at it in the context of the overall deal.”

The Australian delegation is looking for opportunities in vocational education and training, tourism, financial services and technology, water and sustainable urban design and agribusiness supply chains.
Ciobo said Australia would like to have better access for the Australian labour force.

“Tens of millions of new Indonesian households are forecast to join the middle class over the next five years, presenting significant opportunities for Australian exporters to supply the growing needs of Indonesian consumers with Australian goods and services.”

The prime minister will travel to Indonesia on Monday night.

Trade, security ties and engaging the Indonesian diaspora – what you need to know about Widodo’s Australia visit

By Colin Brown

Officials from both Canberra and Jakarta must have been privately relieved last night. The first official visit to Australia by Indonesian President Joko Widodo (“Jokowi”) had finally taken place, and gone off without a hitch.

Jokowi is nearly half way through his five year term of office, yet has only now made the relatively short journey to Australia. He was due to visit in November last year, but called it off at the last minute due to political unrest at home. This was of course related to blasphemy allegations against his former deputy as Jakarta’s governor, Basuki Tjahaja Purnama or “Ahok”.

Malcolm Turnbull, by contrast, visited Jakarta in November 2015, just two months after coming to office. This tends to reinforce the standard narrative: Indonesia is more important to us than we are to Indonesia.
Jokowi’s recent visit was a good deal shorter than the one planned for last year. It was shorter too than the visit by Israeli Prime Minister Benjamin Netanyahu that immediately preceded it.

Jokowi’s timetable also omitted several of the high-profile events planned for the earlier visit, including an address to Parliament. But the visit did highlight several important issues in the bilateral relationship.

Trade ties

One is the low level of trade and investment flows between the two countries. Currently two-way trade is worth around A$11.2 billion a year; neither country ranks within the other’s top ten trading partners.
Even if some of the more optimistic assessments of Indonesia’s economic prospects turn out to be exaggerated, there is little doubt the country’s economy will continue to grow at a considerably faster rate than Australia’s for the foreseeable future.

At a time when Australia has successfully negotiated free trade agreements (FTA) with many of its Asian neighbours, efforts to conclude a similar deal with Indonesia have lagged.
Negotiations for an Comprehensive Economic Partnership Agreement (CEPA) between the two countries started nearly a decade ago. They stalled in 2013, and were only re-started in March 2016. The current target for signing off on the Agreement is the end of this year.

Jokowi signalled his support for the agreement by focusing on it as a key point of discussion. His visit follows directly on from the sixth round of bilateral negotiations in Canberra, attended by a senior Indonesian delegation.

However, broader Indonesian political and community commitment to free trade principles is not as evident. The Indonesia-Australia Business Partnership Group noted in a 2016 report “there is a general cynicism towards FTAs, CEPAs and an open economy in Indonesia”.
Even Jokowi himself has not been averse to adopting measures that look more like economic nationalism than free trade.
Widodo’s meeting with members of the Indonesian community at Darling Harbour was of considerable significance to him. DAVID MOIR/AAP
Moreover, many of the real barriers to trade between the two countries, and to Australian investment in Indonesia, lie not so much in formal regulations as in informal practices. Opaque regulatory mechanisms, weak legal protection and corruption in Indonesia all hinder trade and investment.
Indonesia is making progress in many of these areas, but overall still ranks below the regional average in ease of doing business.

Security co-operation

A second issue highlighted for discussion was security, including counter-terrorism and the problems posed to each country by returning former ISIS fighters. It was agreed that full ties between the two militaries would be restored, after minor disruptions two months ago, in relation to training materials at an Australian base that were seen as insulting by Indonesia.

There was also speculation on the possibility of joint Australia-Indonesia patrols in the South China Sea. Both countries reportedly emphasised the importance of freedom of navigation in the South China Sea.
But no details on any joint patrols have yet been released, probably because the idea is still rather undefined. It was raised by Indonesia’s defence minister Ryamizard Ryacudu during the joint meeting of foreign and defence ministers in Bali in October 2016. Julie Bishop cautiously responded that Australia agreed:
to explore options to increase maritime cooperation and of course that would include coordinated activities in the South China Sea and the Sulu Sea.
When Jokowi was asked about the idea before leaving Jakarta, he was also cautious. Such patrols, he said, would be “very important” as long as they did not raise tensions in the region.
It is hard to imagine joint patrols in the South China Sea not raising tension with China – unless they were conducted wholly outside the waters claimed by China.
The patrols, of course, need not be naval. Vessels of the Australian Fisheries Management Authority and the Australian Border Force already conduct joint patrols with their Indonesian counterparts to counter illegal fishing in waters north of Australia.

Even so, Australia-Indonesia patrols – joint or coordinated, civil or military – in the South China Sea do not seem imminent.

Indonesian community

A third aspect of the visit has attracted little attention but is probably of considerable long-term significance to Jokowi. This was his meeting with members of the Indonesian community at Darling Harbour – fairly standard activity for visiting heads of government.

But such meetings have taken on significance for Indonesia in recent years as it develops the concept of what it calls the Indonesian diaspora, through the Indonesian Diaspora Network.
Jakarta asserts there are some eight million members of this diaspora globally, albeit using a generous interpretation of the term. Looking to other national diasporas – especially the Chinese and Indian – Jakarta is hoping Indonesia’s will contribute to the country’s development at home, and the promotion of Indonesia overseas.

This is one of Indonesia’s most visible second-track (unofficial) diplomacy initiatives. Its significance to Jakarta is indicated by the fact the founder of the network – and the chair of its advisory board – is Dino Patti Djalal. He is a former Indonesian ambassador to the United States.
Jokowi is looking to the diaspora in Australia to contribute to the network’s overall goals. As he put it
to return their knowledge and expertise back home, and contribute to the development of Indonesia.
In all, the visit was nothing particularly dramatic or surprising. It was just a friendly one – which is how Jakarta and Canberra want it.