Indonesia-Australia: A young Indonesian perspective

By Made Bimantara

 

The Odd Couple was a 1968 classic comedy film starring Jack Lemmon and Walter Matthau who played Felix and Oscar: two men with clashing personalities living together in a Manhattan apartment. Felix has an obsession with cleanliness while Oscar is a sloppy fun-loving individual.

In the past, the Australia-Indonesia relations have been characterized as the “odd couple”. Australia is a western country with an advanced economy and a prosperous population of 23 million. By contrast, Indonesia is a country with ancient civilization roots, an emerging economy with 240 million people, with a middle class of about 45 million.

But are we that different? If we are, does it damage the relationship more than benefit it?

Browsing through the headlines in the Australian and the Indonesian media over the past few weeks, the news coverage in the former has been much more intense than in the latter and it seems the bilateral relationship is abysmal. But on the contrary, Australia and Indonesia are enjoying a level of cooperation that is deeper and closer than ever before.

Imagine the progression of the relationship on a chart, with the horizontal x-axis as years, and the vertical y-axis denoting elements such as cooperation on trade, investment, security, borders and development.

From the 1940s until today, the graph will show an upward trend, with ever growing two-way trade and investment, more Indonesians studying in Australia, many more Australian tourists coming to Indonesia, and a much closer and more intense military and police cooperation. Indonesia and Australia have built strong people, business, education, community and government links.

The graph will also show sharp spikes that explain the many ups and downs of a normal relationship. But, over the years, the governments of both countries from all political persuasions have done a great deal to build the bilateral architecture up brick by brick.

Australia was among the first countries to back Indonesia’s independence movement, at a time when colonial powers were conspiring to hold on to their colonies. And in the present era, Australia’s response to assist Indonesia after the 2004 tsunami touched the hearts of ordinary Indonesians and was nothing less than exceptional.

Tim Lindsey from the University of Melbourne also pointed out that President Susilo Bambang Yudhoyono’s strong support was crucial for Australia in gaining a place at the ASEAN table. Then there was the significant joint role of the governments of former prime minister Keating and former president Soeharto in Bogor 19 years ago to open the Asia Pacific region for trade and investment.

This is the APEC legacy that is again proving its worth by providing the framework to sustain economic growth in the region despite a weakened global economy.  In the security field, a solid police collaboration between the two countries helped Indonesia prosecute hundreds of terrorists.

In light of the most recent boat disaster that left 36 asylum seekers dead, including women and children, and more than 20 people missing presumed drowned off the coast of Java, both countries are aware of the need to quickly resolve the issue. During Prime Minister Tony Abbot’s first overseas visit and first state visit to Indonesia, he agreed with Yudhoyono that both countries were victims of people smuggling.

At the heart of it is the humanitarian tragedy that is forcing men, women and children to take desperate measures to escape dire circumstances. The Australian and Indonesian government agencies are working hard both bilaterally and regionally, through the Bali Process initiative, to end this.

For Australians, people smuggling consistently remains high on the news agenda. For Indonesians human trafficking often dominates the media.

The International Organization of Migration (IOM) estimates that 43 to 50 percent (3 - 4.5 million) of Indonesia’s expatriate workforce are victims of trafficking, living in conditions of forced labor and debt bondage. To a lesser degree, Indonesia is also a destination country for trafficking.

How Australia, Indonesia and other countries in the region and the countries of origin deal with these challenges will be remembered much longer than the hype surrounding an election cycle or a 24-hour news round.

Although Australia and Indonesia enjoy good relations across a wide spectrum of sectors, recently Bali, boats and beef (“three Bs”) are dominating the news in Australia.

Ross Taylor, the chairman of the Indonesia Institute based in Western Australia, commented that those three issues, coined on ABC’s recent program in Jakarta, “suck the oxygen out of larger and more significant issues facing our two countries”.

Despite the “three Bs” getting all the attention and the differences between the two neighbors being overblown by the media, mutual interests will keep supplying the bricks and mortar for the bilateral structure.

According to Michael Wesley, professor of international relations at the Australian National University, Australia’s and Indonesia’s core interests are mostly aligned. Both seek stability and sovereignty in the Indo-Pacific Peninsula, as well as economic development with an open trade and investment regime.

Though some still see the two countries as the “odd couple”, Australia’s and Indonesia’s common interests, vibrant democracies and free press are bringing us closer together. At the end of the movie, Oscar and Felix make amends, and recognize that positive traits of each have rubbed off on the other. They realize that each is a better person now and their relationship has evolved into a true friendship.

Made Bimantara is assistant special staff to the President on international affairs. The views expressed are personal.

 

Cultivating farm partnerships with Indonesia would help us, Jakarta, and the region

 By Ross B. Taylor AM

Tony Abbott has, depending on which way you look at it, simply capitulated to his Indonesian hosts during his recent visit to Jakarta, or exercised great humility and pragmatism towards a country that will play an enormous role in our region in the future. 

Within Indonesia it is being seen as the latter, and that can only be a good thing for both countries. But now that our prime minister has formally acknowledged Australia’s mistakes in the handling aspects of the bi-lateral relationship, the issue is whether Indonesia needs to do the same. 

Indonesia was right to feel very aggrieved over Australia's handling of the live cattle export crisis, and also annoyed at some of the more 'radical' policies from our then Opposition suggesting Australia could pay Indonesian village wardens to 'dob-in' people smugglers, and buy back fishing boats, so it was important that Prime Minister Abbott acknowledged the harm that has been done. 

The real challenge now is for Indonesia to acknowledge some of the key issues facing its people - at the start of what will be a very 'robust' election cycle where nationalism is on the rise – and to recognise that Indonesia also has taken actions that have worked against its own best interests, including building closer relations with Australia and the region. 

Indonesia with a fast growing middle-class – estimated to rise from the current level of 45 million people to 135 million in 2030 – faces enormous challenges in a number of critical areas including infrastructure, energy, education, health and in general business where Indonesia could 'partnership' with Australian companies to improve living standards and opportunities for their country.

 

There is perhaps no greater example of where a partnership approach with Australia could prove highly successful than within the agriculture sector. 

Indonesia's agriculture sector enjoys superb soils, abundant rainfall of plenty of labour; already employing 41 million people. The productivity of farms however, is extremely low with farmers generating around $3,000 per year per farmer compared to $9,000 in Malaysia for example. Over 70% of all fresh produce found in Indonesia’s major supermarkets is imported. 

A recent McKinsey Report showed that Indonesia, on current projections, would produce around 185 million tonne of food by 2030. Yet with improved productivity that figure could be 310 million tonnes each year, providing not only enough food for Indonesia's growing and increasingly wealthy population but also - and this is the key point - being able (with Australian partners and branding) to add-value and export ‘surplus’ foods to third-party countries in the Middle-East and Asia.

But to do this, Indonesia has to acknowledge that government red-tape and bureaucracy, including a policy of increasing tariffs designed to protect poor agriculture practices, will only hold back the huge and necessary structural change that must be implemented in this sector.  

So why is Indonesia’s food growing sector so unproductive? Indonesia lacks investment and expertise in rural infrastructure, training of farmers, cold supply chains, technology, irrigation, farm management and also access to good quality seed. Australia is  very good at all of these things; in fact Australia is arguably the best in the world, so why not put our knowledge and skills together with Indonesia's soil, rainfall, abundant labour and strategic location, so that both countries win? 

If Indonesia can work with Australia to transform their agriculture sector, the impact will be enormous for both countries. Indonesia doesn't really have a choice if it wants to feed its growing middle-class in the future and Australia is perfectly placed to partner our neighbour in this critical area.  

We should start with the cattle industry whereby Indonesia is now buying into our breeding cattle stations, and Australian companies are being encouraged to take an interest in feedlots and processing companies in Indonesia. It makes good sense, and together we can meet Indonesia’s beef production needs well into the future whilst building a strong base for Australia-Indonesia ‘added value’ produce to be exported around the region. 

So following Mr Abbott's visit, the 'challenge' is now only for Australia, but with Indonesia to open-up this critical and large – but poor, over regulated and unproductive – agriculture sector, and in doing so create opportunities for business to form highly valuable partnerships. 

The agriculture ‘model’ can also apply to other critical areas facing Indonesia including the resources sector, financial services, and manufacturing. It won’t be easy. Doing business in Indonesia is not simple with at least nine ‘procedures’ and an average of 33 days just to establish a commercial entity in Indonesia.  

The opportunities for Australia and our northern neighbour to substantially increase two-way trade and investment are enormous, but it will need Australian companies to recognise and act on these opportunities that exist on our doorstep. 

 It will however, need Indonesia to address the ‘barriers-to-entry’ that often act as a significant deterrent to doing business in Indonesia, including protectionist policies, inconsistent regulations and an unwieldy bureaucracy.  

This will be the challenge for the incoming president and government over the next 12 months at a time when the indications are that politics in Indonesia is being dominated by ‘economic nationalism’. 

My comments are not meant to present an opinion that is ‘sombong’ towards a country that - as a young man - stole my heart, but rather as constructive suggestion as to how Indonesia can build on its truly amazing transformation, since the end of the Suharto reign, and realise the dreams and aspirations of its people.

 

Ross B. Taylor is the chairman of the Indonesia Institute (Inc). This article  appeared in 'The Weekend Australian' newspaper on 12-13 October 2013.