Tuesday, August 13, 2013

Australia's regions accelerate trade missions to Indonesia and official offices

The bilateral work of the Australian embassy in Jakarta and its lead trade and investment agency Austrade (Australian Trade Commission) will be enhanced by the recent Indonesian approval of new or expanded Australian state representative offices in Jakarta and increasing state and territory trade missions to Indonesia.

As the Indonesia Australia Report outlined in February, the establishment of the new services faced delays until the Indonesian Department of Foreign Affairs updated permitting procedures covering foreign sub-national government missions in the country.

The Australian government's Indonesia Country Strategy was released by Prime Minister Kevin Rudd during his July visit to Indonesia for meetings with President Susilo Bambang Yudhoyono. Two-way trade in goods and services reached $14.6 billion in 2012, making Indonesia Australia's 12th largest trading partner. 

Closer relations between Australian states and territories and a rapidly decentralising Indonesia were welcomed in the Australian government’s recent Indonesia Country Strategy (based on its 2012 White Paper on Australia in the Asian Century) as an impetus to forging “practical and productive links” with Indonesia’s regional administrations.

However commerce, rather than national strategy, has been the key catalyst for the renewed state and territory interest in Indonesia: Indonesia’s impressive economic growth, its regional development since decentralisation in 2001 and still to be resolved bilateral trade issues, particularly the Indonesian reaction to the Australian government’s unilateral suspension of live beef exports in 2011.


The West to strengthen its relationships

WESTERN AUSTRALIA is the only state or territory to maintain a continuous presence in Indonesia over the past two decades. It signed a sister state/province MOU with East Java in 1990 and opened a trade and investment office in Surabaya in 1992 (relocated to Jakarta in 1999).

WA is expected to expand its Jakarta office with more staff seconded from state instrumentalities, including Tourism WA. A decision is also pending on the official appointment of a new regional director.

With Indonesia the “number one trade destination” of Western Australian agri-food products, the cattle export suspension has been high on the agenda of the state government and the focus of many ministerial visits to Jakarta since 2011.

WA Agriculture and Food Minister Ken Baston in Lampung province, Indonesia, viewing WA cattle held in an Elders-owned cattleyard. (Source: The Land)

Last month WA’s new minister for agriculture, Ken Baston, met with key Indonesian ministries, agriculture industry companies and food importers and visited feedlots in Lampung province. As a result, the WA Department of Agriculture and Food is preparing a strategy to work towards assisting Indonesia's desire for food security and investment.

As Australia’s largest mining region, Western Australia has regularly highlighted its Mining Equipment, Technology and Services (METS) sector in Indonesia at trade exhibitions and conferences - including sponsoring Austrade's annual Ozmine expo in Jakarta. The state’s Department of Mines and Petroleum has also built a relationship with the Provincial Energy & Mining Association which represents the mining offices of Indonesia’s 34 provinces.

In September the mines department, with the Department of State Development, will host a breakfast seminar alongside the Mining Indonesia exhibition in Jakarta to showcase participating WA METS companies.

WA is also progressing its relationship with East Java. Since sport was added to the cooperation program in 2008, commencing with innovative soccer and basketball exchanges, the state’s Department of Sport and Recreation has been assisting East Java with sports science capacity building and will sign a Letter of Cooperation in Perth later this month.

Autism WA is assisting East Java in training personnel in autism support. The first group of trainees and a senior provincial government delegation will visit Perth in September.


Queensland addresses Indonesia and ASEAN markets

QUEENSLAND announced last month that it has received permission from the Indonesian Department of Foreign Affairs to reopen its Trade and Investment Queensland office in Jakarta.

Alongside a high-level Jakarta briefing for visiting Queensland businesses, with presentations by Bakrie Group, Saratoga Capital and CT Group, Queensland Treasurer and Minister for Trade, Tim Nicholls, said the new facility (expected to be in ANZ Tower, adjacent to a new University of Queensland office) "will play a crucial role in rebuilding the [state's] long-standing relationship that was so badly damaged by the federal Labor government’s ban on live cattle exports."

Celebrating Garuda Indonesia's first Denpasar-Brisbane flight: (l-r) Greg Moriarty, Australian Ambassador to Indonesia; Adhe Rassat, Garuda Manager Sales for South West Pacific, Tim Nicholls MP, Queensland Treasurer and Minister for Trade, Suranto, Garuda Vice President West Indonesia Region. (31 July 2013)

The state’s Minister for Agriculture, Fisheries and Forestry, John McVeigh, who visited Indonesia in May, said Queensland’s live cattle exports, worth $121 million in 2008-09, had evaporated “virtually overnight” following the federal government’s action. However the state maintains other major agricultural exports to Indonesia including, annually, cotton $121 million, wheat $115 million, chilled beef $51 million, fruit $8 million and vegetables $6 million.

The office in Indonesia will be led by a Trade and Investment Commissioner, who will also be responsible for all of ASEAN, an increasingly powerful trading bloc with which Australia has a Free Trade Agreement. A three-person marketing team will focus on the Indonesia market, particularly education, agriculture and the Mining Equipment, Technology and Services (METS) sector.

Mr Nicholls noted that “New South Wales attracts almost ten times as many Indonesian students as Queensland. Having an on-the-ground presence will help raise awareness of the exciting educational and lifestyle opportunities on offer in Queensland.”

In February 12 tourism operators participated in Queensland’s first tourist trade mission to Indonesia. The state’s Minister for Tourism, Jann Stuckey, said the program was timely following Garuda Indonesia’s decision to commence a new daily Jakarta-Bali-Brisbane service. “These flights will provide direct access for the influential Indonesian business market and will increase Queensland’s connections with Asia,” she said.

Queensland had a significant presence in Indonesia during the 1990s with trade and investment offices in both the national capital Jakarta and Semarang, the capital of Central Java province. Mr Nicholls confirmed that Queensland renewed its 22-years-old sister state/province relationship with Central Java in March and will re-invigorate the relationship.

In November 2000, a Queensland trade mission to Jakarta, led by then premier Peter Beattie, was the first Australian government delegation of any level to meet with the Indonesian government following the political freeze resulting from the Australian-initiated UN INTERFET  intervention in East Timor after its pro-independence vote in 1999.

The delegation's meetings with then Indonesian president Abdurrahman Wahid, vice-president Megawati Soekarnoputri, and Minister for Mines and Energy, Susilo Bambang Yudhoyono proved valuable to the national interest in re-setting the bilateral agenda.

However in 2009, a cash-strapped Queensland Labor government closed its Jakarta office, reportedly the state’s “most profitable Trade Queensland office”, and Austrade was contracted to maintain a special interest desk for the state within its Jakarta post.

Queensland's renewal of direct relations with Indonesia is one of the major recommendations of the comprehensive 2013 review of Trade and Investment Queensland by Geoffrey Thomas and John Mickel and implemented by TIQ CEO, Rob Whiddon.

The Queensland government also endorsed TIQ becoming a statutory body from 1 October 2013, taking the lead role in the promotion and attraction of Foreign Direct Investment, being the designated lead agency for promotion of Queensland’s international education and training sector, focusing on Queensland small-medium enterprises as the key client group for TIQ export activities and maintaining a broad client spectrum for TIQ’s investment function.


Victoria highlights its presence with Super Mission

VICTORIA made good its promise to bring a ‘super trade mission’ to Indonesia in June. Lead by premier Dr Denis Napthine, the first Victorian premier to visit Indonesia in nearly 15 years, some 300 Victorian firms and 450 delegates travelled to Indonesia and four other South East Asian nations, representing aerospace and defence, automotive, aviation, cleantech, education, food, health and aged care, ICT, tourism, urbanisation and infrastructure, wealth management and project finance and wine sectors.

Dr Nathan took the opportunity to officially announce that the Victorian Government Business Office will be reopened in Jakarta, at the World Trade Centre.  The previous office operated from October 1994 until June 2002. No information is yet available on the appointment of a trade commissioner and staff and when the office will be open for business.

Victorian Premier Dr Denis Napthine (r) 'soft launches' the new Victorian Government Business Office in Jakarta. (l-r) Greg Moriarty, Australian Ambassador to Indonesia, Sabam Siagian, former Indonesian Ambassador to Australia and Irmawan Emir Wisnandar, Indonesian Consul-General in Melbourne. (18 June 2013)

“Indonesia’s economy is expanding rapidly, and has been growing at a rate in excess of six percent each year for the better part of a decade … Unfortunately the previous Labor Government closed the VGBO in Jakarta in 2002 just as this enhanced period of growth began to accelerate.  The Coalition Government is committed to re-establishing this relationship and facilitating positive relationships between Victorian businesses and the Indonesian market,” Dr Napthine said.

The new office will focus on infrastructure and urban development, food security, and education and training and this was reflected in the Super Mission’s high profile events:  a High-level Forum on Liveable and Sustainable Cities was held in parallel with a separate Premier’s Roundtable on Infrastructure; a Banking and Capital Markets Seminar was conducted with Bank Bandiri;  a tourism trade luncheon showcased Melbourne’s style through food and wine, fashion, events and tourism;  a  VET and Industry Skills Training Forum was held in Jakarta and a Research Symposium - Linking Higher Education and Industry was held  in Jakarta and in Yogyakarta;  and a Dairy Industry Capability Workshop was conducted in Bandung, and a  Dairy Australia seminar and an Agribusiness Round Table held in Jakarta.

The Victorian Connection - a broad based group open to alumni and other persons with links or connections to Victoria - was inaugurated and Dr Napthine advised that the Victorian Government will soon release its International Education Strategy, which will include the appointment of an Education Service Manager in Indonesia.

State funding of up to $200,000 was announced to support a new Victoria-Indonesia Leadership Development Program, to be delivered by Monash University and Universitas Gadjah Mada, “to provide opportunities for emerging Victorian leaders to boost their professional links and cultural understanding of Indonesia.” The initiative will “see 100 aspiring leaders – 50 from Victoria and 50 from Indonesia – participate annually in an intensive executive training program.”

Dr Napthine also announced the extension of Hamer Scholarships to Indonesia to support up to 50 Victorians each year for four years to undertake intensive Indonesian language study and cultural immersion at an Indonesian university.

The state will also invest around $1 million to encourage Victorian students to learn the Indonesian language and give them the opportunity to study in Indonesia. This will include increasing the number of cultural learning programs in schools in Victoria, providing the opportunity to study abroad for junior high school students, and appointing Indonesian language lecturers to provide outreach to schools and teachers.

During the Super Mission Victoria’s Minister for Agriculture and Food Security, Peter Walsh, visited Bandung and co-signed a Letter of Intent with the Vice Governor of West Java province, Deddy Mizwar,  to further develop each region’s agriculture industries.

“A clear message was that the goal for West Java, which has a population of 44 million, is to increase the number of dairy cows and their daily milk production … There is a major opportunity for Victoria to assist West Java Province in boosting dairy production levels by exporting Victorian heifers, which have strong genetics thanks to world-class research and extension work by the Department of Environment and Primary Industries,” he said.

Over the past two years the Victorian government has supported trade missions of Victorian Mining Equipment, Technology and Service sector (METS) companies to Austrade's annual Ozmine expo in Jakarta. In a recent Austmine survey (pdf) of the Australian METS sector, Victoria was noted as the state with the highest portion of participants exporting.

At Ozmine 2013, the Melbourne Mining Club hosted a breakfast seminar, addressed by Owen Hegarty, Executive Vice President of G-Resources Group, that reviewed Victoria's historic role in Australian mining and its connections with Asia. Representing the Victorian government, Adrian Panow, Director Projects - Investment at the Department of Environment and Primary Industries, invited Indonesia companies to attend the Mines & Money Australia conference which Melbourne will host during  29 October - 1 November. A one-day Mines, METS and Money seminar will run parallel on 29 October, focussing on "innovation, cost cutting, and process improvement".


NSW researching its first office in Jakarta

NEW SOUTH WALES has never had an office in Indonesia, but it maintained for many years a sister state/province relationship with the Jakarta Capital province (DKI).  This came to an abrupt end in 2007 when NSW police ”let themselves into” the Sydney hotel room of then Jakarta governor Sutiyoso “to seek his appearance at the Balibo inquest into the deaths of five Australian newsmen in East Timor in 1975”.

Mr Sutiyoso later accepted a letter of apology from the office of then Labor Premier, Morris Iemma. The letter expressed regret over the incident - which had occurred during Mr Sutiyoso's official tour at the state government's invitation.

In April this year, NSW’s Deputy Premier and Minister for Trade and Investment, Andrew Stoner, announced that the state’s “first whole-of-government approach to growing international trade and investment activities” recommended expanding its priority markets from six to ten – including Indonesia.

NSW Deputy Premier and Minister for Trade and Investment, Andrew Stoner

The NSW International Engagement Strategy, developed by a steering group led by Warwick Smith, Chairman of ANZ Bank Limited (NSW & ACT) and Chair of the NSW Export and Investment Advisory Board, identified Indonesia as the “eighth largest recipient of merchandised exports from NSW”.

The NSW Department of Trade and Investment, Regional Infrastructure and Services is planning a new trade and investment office for Indonesia with the strategy to be “complete by the end of 2013”. DTIRIS overseas offices  are “typically two to three person offices headed up by senior local managers with extensive regional market knowledge, strong networks and business contacts in priority industries“.

The government will also review all of NSW's sister-state or sister-city and international friendship agreements, including checking to see which agreements have "lapsed or become moribund".

A NSW trade mission to Indonesia is planned for later this year.


Tasmania's first Trade Mission

TASMANIA, Australia’s smallest state, has identified Indonesia as its “ninth largest trading partner with merchandise exports valued at $111 million”.

The state’s premier,  Lara Giddings, will lead a trade delegation of Tasmanian business and industry representatives to Indonesia in September.  The mission will include business-to-business meetings, industry briefings, networking functions, promotional and media opportunities.


Canberra businesses highlight their capabilities in Indonesia

AUSTRALIAN CAPITAL TERRITORY, the seat of the Australian federal government, conducted its first ever trade mission to Indonesia during 20-24 April. Led by ACT Deputy Chief Minister, Andrew Barr, the delegation highlighted the ACT's “significant competitive strengths in areas including international education, knowledge intensive business services, ICT, and corporate and public sector governance.”


Neighbourhood role for the Northern Territory

NORTHERN TERRITORY was a pioneer in establishing a formal presence in Indonesia. In 1986, after signing an MOU with the Indonesian national government to “seek out mutually beneficial  development and trade opportunities in the eastern part of Indonesia”, the NT established a representative office in Jakarta and appointed  the late Drs Frans Seda, a highly decorated former Indonesian minister, ambassador and government advisor, as its representative.

Drs Seda served in the position until 2001. The NT government has since made no announcement on a new representative office but maintains a multitude of trade and cultural relationships with Indonesian national ministries, provinces and municipalities.

Last year, then Chief Minister Terry Mills stated that the NT government planned to establish “an Australia-Indonesia forum conducted at Charles Darwin University, where senior figures from both countries will meet and develop ideas.”

As the federal government’s ban on live cattle exports had hit the NT economy hard, Mr Mills remarked that “the Commonwealth still has plenty of work to do to convince Asia it is serious about improving links – the ban on live cattle exports to Indonesia eroded trust in the region and undermined confidence … It is no coincidence that my first overseas visit as Chief Minister will be to Jakarta.”

Indonesian animal husbandry student Safitri, 20, taking part in an industry exchange program on Lakefield Station, Northern Territory. (Source: The Age)

In March this year the Northern Territory Cattlemen’s Association (NTCA) signed an MOU with the Indonesian Society for Animal Science to establish a three-year Indonesia Australia Pastoral Industry Student Program to “foster good and sustainable practice in animal welfare and production in order to cater for growing demand and efforts to improve local production and beef self-sufficiency, particularly in Indonesia.” The program is supported and funded by the Australian Centre for International Agricultural Research, the federal Department of Regional Australia (Office of Northern Australia), Meat and Livestock Australia, and the Northern Territory Government.


South Australia's forgotten market

SOUTH AUSTRALIA’s 6th largest export market is Indonesia, but the state has been accused of treating it as a “forgotten market”.  In January, the state’s Labor government was reported to have “quietly closed overseas trade offices in Chile, Vietnam, Singapore and Dubai” leaving open only offices in China and India.  Liberal Opposition Leader, Steven Marshall, noted that the policy meant the state is “missing out on areas with potential such as Indonesia."

In the 1990s South Australia’s representative office in Jakarta brokered a relationship between the state and West Java province.  A South Australia - West Java Business Council was established and, in 1999, the province signed a legally binding decree giving South Australia, through SA Water, the lead role in overhauling the its water and sewerage treatment. In 2002, SA Water withdrew from the Systems Manager Agreement.


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1 comment:

Heath McMichael said...

Well done on this effort to profile the efforts of States and Territories to build the commercial relationship with Indonesia. We have come a long way since WA opened the first state or territory trade office in Indonesia in Surabaya in 1992 and we are very fortunate to have various jurisdictions in Australia working hard to promote business links with our northern neighbour. I look forward to further news on this blog about the various initiatives (WA, Victoria, NSW, Qld)to build links with Indonesia.

Heath McMichael
Department of Foreign Affairs and Trade
Canberra.