Australia's Indonesia Country Strategy: business and states roles in relationship

Echoing the 1994 'Go North' declaration of then Australian prime minister, Paul Keating - "No country is more important to Australia than Indonesia. If we fail to get this right, and nurture and develop it, the whole web of our foreign relations is incomplete" - the Australian government's 2013 Indonesia Country Strategy paper released last month identifies Indonesia as "a rising regional power and an emerging global player. Combined with its geographic proximity to Australia, this makes Indonesia a vital strategic partner in the Asian century."

The 25-page document takes forward the objective of the Australia in the Asian Century White Paper: "for Australia to build stronger and more comprehensive relationships with countries across the region." Indonesia is one of six identified as the initial priority countries for the development of country strategies.

Consultations to develop the strategy were held from 4 April to 31 May 2013 during which a task-force completed face-to-face consultations in each state and territory capitals, met all state and territory governments and engaged with business representatives, community and academic stakeholders. Consultations were also held in Indonesia and in regional Australia. In all, 1,300 Australians attended meetings, round-tables and public forums. The task force also received over 250 formal written submissions.

The report noted that two-way trade between Indonesia and Australia remains low – "Indonesia is only our 12th-largest trade partner" - that the study of the Indonesian-language in Australian schools is in decline, and that the "Australian public’s perception of Indonesia has been characterised by a lack of knowledge on the country."

It highlights two pathways, applying across the community, business and government sectors, to achieve "Australia’s goals towards 2025": (1) "more Australians need to be ‘Indonesia-literate’ ... This includes building Indonesian language skills and an informed appreciation of Indonesia’s economy, politics, culture and society" and (2) "we need to make travel between Australia and Indonesia easier for business, education and leisure purposes. This will help build awareness of Indonesia in Australia and create more people-to-people links."

For commerce, the strategy envisages an integrated approach through a "government-business dialogue to look at ways to build Indonesian capabilities and awareness of the country in the Australian business community." This would include "better use of business media to raise awareness of business opportunities in both countries", promoting the "integral role of business councils and chambers, including their role in providing supporting infrastructure for small to mediumsized entities to do business in Indonesia" and concluding the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA).

The strategy also calls for closer relations between Australian states and territories and a rapidly decentralising Indonesia: "We need to develop a network of sub-national relationships between Australia and Indonesia, including more vigorous sister-city and sister-state arrangements . These will help smaller local governments, businesses and communities forge practical and productive links with their counterparts in Indonesia."

Business organisation grants

27 member-based Australian business organisations have been awarded grants to help them expand their networks in Asia. The four-year, $6 million Business Engagement program, announced as part of the Australian government’s White Paper on Australia in the Asian Century, is Austrade-administered.

The Australia Indonesia Business Council (AIBC), chaired by former senior Austrade official Rod Morehouse, was awarded an undisclosed amount to "strengthen high level business engagement with Indonesian business and government across sectors of growth." The AIBC's Indonesian counterpart, the Indonesia Australia Business Council (IABC), has not yet been consulted on any joint activities.

Training an Asia capable workforce

A new National Centre for Asia Capability is to be established by The University of Melbourne and the University of New South Wales (UNSW Australia) in a collaboration between business, government, philanthropy and the tertiary sector.The Australian government will contribute $36 million over 10 years to the $60 million budget. The Centre will combine the expertise of government, business and universities to build an Asia capable workforce through training programs, research and the development of regional networks. Asialink, which has been working for more than 20 years to build Asia capability, will oversee the establishment of the Centre with hubs in Melbourne and Sydney.

Monitoring Indonesia

The Australian government is also providing $10 million to the Lowy Institute for specialised research, dialogues and partnerships to strengthen the institute’s focus on Asia and increase its presence in the region. The institute’s Engaging Asia Project will have an early focus on Indonesia, which is one of Australia’s most important neighbours, and will raise Indonesia’s public profile in Australia. The Australian Government will be seeking the institute’s expert input through new research on the Australia-Indonesia relationship, the Indonesian economy and Indonesia as an emerging foreign policy participant in the region.

People-to-people potpourri

OzFest Indonesia, a 3-month long festival of "Australian culture, art, science and technology and sport" will take place in major cities across Indonesia from January to April 2014. The festival will "showcase a dynamic and contemporary Australia to Indonesia, and further build people-to-people links" between the two countries. Indonesian staff are being recruited by the Australian embassy in Jakarta. In 2010, a one-month OzFest was held in Jakarta, Yogyakarta, Surabaya and Bali. It was funded by the Australian government, including through the Australia-Indonesia Institute and Australia International Cultural Council.

New government data

The Australian department of Foreign Affairs and Trade has released the latest versions of its Country and Region Economic Fact Sheets for Indonesia and the Association of South East Asian Nations (ASEAN). They provide a snapshot of each economy and their trade and investment relationship with Australia and the rest of the world.

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