Australia-Indonesia Relations – A New Partnership for a New Era

11 August, 2008, Centre for Strategic and International Studies, Jakarta

Introduction

Thank you, Dr Wanandi for your welcome.  

I would like to thank you all for coming, in particular students who have made the journey from universities in Bandung and Jakarta.

I thank the Centre for Strategic and International Studies, your colleagues and Board members for giving me the opportunity to speak about Australia’s relations with Indonesia.

The Centre for Strategic and International Studies has for almost 40 years pursued its founders’ goal of contributing to Indonesia’s public policy debate.

Dr Wanandi, as a distinguished scholar, you have personally played a key role in the Centre’s history.

Through its role as a forum for public education and dialogue, the Centre contributes to Indonesia’s vibrant public political discussion. 

As well, the Centre continues to engage in high quality research, for example, Dr Soesastro’s work on the progress of democratisation in ASEAN Member States. 

In this distinguished setting then, I’m very pleased to be able to set out the Australian Government’s view of the future of the partnership between Indonesia and Australia: A new partnership for a new era.

Geography and history placed Australia and Indonesia together as neighbours.  Today we are much more than that.  Shared values, shared interests, shared challenges, have now seen us become, as Prime Minister Rudd said here in Jakarta in June, ‘inseparable partners’.

With a profoundly changed and changing political landscape and our bilateral relationship at an historic high, Australia and Indonesia are now presented with a unique opportunity to broaden and deepen our partnership in a new era.

The potential for what we can achieve in the future is vast, but let us reflect for a moment on our shared history.

Historical beginnings

I’m delighted to be visiting Indonesia in the week you prepare to celebrate the 63^rd anniversary of Independence.

You have much to celebrate.

Despite enormous diversity you have come together as a unified, increasingly prosperous and stable nation state.

From the very beginnings of a fledgling, independent Indonesia, Australia understood the significance of this vast archipelago for our own nation’s future.

Australia recognised the forces sweeping away colonialism after World War II.  We were bold enough to act to support the emerging Indonesian Republic.

From the birth of independence, we regarded Indonesia as an essential regional partner.

Australia’s Minister for External Affairs, Herbert Evatt, noted to Prime Minister Chifley in late 1945 that Australia hoped:

‘to see the beginning in South Eastern Asia and Indonesia of a co‑operative group of self reliant states linked with other States of the world by ties of trade, legitimate investments and political co-operation and Mutual Aid.’

In 1947, Australia joined forces with a newly independent India to bring the conflict between the Indonesian Republic and the Netherlands before the United Nations Security Council.

Australia did this against the wishes of the United States, the United Kingdom and the Netherlands.

Indonesia nominated Australia to represent its interests on the 1947 Committee of Good Offices established by the Security Council. 

Australia did that diligently and robustly.

That same year, Australia, as a member of the United Nations Security Council, took part in the United Nations Consular Commission to Indonesia. 

The changing landscape

The policy makers of the 1940s would not recognise the Indonesia of today.

We have come a long way since then, including through periods in which we did not always see eye to eye.

In the last decade, a new Indonesian polity has emerged out of a series of significant shocks: the Asian financial crisis, the transition to democracy, and the tragic human cost of terror attacks and natural disaster.

Indonesia is now the world’s third-largest democracy after India and the United States.

An active Parliament and an emerging civil society are both increasingly influential political voices in a fundamentally pluralistic society with an underlying ethnic and religious diversity.

We look at Indonesia and see a vibrant media at the forefront of a vigorous public debate. 

Economic growth, which now exceeds 6 per cent annually, has in recent years delivered broad improvements in living standards.

Indonesia is now a nation increasingly engaged and influential in our region and on the global stage.

The current bilateral relationship

Australia’s relationship with Indonesia is at an historic high.

The Australian Government inherited from its predecessor a bilateral relationship with Indonesia that was in very good shape.

Since taking office we have taken that bilateral relationship to a new level of cooperation.

This is my second visit to Indonesia, the fifteenth Australian Ministerial visit in the eight months since we were elected, including two separate Prime Ministerial visits.

There is much to build on across a broad range of areas, including security cooperation, education links, trade and investment, and development assistance.

Security cooperation

Australia and Indonesia can both be proud of what our cooperation has achieved in overcoming transnational threats such as terrorism, people-smuggling and illegal fishing.

Indonesia has arrested over 440 individuals and successfully prosecuted over 200 for terrorism-related crimes, an unprecedented success by global standards that has dealt a significant blow to regional terrorist networks.

Police have captured key people smugglers and disrupted organised criminal networks that profit from the illicit movement of people across national borders. 

Today, Dr Wirajuda and I agreed we would co-chair a Bali Process Ministerial meeting in 2009 to further strengthen our regional efforts to combat people smuggling.

Joint operations and better coordination have also seen a marked decline in the number of vessels apprehended for illegal fishing in the past year.

The Lombok Treaty, that Dr Wirajuda and I signed into force in Perth in February, an historically significant development in our relationship, is facilitating future growth in bilateral security cooperation.

The Lombok Treaty establishes the modern framework for cooperation between Australia and Indonesia in defence, law enforcement, counter-terrorism, maritime security and disaster response.  The Treaty makes clear that each country respects and supports the sovereignty, territorial integrity, national unity and political independence of the other.

We intend to make very good use of the Lombok Treaty to further strengthen our cooperation.

Regional Disaster Response

The 2004 tsunami, the destruction caused by Cyclone Nargis in Burma, and the recent Sichuan earthquake, demonstrated how badly our region needs stronger disaster response and preparedness, coordination mechanisms and effective disaster warning systems. 

Following the 2004 tsunami, together we set up the Indian Ocean tsunami warning system in 2005.

Prime Minister Rudd and President Yudhoyono at this year’s APEC Leaders’ Meeting in Peru will present a joint proposal to strengthen regional disaster response work, including Indonesia’s idea of a regional centre for disaster management, which Australia is keen to support.

Values that underpin our relations: global and regional partners

Indonesia has emerged from a difficult, decade-long political and economic transition.  As it includes in its focus not only meeting domestic challenges, but looking to the wider region and the world, Indonesia is growing in international influence.

That is a trend Australia very much welcomes.

Ours is no longer a relationship between a donor and a country in difficulty, but a partnership of great potential between two robust democracies which goes beyond the bilateral to the regional and the international.

We both believe in the vital role that regional and multilateral initiatives play in issues like climate change.

My first trip as Foreign Minister was to the Climate Change Conference in Bali, where Australia ratified the Kyoto Protocol.

Australia and Indonesia worked hard together behind the scenes in Bali to ensure a positive outcome for the world.

That partnership on climate change and the environment continues to evolve and prosper. 

President Yudhoyono and Prime Minister Rudd agreed in June to start work on a plan to link forest carbon and global carbon markets.

This important initiative will help persuade people who might normally wish to cut down forests for economic gain to preserve them instead.

To value the carbon stored in rainforests, we need first to be able to measure the carbon.

This is something we can lead the world in.

Our common goal is to have avoided deforestation recognised in future climate change agreements.

Cooperation of this kind sets the tone for our increasingly close cooperation on regional and global issues of concern.

Our ability to work together to pursue common interests on issues like climate change is far more than mere symbolism. 

It is based on our growing recognition that our combined influence in regional and global affairs is far greater than efforts to pursue outcomes independently.

In other areas too our new partnership continues to prosper. 

Our shared participation in the inter-faith dialogue is symptomatic of our mutual respect.  It’s a practical illustration of how differences in religious belief are no barrier to working together as friends.

Australia supports the recent Indonesian initiative to convene the Bali Democracy Forum, which Prime Minister Rudd will co-host with President Yudhoyono. 

A decade ago, of course, we would not have been working together to strengthen democratic processes and institutions in our region.

Twelve months ago, Indonesia and Australia would not have been working together on climate change.

One of the consequences of a close relationship that embraces the many areas about which I’ve spoken today is that you occasionally have differences of opinion.

It’s how you manage these differences that counts.

It is knowing that the fundamentals of the relationship are more than strong enough to absorb and withstand any such differences.

I’m pleased to say we now know that this is unquestionably the case. 

In addition to that we can take this already strong relationship much further.

There is much more that can be done, in trade, security, education and people-to-people ties.

I look forward to the early conclusion to current negotiations on a comprehensive free trade agreement between Australia, New Zealand and ASEAN. 

In the lead up to the target date of concluding negotiations at the ASEAN Economic Ministers – Closer Economic Relations Ministerial in Singapore on 28 August, Australia is involved in intensive bilateral negotiations with key ASEAN countries to finalise tariff and services schedules. 

Indonesia is a key player in this process.  We are looking to Indonesia to make a stronger contribution to a commercially meaningful package of mutual benefit. 

It’s my hope that the feasibility study into a bilateral free trade agreement between Australia and Indonesia will show that both sides stand to gain if we open up our economies more to each other.

Total two-way bilateral trade in 2007 was $10.3 billion and investment $3.8 billion.  But there is significant room for growth in our economic partnership if we do more to remove barriers to trade.

Enhancing investment should be a focus.  Australian business welcomes the recent comments in Melbourne by Indonesia’s Coordinating Minister for Economic Affairs, Dr Sri Mulyani Indrawati, that the Government would seek to encourage regional governments across Indonesia to remove the regulatory and other impediments faced by foreign mining companies.

Indonesia’s Development Challenges

Indonesia’s development challenges remain acute.

Almost one half of the population of 225 million live on less than $2 per day.

The challenge of building the nation’s infrastructure is immense.

In all challenges, Indonesia can count on Australia to work with it as a friend and as a partner.

The decision by former Prime Minister John Howard in late 2004 to contribute $1 billion for the post tsunami reconstruction package was a significant modern starting point.

While our development partnership with Indonesia initially grew sharply as a result of our post-tsunami assistance, it has not only been maintained but expanded since.

Over the next five years, Australia will provide up to A$2.5 billion to assist Indonesia in tackling poverty and in achieving its social and economic development priorities.

The Australia Indonesia Partnership has grown to nearly half a billion dollars this year and is Australia’s largest development assistance program.  We provide more grants to Indonesia than any other donor.

We are committed to working in partnership with Indonesia to meet the Millennium Development Goals and help create a better life for the poorest in Indonesia.

One of the flagship projects of our partnership is a A$300 million plus program to improve hundreds of kilometres of national roads and bridges in ten provinces across eastern Indonesia.  I announced earlier today that tenders will be issued this month kicking off the construction process.

As a result, farmers will as a result enjoy better access to markets.  Communities will have better access to schools and clinics.

We have a wide range of advisers working in government agencies and assisting their Indonesian colleagues in the essential task of structural reform.

These reforms are critical in attracting further capital investment to achieve the levels of growth required to make enduring inroads into poverty.

The cooperative work we’re doing in education is of fundamental importance, not just to support Indonesia’s development but to ensure future generations of Australians and Indonesians know and understand each other better. 

A key element of this cooperation is in Education.

The Australian Government awards 300 development scholarships to Indonesian students each year.  This program is designed to do more than simply help them enhance their qualifications.  Scholarships like these are an investment in the relationship between the Australian and Indonesian people.

These Indonesian alumni of Australian universities make a substantial contribution to Indonesia on their return and from Australia’s perspective they become our Ambassadors for life.

When Dr Wirajuda’s visited my hometown Perth earlier this year, I invited him to accompany me to my old high school where he spoke to a class of Australian students learning Bahasa Indonesia.   

Tomorrow I am making a return visit when Dr Wirajuda and I will fly to Makassar in South Sulawesi to open a junior high school.

The opening will mark the halfway mark of an ambitious project, under the Australia-Indonesia Partnership, to build or expand 2000 high schools across 20 provinces by the end of 2009.

Australia is funding this program to help Indonesia fulfil its vision that all young Indonesians will have nine years of basic education. 

Our construction alone will create some 330,000 new places in junior high schools, including in some of the Indonesia’s poorest and remote areas.

Australia is also funding training for teachers.  We’re strengthening our education partnership through a new program to bring together Australian schools and Indonesian schools, classroom to classroom, to help young Australians speak Indonesian.

Indonesian teachers will visit Australian schools, and teachers and students in both our countries will communicate over the internet.

This new school twinning program complements our program of over $60 million to boost the study of Asian languages in Australia.

There are currently around 15,000 Indonesians studying in Australia.  Australia remains the most popular destination for Indonesian students, attracting one-third of those who choose to study overseas.

Enhanced people-to-people links will help ensure that Australians are better placed to see Indonesia through new eyes, and vice versa.

Last week we agreed on a Work and Holiday Visa arrangement to allow young Indonesians and Australians to experience each other’s country through travel, work and study for up to 12 months.

This initiative will further deepen the already substantial people-to-people links between both countries through enhanced cultural experiences for our future leaders.

We need not only greater exchange between our academics, but also greater numbers of young Australians studying Indonesian and studying about Indonesia.

The Australian Government-funded program[1] for accredited courses at universities in Central and East Java is slowly producing a small but expert pool of next-generation Australian Indonesia specialists.

So far, it has taken on fewer than 100 Australian students per year.  We’d like to see it expand to include more universities in eastern Indonesia and more fields of study.

Conclusion

I’ve spoken today not only about shared values, but about practical examples of shared endeavour and achievement.

I have sought to give you a sense of the opportunities that exist for Australia and Indonesia to work together for our mutual benefit.

They are very diverse.  They include collaboration on international security and transnational issues; on climate change; on promoting better governance in our region; and simply deepening the all-important ties between our young people and teachers.

As Indonesia’s democracy consolidates further, as economic strengths are realised through economic reform, and as your voice in regional international affairs becomes even stronger, we see a genuine partnership with a neighbour and friend. A partnership that continues to expand into new areas and helps underpin the security and prosperity of both our nations.

Thank you.

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