Australian Prime Minister Malcolm Turnbull visits Tanah Abang, Central Jakarta, with President Joko Widodo at the end of last year. (Reuters Photo/Adek Berry)

Commentary: A Modern Partnership for Indonesia and Australia


SEPTEMBER 13, 2016

The need for a modern Australia – Indonesia partnership was emphasized in Yogyakarta last month with the holding of the Third Indonesia – Australia Dialogue.

The Indonesia – Australia Dialogue was introduced in 2010 as a second track bilateral dialogue to enhance people to people links between our two countries.

The Dialogue provided a forum for frank discussion about the essential need for closer cooperation between Australia and Indonesia, Australia's nearest Northern neighbor. It also allowed a strong case to be made for Australia and Indonesia to together play leading roles in promoting regional innovation and investment.

That leadership can begin by strengthening supply and value chains and investment ties between Australia and Indonesia, which for such close neighbours frankly remain weak.

The resumption of negotiations for the Indonesia – Australia Comprehensive Economic Partnership Agreement (IA-CEPA), revived recently by our respective Trade Ministers after a three year hiatus, provides the opportunity to both do this and look to the future for additional economic opportunities.

Both our countries continue to witness social, economic and technological change: we should take advantage of these changes, and focus on innovation, technology, and research opportunities. There is tremendous opportunity for Australia and Indonesia to cooperate in new areas, as diverse as film, graphic art, fashion, and technological innovation, digital health, and cybersecurity in addition to traditional economic cooperation such as agriculture, tourism, and students.

Australians and Indonesians are both early adopters of new technology. Indonesia’s population of 250 million versus Australia's 25 million presents a great Indonesian marketplace for Australian start-ups and technology companies. By working with local Indonesian partners, Australian innovators can take advantage of Indonesia’s size and proximity to incubate new technologies.

Our goal must be to increase mutual Australia – Indonesia investment. By the midpoint of this Century, Indonesia will be the fourth largest economy in the world after China, India, and the US.

Our North Asia partners: Japan, Korea, and China are already active in Indonesia, laying the groundwork for future Indonesian investment flow to North Asia.

We now must start the job of ensuring that Indonesian investment also flows south to Australia. A modest investment now, from Australia’s perspective, opens up the opportunity for collaboration in a whole range of areas for decades to come.

This is a major task for Australia. The Dialogue earlier last month provided such a forum to progress these essential tasks.

UWA Professor of Law Stephen Smith is former Minister of Foreign Affairs, Trade and Defence. He is the Chair of the Perth Law Firm Lavan Legal’s Asia Desk and is a Board Member of the Perth USAsia Centre. Professor Smith was part of the Australian Delegation to the 3rd Indonesia – Australia Dialogue in Yogyakarta held on Monday 29 and Tuesday 30 August.