Column in The Weekend Australian - Opportunity's Sitting on Our Doorstep: Let It In

Published in the Weekend Australian on 31.08.13

Indonesia has figured prominently in the federal election campaign for all the wrong reasons. Instead of recognising the enormous potential in closer economic and personal relations between Australia and Indonesia, the Coalition seems intent on straining the friendship with our nearest neighbour to breaking point with its ridiculous boat buy-back policy.

Election politics is overriding Australia’s national interest in forging stronger bonds with a nation of 250 million people, whose economy is expected to grow at more than 6 per cent annually over the next dozen years, catapulting Indonesia into the position of world’s 10th largest economy.

Following his victory in the 1993 unwinnable election, Paul Keating nominated closer relations with Indonesia as one of his four top second-term goals. Despite Indonesia successfully making the transition from military rule to a fully-fledged democracy, progress in the Australia-Indonesia relationship has not lived up to expectations. Indonesia is only Australia’s 12th-largest trading partner, two-way investment is small and the study of Indonesian in Australian schools is in decline.

In no other Asian country is the gap between the actual and potential trade and investment relationship so great as in the Australian-Indonesian relationship. It’s best to consider this as an opportunity gap – an opportunity sitting on our doorstep, waiting to be realised.

At the release of the white paper on Australia in the Asian Century last October, then Prime Minister Julia Gillard foreshadowed a series of country strategies. In July this year the Rudd government issued the country strategy on Indonesia. Having halved its poverty rate over the last decade, Indonesia already has a middle class twice the size of Australia’s population. Later this year Indonesia will host both the Asia Pacific Economic Cooperation (APEC) forum and the biennial meeting of the World Trade Organization.

The Australian government has been working closely with Indonesia to help ensure both meetings are successful. Indeed, it is possible that the almost extinct Doha round of global trade negotiations might deliver a down-payment of close to half the value of the entire round at Bali in December. Agreement was reached in May at a meeting of key countries chaired by Australia that every effort would be made to deliver this instalment at Bali.

Personal relationships matter in all countries but none more so than Indonesia. The personal friendships between Australian and Indonesian ministers are a valuable asset for closer relations. Yet the Coalition does not seem to understand this. A centrepiece of the Coalition’s campaign launch was a policy of using Australian taxpayers’ money to buy boats from poor Indonesian fishermen to prevent them being used for smuggling asylum seekers to Australia.

A senior member of Indonesia’s ruling party has described the policy as “crazy, unfriendly and derogatory” that “shows a lack of understanding in this matter.” This condemnation comes on the heels of Indonesia’s criticism of Abbott’s plan to tow boats back into Indonesian waters. Shadow foreign minister Julie Bishop had earlier sought to create the impression that the Coalition and the Indonesian government had reached a private understanding on towing back boats, remarking pointedly that “what people say privately can be different to what they say publicly,” after Indonesia’s ambassador to Australia had indicated publicly in relation to towing back boats that “no such collaboration will happen.”

Indonesia’s archipelago of 17,500 islands has around 750,000 fishing vessels. The Coalition’s boat buy-back policy is crass election politics from an Opposition that, having criticised Labor for suspending live cattle exports, is displaying reckless indifference to the Australia-Indonesia relationship.

Regardless of which party wins next Saturday’s election, a concerted effort must be made to build friendships and trust with Indonesia. Three Indonesian cabinet ministers, including the country’s vice-president, have studied in Australia. The business communities of the two countries have been collaborating on the content of a comprehensive economic partnership agreement being negotiated by the Australian and Indonesian governments following its launch by then Prime Minister Julia Gillard and President Yudhoyono. Indonesian has been identified as a priority language for Australians in the Asian Century white paper.

The seeds of a highly productive relationship have been planted and green shoots are appearing. But they need nurturing. Ill-considered policies developed to appeal to a domestic voting constituency in the hothouse of an election campaign carry the risk poisoning a relationship that, if allowed to flourish, will deliver jobs, regional development and prosperity for both nations.