By Sergei DeSilva-Ranasinghe
As Australia’s most strategically important neighbour, Indonesia’s importance to Australia’s national interests have grown substantially in the post-Suharto era. Australia’s Ambassador to Indonesia, Greg Moriarty, talked with Sergei DeSilva-Ranasinghe about the focus of Australia’s ties with Indonesia today, the importance of wide-ranging defence and security cooperation, Indonesian perceptions of the US rebalance in the Asia Pacific and strengthening US-Australia ties, the growing importance of the Indian Ocean region, and the future of the bilateral relationship.
Describe the current status of Australia’s relationship with Indonesia?
Australia’s bilateral relationship with Indonesia has never been stronger, and both countries are committed to elevating the relationship to a strategic partnership. We enjoy a close government-to-government relationship and cooperate well on the full range of our bilateral interests in politics, security, commerce, environment, culture and people-to-people links. Australia and Indonesia are neighbours in a region that has a number of challenges which affect us similarly. Indonesia has transformed itself into a vibrant democracy and is experiencing substantial and sustained economic growth. Indonesia is also taking on a more significant international role on an increasing number of issues. We now have very useful bilateral discussions and share common perspectives. So Indonesia has become and will continue to be a much more substantial partner for Australia.
As part of a new framework for the relationship, a two-plus-two meeting of foreign and defence ministers from Australia and Indonesia was held for the first time in 2012. This is the same format we have with our closest international partners, including the United States and the United Kingdom. Indonesia is now in that special group of relationships with Australia and increasingly sharing perspectives on bilateral, regional and global issues. President Yudhoyono visited Darwin in July 2012 for the second annual Indonesia-Australia leaders’ meeting; the first annual defence ministers meeting was held in September 2012; and the 10th annual trade ministers’ meeting was held in October 2012. With almost 120 bilateral ministerial visits and meetings since 2007, we have a complex and extensive range of genuine bilateral cooperation at the government-to-government level.
There’s obviously an extensive security agenda in policing and defence cooperation. But we can improve opportunities in bilateral trade and commerce, which I believe has not been optimal even though Indonesia is Australia’s 12th largest trading partner. Given the complementarities of our economies, both governments are working actively to unlock the opportunities for business. The first round of negotiations on the Indonesia-Australia Comprehensive Economic Partnership (IACEP) was held in 2012. Both countries have said it’s more than a free trade agreement and will explore the potential for improving investment flows and capacity building so Indonesia has better access to Australian markets.
Australian companies would do well to take advantage of Indonesia’s size, its proximity and the complementarities of our economies—we aren’t competing with Indonesia in many sectors. The other thing is that the Indonesian economy has been growing significantly, with over 5% annual growth over the last five or six years: 6.5% growth in 2011 and over 6% in 2012. Some economists predict Indonesia could be in the top 10 economies of the world within the next decade. As Indonesia’s economy continues to grow, Australian businesses will have more opportunities to trade in goods and services in this growing market and collaborate with Indonesian partners to access other markets.
We should also take advantage of the ASEAN connectivity agenda: ASEAN countries are committing to if not a single market, then at least reducing trade barriers within ASEAN. Indonesia is a good partner for Australian companies in terms of adding value and accessing the broader ASEAN market. Two-way trade in goods and services in 2011 reached $14.8 billion: that is $11.3 billion in goods and $3.5 billion in services. In 2011, Australia’s services exports to Indonesia were $1.3 billion and imports from Indonesia were $2.3 billion. Personal travel and education services are the main components of the bilateral services trade.
Although it’s hard to give a precise number, approximately 6,000 registered Australians are living in Indonesia. Over the next 12 months, almost 900,000 Australians are expected to visit Indonesia. Most of them will be tourists going to Bali, but there are increasing numbers of business visitors, students, academics and others building those all-important people-to-people links. I think we’ll have around 140,000 Indonesians visiting Australia in 2013. A key part of this group—and very important to Australia-Indonesia relations—are the 18,000 Indonesian students enrolled in courses in Australia. These are the highest numbers of Indonesian visitors and students to Australia ever and have been showing a remarkable growth in recent years.
How does the framework of security cooperation change the strategic nature of the relationship between Australia and Indonesia?
The Lombok Treaty was an important step in the evolution of our bilateral relationship. It provides a framework for broad-ranging security cooperation—and a strong political commitment to our security forces, police and defence to build operational cooperation and increase shared perspectives.
Our police-to-police relationship with Indonesia is important to both countries and includes counter-terrorism efforts. I’ve also recently been involved in supporting the Australian Federal Police’s (AFP) work in Indonesia in fighting cyber-crime, child sex tourism, terrorism, major crime, illegal drugs trade, etc. These are of vital importance to Australian and Indonesian interests.
The Australian Minister for Defence, Mr Steven Smith, and his Indonesian counterpart, Mr Purnomo Yusgiantoro, had the first annual defence ministers’ meeting in early 2012. We have had a record level of exchanges, operations and exercises—the highest in 15 years. The 2012 joint air force exercise – Pitch Black – in Darwin was the first time Indonesia’s Sukhoi aircraft had participated in an exercise outside Indonesian territory. The Special Forces of both countries are holding joint annual exercises in Indonesia and Australia. So we have a high level of operational cooperation and trust.
We’ve also started a military alumni association called ‘Ikahan’ to maintain and build upon professional relationships among serving members of our defence forces by staying in touch with one another. The Lombok Treaty provides the framework for all of this. It also commits both countries to respect each other’s territorial integrity and national unity, which are obviously important issues for Indonesia given its history. National unity is a crucial political imperative for all political parties and all Indonesians.
The Lombok Treaty states explicitly that Australia does, and will continue to, support Indonesia’s territorial integrity. Groups in Australia calling for the independence of the Papua and West Papua provinces from Indonesia need to understand that this is an incredibly sensitive issue for Indonesia. These calls are reckless and unhelpful because Indonesia faces complex challenges in both provinces.
Yes, it’s important that Australia can and should encourage Indonesia to address the very significant developmental challenges and grievances in Papua and West Papua. But we should do that by supporting the full implementation of special autonomy in both provinces, supporting Indonesia’s policy to accelerate development in Papua and West Papua, and raising human rights abuses when they come up. That is what a committed strategic partner does, and that is what Australia is doing in Papua and West Papua, and will continue to do.
To what extent is the bilateral relationship with Indonesia affected by the asylum seeker issue?
We genuinely believe no single issue can or should dominate the relationship between governments, and there is an acknowledgement of this idea. Our cooperation with Indonesia on fighting people smuggling is important, and as the ambassador here, I’m committed to doing my best to maximise the cooperation we get from Indonesia on this crucial matter. We do get substantial assistance from Indonesia. Similarly, Indonesia is also committed to the Bali Process of developing a regional framework to handle people smuggling and trafficking.
Indonesia understands that it’s an important issue for Australia and we do work well. But I also believe people smuggling is not, and should not be, the only issue in the relationship. This is a strategic partnership with a range of interests to be pursued. We’re doing a lot of work on a comprehensive agenda that includes disaster preparedness and response, transnational crime, people smuggling, maritime cooperation, climate change, sustainable economic development, and human rights. All of Australia’s interests are important and need to be pursued through quiet and persistent diplomacy.
Our development assistance is very much appreciated, and our willingness to work constructively with Indonesia at the G20, APEC and other regional forums is very important to President Yudhoyono. Indonesia is increasing its international presence and looking to play a bigger role on the regional and global stage. I think Indonesia sees Australia as a partner it can work with in these forums as we often have similar perspectives. We genuinely believe a more stable, prosperous and internationally engaged Indonesia is in Australia’s national interest. It is important for us, and the region, that Indonesia takes a more active international role.
What are the characteristics of Australia’s counter-terrorism cooperation with Indonesia?
Australia has a key national interest in continuing to assist Indonesia to defeat the threat posed by terrorists. As you know, 95 Australians were killed by terrorists in Indonesia in the Bali bombings in 2002 and subsequent attacks. The AFP provides training and capacity building to enhance the capabilities of the Indonesian National Police (POLRI) to counter transnational crime and terrorism. We provide substantial support to the POLRI, but Indonesia’s continuing counter-terrorism successes are also very impressive. Since the Bali bombings, more than 500 arrests have been made in Indonesia on terrorism-related charges and more than 250 perpetrators convicted.
The Indonesian police continue to conduct successful counter-terrorism operations. While we applaud Indonesia’s success, it is still a reminder that terrorists pose a persistent danger in Indonesia and elsewhere in the region. Indonesian authorities are very aware of the threat. They are doing what they can to build their own capacity, which has been substantially enhanced in recent years. Australia provides support by sharing information, assisting with forensic analysis, helping investigate funding streams for terrorist groups, enhancing border-patrol and transport security, and helping the Indonesian government and community groups oppose extremism. I have seen first-hand the strong cooperation in all these areas, and I believe Indonesia appreciates the assistance we provide.
Tell us about the developments in bilateral cooperation within the area of humanitarian assistance and disaster relief?
Indonesia is a natural disaster prone country. The tsunami in the Indian Ocean in 2004 killed more than 160,000 people. Then were earthquakes in Sumatra (2005), Java (2007), and Papua (2009); Mt Merapi erupted in 2010; and there was a tsunami in the Mentawai Islands in 2010. So Indonesia has had its share of disasters, and tragically, there will be more. Australia has been a strong partner in initial disaster response, but we’re also working with Indonesia on their disaster risk reduction work.
In 2008, President Yudhoyono and Prime Minister Gillard established an Australia-Indonesia facility in Jakarta for disaster reduction. We are providing specialist staff and about $67 million over five years to help reduce the risk of natural disasters by using Australian and Indonesian science to better identify natural disaster hazards and risks, and use that information to support training exercises at national and provincial levels. We also share this information with ASEAN and the United Nations.
The focus is on disaster risk reduction and governance analysis and helping communities prepare for disasters. This is not about disaster response—setting up soup kitchens and field hospitals after a disaster—but about working with communities and local authorities to help them survive disasters. We help villages and communities build houses that can withstand earthquakes better, draw on local land use planning, and are more thoughtful while rebuilding following a disaster.
How has Indonesia responded to the US strategic rebalance to the Asia Pacific?
There were a variety of perspectives in Indonesia in relation to the US pivot towards the Asia-Pacific region, but Indonesia is also committed to deepening its own relationship with the United States. President Yudhoyono has said that one of his foreign policy objectives is to strengthen Indonesia’s relationship with the United States. So Indonesia is building its own defence cooperation with the United States, its police and its security apparatus.
It’s also important to acknowledge that President Yudhoyono was quite constructive about the announcement in Darwin of the rotation of up to 2,500 US Marines in bases in northern Australia over a four-year period. He said it was an opportunity to consider what this additional US presence would mean to the region, particularly in relation to opportunities for disaster relief and response training, not just for Indonesia, but also other East Asia Summit member countries, including China.
The Indonesians certainly have a strong desire to avoid any US-China strategic competition that might unsettle or destabilise the region. Indonesia has made very clear that it wants the United States and China to develop a constructive relationship in the region and avoid strategic competition. Australia of course shares this perspective. We have an alliance with the United States so our relationship is different to the one Indonesia has with the United States. But we share a common regional perspective and believe that the enhanced US defence engagement with Australia will contribute to regional stability. This is an evolution and an enhancement in our alliance, and Indonesia is aware of this long-standing alliance and its positive contribution to regional stability.
What has been Indonesia’s response to suggestions that the Australian military presence on Cocos Islands could be upgraded, and that the island could even used by US military aircraft?
Australia has committed to keeping Indonesia fully informed of all discussions and developments in our alliance with the United States. We’ve informed the Indonesians of our current thinking about the Cocos Islands and that there is no plan to change the tempo of activity or explore new or enhanced arrangements there. Indonesia very much appreciates these updates about our defence planning, force structure and posture, and our close engagement on the defence white paper on strategic perceptions to be produced in 2013. Indonesia has said, ‘please keep us informed’ and is comfortable with current discussions.
How does Indonesia view the Indian Ocean region, and how is Australia cooperating with Indonesia on matters pertaining to security in this part of the world?
We are starting to talk more about our common perceptions on the Indian Ocean region. At the two-plus-two meeting in Canberra in March 2012, Indonesia and Australia agreed on a common interest in ensuring the Indian Ocean region remains stable and secure for trade and broader strategic interests. We haven’t cooperated too closely on security in the Indian Ocean, but Indonesia, Australia and India are committed to building the Indian Ocean Rim-Association for Regional Cooperation (IOR-ARC). All three countries, Indonesia, Australia and India, are full members of the IOR-ARC and have agreed at a recent meeting that the organisation needs a boost.
Where do you see the future trajectory of the Australia-Indonesia relationship moving?
Both countries need to continue to work hard to transform this bilateral relationship into a genuine partnership, and it will require sustained, quiet and nimble diplomacy. I would like to see more emphasis on the trade and economic relationship. I am enthusiastic about the prospects for the Indonesia Australia Comprehensive Economic Partnership (IACEP) to significantly lift our business engagement.
The business-to-business relationship can certainly be better. Where we are lacking is Australian investment in Indonesia, which has risen but was only $5.4 billion in 2011—up by only 1% from 2010. Indonesian investment in Australia has increased by 11% in the same time to $454 million. Although, these are quite small sums considering Australia’s overall investment in other countries. There’s potential to build on our trading and investment relationship.
Australian companies have a good reputation in Indonesia for good governance, strong commitment to education and training, good environmental management, and superior corporate and social responsibility ethos. Those qualities are going to be important if Indonesia is to achieve its economic potential, and Australian companies have a significant capacity to contribute to that growth. Putting effort into improving this business-to-business relationship will be time well spent.
People-to-people relations are just as important. In many ways, we still have quite dated perceptions of each other. I believe it is important for me here to try and promote to Indonesia the modern, vibrant and diverse image of Australia. It’s also important for Australians to take a fresh look at Indonesia—at the enormous changes that have taken place here over the last 10 years—and not be stuck in the past in our perceptions.
My job and the job of the embassy is to build our access and influence across the range of our interests and avoid getting trapped in transactional issues. We do have to deal with the issues of the day, whatever they happen to be, but the Australia-Indonesia relationship is an important strategic relationship. We need to be active across the range of our interests and build our influence over time for a mutually beneficial partnership and prosperity in the region.
