Chris Bowen: The Case For Australian and Indonesia Working Together

CHRIS BOWEN MP

SHADOW TREASURER

MEMBER FOR MCMAHON

 

‘THE CASE FOR AUSTRALIA AND INDONESIA WORKING TOGETHER’
ADDRESS TO THE PARAMADINA UNIVERSITY, JAKARTA

 

TUESDAY, 25 OCTOBER 2016


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Kepada Yang Terhormat Bapak Rektor.

 

Bapak-bapak, Ibu-ibu, dan saudara-saudara sekalian.

 

Selamat siang Bapak Rektor, para dosen pengajar, dan rekan-rekan mahasiswa yang hadir pada hari ini.

 

Terima kasih atas undangan untuk berbicara pada hari ini.

 

Saya sangat senang berada di sini.

 

Indonesia adalah salah satu negara yang penting bagi saya dan saya menyambut kesempatan untuk berbicara tentang hubungan antara Australia dan Indonesia, tentang bagaimana hubungan kedua negara dapat ditingkatkan dan yang lebih penting lagi bagaimana kita dapat bekerjasama memperhatikan  peningkatan hubungan dalam bidang ekonomi.

 

Saya telah mempelajari Bahasa Indonesia selama dua tahun ini.  Sepertinya saya lebih baik memberikan sebagian besar pidato saya dalam Bahasa Inggris untuk menghindari kesalahpahaman yang mungkin akan menyinggung  perasaan Anda secara tidak saya sengaja!  Namun kadang-kadang saya akan berbicara dalam Bahasa Indonesia dalam beberapa hari ini.

 

This is my first official overseas visit since our recent Federal election in Australia, and I wanted Indonesia to be that first visit because it underlines how important I see the relationship between our two nations.  In my current role I am very keen to see closer and deeper economic engagement between our two countries, a subject which I would like to talk about today.

 

I have had the chance to catch up with friends in the Indonesian Government (as well as make some new ones) on this visit. I was delighted to meet with the Vice Minister of Finance, Mr Mardiasmo this morning.

I am happy to have the opportunity to share some of my thinking with you about our relationship.

 

I am here with my friend and Shadow Ministerial colleague Stephen Jones MP.  Stephen shares my interest in all things Indonesian and has also been undertaking studies in Bahasa Indonesia which underlines his interest.  

 

Another of our colleagues, who hasn’t joined us on this trip but is a fellow Indonesian speaker is Luke Gosling, the Member for Solomon, the seat in our House of Representatives based around Darwin.  In fact, Luke speaks Indonesian much better than Stephen and I.

 

Our colleague Penny Wong, the new Shadow Minister for Foreign Affairs also made her first visit as Shadow Foreign Affairs Minister to Indonesia.  She made the point on her visit that making Indonesia her first port of call as Australia’s alternative Minister for Foreign Affairs was again to highlight the importance Labor placed upon our relationship, which she described as being of “paramount importance”.

 

If you didn’t get the chance to meet Penny on her visit a few weeks ago, I do recommend you get to know her if you can.  She is a first class intellect with a deep understanding of our region. She will make an outstanding Minister for Foreign Affairs in the next Labor Government.  Although her Bahasa speaking is more of the Malay style, it would mean if a Shorten Labor Government was elected at the next election, you would have both a Foreign Minister and a Treasurer in Australia with a deep interest in Indonesia.

 

That Australia and Indonesia are each important to the other should in my view, be a given.  From Australia’s point of view the growing Indonesian Middle Class and the fact that Indonesia will be the world’s fourth  biggest economy by 2050 means that our economy will benefit from much closer economic engagement with this growing economic power which is such a near neighbour. It would be negligent if we as nation didn’t forge closer economic engagement with a such a large, fast growing economy so close to us.

 

As the Chinese economy evolves into a more consumer focussed one and navigates its way through the travails of that transition, it just makes eminent sense for us to look to expand and intensify our economic, trading and investment relations with other Asian nations like India, Indonesia and the ASEAN Economic Community.

 

Of course the economic relationship already delivers substantial benefits to both countries in areas like tourism.

 

More than 1 million Australians travel to Indonesia each year contributing more than 18 trillion Indonesian rupiah (AUD$1.8 billion) a year to the Indonesian economy.

 

Or in other areas like agriculture.

 

It’s a little emphasised fact but Indonesia is Australia’s largest wheat export market, with Indonesia having imported around 3.7 million tonnes of wheat each year on average over the last five years.

 

This equates to Indonesia consuming around 20 per cent Australia’s total wheat exports, which were worth $1.4 billion in 2015.

 

These imports not only help feed a growing middle class in Indonesia but they also form a key plank of the Indonesian supply chain supporting local Indonesian industries, jobs and exports.

 

This is a great example of how our economic relationship benefits both countries and how deeper relations in the future will be to our mutual benefit.

 

But today I want to talk not so much about how a deeper economic relationship is in Australia’s best interests, but how better understanding and engagement is to our mutual benefit and the benefit of our region.

 

Of course, as Shadow Treasurer, the focus of my remarks is economic in nature.  But I also speak as a citizen with a keen interest in our region, our friendship and our mutual future.

 

In Australia, I am often asked why I regard efforts to broaden and deepen our relationship as one of our most important national endeavours. 

 

My answer is simple, and comes in the form of a question: name me two countries, anywhere in the world so close geographically and so different culturally and historically.  We are neighbours but we share not a language, a religion or a colonial heritage.  Mexico and the United States might come close, but Australia and Indonesia win: our differences mean we have to work at understanding each other; helping each other and working together.

 

Former President Yudhoyono put it well when he said to the Australian Parliament in 2010: “We are equal stakeholders in a common future with much to gain if we get this relationship right and much to lose if we get it wrong.”

 

We are also of course looking forward to President Widodo’s visit to Australia in the next few weeks.

 

I believe more young people learning the Indonesian language and developing an interest in Indonesia is an important national imperative for Australia.  And politicians shouldn’t  lecture young people about doing something we are not prepared to do ourselves, hence you find Stephen and me returning to text books after many years away from studying and learning Indonesian.  Even though our Indonesian is imperfect and I am told I at least speak with a heavy Australian accent, I hope it helps show how seriously Australia’s alternative government takes better engagement with our Northern neighbour.

 

It is part of a project of deepening our people to people links and understanding.  Let me give you an example of what I regard as best practice in this regard: and hope for the future.

 

Recently, I was invited to the Coffs Harbour Christian Community School on the North Coast of New South Wales.  It is quite a distance from where I live, but they invited me because they knew I was interested in the teaching of Indonesian language so I was keen to go.

 

They have a remarkable story.  Every student from kindergarten to Year 9 studies Indonesian.  Most keep it going through High School.  Last year, Year 12 or final Year students from the school were ranked 2nd, 3rd and 4th in the New South Wales Higher School Certificate.

 

But even more impressive and important is the degree of exchange.  Whilst there on the visit I participated in a live video cross as young Australians helped young Indonesians learn English and vice versa.  Under the schools “Project Membantu” students regularly travel to Bali to participate in exchange and development programs and the school also hosts annual trips of Indonesian students to further their English training and understand Australia.

 

This school chose a long time ago to choose one country to focus its language and cultural education on and to do it very well.  They have certainly achieved this.  Students from this school will, regardless of their chosen career, have a deep understanding and appreciation of Indonesia through their working lives.

Adanya perbedaan di antara kita berarti bahwa kita harus bekerja lebih keras untuk memahami pikiran satu sama lain, membantu satu sama lain dan bekerja bersama.

Too often, however our relationship is transactional.  We approach each other when we have a problem or a disagreement.  Of course, we will have disagreements and different perspectives from time to time.

 

In both countries there are political points to be made by populist politicians criticizing the other nation.

 

But if our relationship has more ballast, is built on better  foundations, any problems or different perspectives can be dealt with in the context of that broader and deeper understanding.

 

I’ll talk a lot today about improving engagement between our counties and building trade links, but it is ultimately about friendship. 

 

A friendship where we learn from each other and respect each other.

 

A friendship where even during the difficult times, it is beyond doubt that it will endure.

 

From an Australian point of view, I think the size and scale of the Indonesian success of the last twenty years is under-rated.  The transition to full democracy is one of the outstanding success stories of democratic transition in Asia in history. 

 

The economic transition, which sees Indonesia on track to become the world’s fourth largest economy by 2050 has seen and will see millions of people lifted out of poverty.  It is right but not inevitable that the world’s fourth largest country by population, is among the front rank of the world’s economies.  It is not inevitable, but it is on the way to being achieved.

 

Today I want to particularly focus on what we can do economically. Let me deal with this in two parts: first better and deeper relations between our two economies and our economic policy makers, and then what we can work on together in multilateral forums for our mutual benefit and the benefit of our region.

 

For two large economies so close together geographically and undergoing complimentary economic changes, our level of trade, investment and general engagement is low.  It is usual to say it is “underdone” but in fact it is scandalously low.

 

This is in neither of our economic interests.

 

Indonesia is Australia’s twelfth largest trading partner.  While eight out of ten of Australia’s top trading partners are in Asia, it beggars belief that one of the largest Asian economies and our nearest neighbour is not among them.

 

We should set the target of Indonesia being among our top 10 trading partners within five years.

 

A successful conclusion to the negotiations for the Indonesia-Australia free-trade agreement would be a good platform for this achievement, but this would simply set the framework.  Alone it is unlikely to be enough to see our two economies achieve the mutual benefit which would come from a closer trading and investment environment.

 

We will need a framework for ongoing discussions between senior economic ministers to ensure we are doing everything possible to promote closer economic engagement.

 

Just as Australia and Indonesia’s leaders have had a formalised Annual Leader’s meeting since 2010 and our Foreign and Defence Ministers have had a two plus two dialogue since 2012, I also propose that Australia and Indonesia formalise annual meetings between our finance and trade ministers in an economic and investment 2 + 2. 

 

Our Shadow Trade Minister Jason Clare, shares my interest in deeper economic and trade engagement and indeed would have been on this trip if it wasn’t for the birth of his first child.  He joins me in suggesting that a regularised, annual engagement between these two key ministries in our country would be worthwhile.

 

Given the importance of education in our trading and broader relationship, our respective education ministers would likely also be involved in these meetings from time to time. 

 

These meetings would provide a compulsory annual stocktake of the state of our economic engagement and provide an opportunity for us to knock over barriers to closer engagement.

 

Importantly, the meetings would not involve only the principles, of course but also many officials.  Our officials would come together to plan the discussions and share thoughts on the agenda.  In other portfolios I have held in Australia, I have had the opportunity to observe how closely our national security and military officials work together.  Every very senior Australian General for example has known and worked with their Indonesian counterpart for years and can easily contact them to discuss issues in a spirit of trust and understanding.  I want to see our respective economic policy making infrastructure to reach a similar degree of knowledge of each other and trust.

 

Secondly, I want to talk about and promote closer co-operation between Australia and Indonesia in multilateral economic forums, and in particular talk about the G20, APEC and finally ASEAN.

 

As you know, under the Rudd Government, Australia was very active in promoting the G20 as the body which should emerge from of the Global Financial Crisis as the key international economic clearing house.  This was clearly partly because Australia wanted a seat at the table. 

 

But it was also because we saw it as self-evident that the G8, which froze out important nations in our region such as Indonesia and India no longer had the necessary credibility or authority to be a serious economic  decision making body.

 

I believe though that it is necessary to ensure that the G20, having achieved its original task of seeing the world through the global crisis, must have a refreshed and reviewed agenda.

 

I also think that Australia and Indonesia could work in a more complimentary fashion in ensuring the G20 work load and agenda keeps the interests of our region in mind.

 

Hence I also suggest that the Treasurer of Australia and the Finance Minister of Indonesia should meet in advance of each G20 Finance Ministers meeting, either in person or via video, to share what we each hope to achieve at the G20 and to discuss how we can best support our agendas where they are complimentary, as they would usually be.

 

This would include pursuing important issues that were put on the table earlier this year by President Jokowi, such as strengthening ties in anti-corruption efforts amongst G20 economies and the importance of inclusive growth.

 

The other point I want to make is that as welcome as the growth of the G20 has been, we cannot let the G20 suck attention and focus away from APEC.

 

Indonesia supported Bob Hawke’s suggestion that APEC should be establish as a trade body and Prime Minister Keating and President Suharto worked together effectively to promote APEC as a new regional leaders’ level for over twenty five or so years ago. We shouldn’t let APEC wither on the vine, in fact with the increased importance of the Asia-Pacific in the world economy, the contrary is the case.

 

Again, Australia and Indonesia should keep in close touch about what each of us hopes to achieve through APEC for the good of our region.

 

On the contrary to those who see APEC as having outlives its usefulness, I see the potential for a bright future for APEC, if it is paid due attention.

 

APEC’s big achievement has been the reduction in average tariffs in our region from 15% to 7% from 1988 until now.  And it is in further closer economic engagement that APEC’s potential lies.

 

For example, if the TPP should fail to pass in one or more of its major participants, both APEC and ASEAN would have greater, not lesser importance.

 

If, on the other hand, the TPP survives its ratification journey, then APEC, containing as it does the world’s second biggest economy, would be the best forum to discuss the next steps for economic integration in the region. 

 

It is APEC which originally suggested the establishment of the Free Trade Area of the Asia-Pacific (FTAAP)  which is probably the next frontier of trade negotiations, come what may with the TPP. Likewise, ,  The ASEAN centred proposal of a Regional Comprehensive Economic Partnership, consisting of ASEAN and each nation with which ASEAN has a free trade agreement cannot be allowed to fall off the agenda.

 

The work of ASEAN and APEC are not mutually exclusive. Indeed, the RCEP could be a key step towards the Bogor goals that were signed by Paul Keating, President Suharto and other Asia Pacific leaders here in Indonesia in 1994.

 

Free trade agreements now abound in our region, but they are third best option after genuine global liberalisation through the WTO, which currently feels like a pipe-dream (despite the best efforts of Indonesia and Australia) and regional liberalisation through the likes of APEC. 

 

APEC of course has the advantage of the including the world’s two biggest economies.  In fact, APEC is the first regional multilateral organisation that China ever participated in and its 21 members account for 55% of global GDP.

 

ASEAN has been as important as APEC in promoting closer economic engagement over the last two decades.

 

Australia was the first dialogue partner of ASEAN, in a relationship which begun in 1974 under the tutelage of a revered former Australian Labor Prime Minister, Gough Whitlam.  Gough Whitlam is remembered in Australia for his vision in arguing that Australia should recognise China, when that was not the done thing for allies of the United States to countenance.  But he was also a visionary when it came to Indonesia and ASEAN, and he saw the benefit of a relationship with ASEAN as a Dialogue Partner.

 

With Australia having been a dialogue partner of ASEAN for forty-two years now, there is merit in considering ways of promoting closer relations between Australia and ASEAN.

 

ASEAN and Australia enter a new phase in our relationship, with Australia hosting the ASEAN leaders summit in 2018; a very welcome development.  This development can be a catalyst for us all to consider the contours of ASEAN-Australia engagement in coming years.

At this time of change, ASEAN is critical for our region’s future and that is a key reason for Australia to step up its engagement with this key regional institution.

 

Australia’s hosting of the ASEAN leaders summit in 2018 can and hopefully will be used to consider a range of ideas to deepen our relationship and modernise regional architecture.

 

The summit can be a catalyst in ASEAN and Australia to consider the best ways of promoting, deepening and improving our engagement.  In my capacity, I’m particular interested in bringing finance ministers together , including Australia playing a role in facilitating better interaction amongst the finance ministers of ASEAN and the Pacific Islands forum, which would be useful for example in promoting dialogue about trade and, importantly climate change.

 

ASEAN is an ambitious organisation, following the goal of becoming a community.  Australia is  the twelfth largest economy in the world, the fourth largest pool of savings in the world, twenty five years of uninterrupted economic growth and considerable experience in economic policy. There is plenty we can do together for the benefit of our region. 

 

Australia has embraced the concept that our prosperity resides in the region and not separate from it.   Australia today has a much better understanding of the importance of the region and our place in it and we are more diverse and more socially and economically open than we were when ASEAN was formed just short of half a century ago.

 

One practical initiative which could help progress the conversation about ASEAN and Australia  would be the establishment of an Australian-South-East Asian studies centre,.   This could conceivably be jointly hosted by a university in Australia in close co-operation with an Indonesian university.

 

Australian universities host US Studies centres, China Studies centres, and Monash University hosts the Australia-Indonesia Centre while the University of Western Australia hosts the excellent US-Asia Centre which looks at issues through an Indo-Pacific prism and has former President Yudhoyono as a Senior Fellow  .  But we lack an Australia-South East Asia Studies Centre.  Comparable centres exist in the US, Japan, Korea and India but not in Australia. 

 

I can’t think of any good reason why there shouldn’t be an Australia-South East Asia studies centre and I can think of many good reasons why one should be established.  We in the Australian Opposition would welcome the establishment of such a centre and encourage Australian and Indonesian universities to consider such an initiative. Such a studies centre would enable academics and people interested in closer relations between ASEAN and Australia to further progress a public conversation about how ASEAN can best be strengthened in the future. 

 

Conclusion.

 

In the 1940s, when residents of the Dutch East Indies were agitating for independence from the colonial yoke, the conventional wisdom was that Australia should support the established European order and support the Dutch over the aspirations of millions of neighbours.

 

The Chifley Labor Government saw through this and had the vision to provide support for independence.

 

The Whitlam Labor Government refocussed Australian foreign, economic and trade policy on Asia and negotiated for Australia to be a dialogue partner of ASEAN.

 

And of course, Bob Hawke championed APEC while Paul Keating argued that APEC should be transformed from a meeting of economic and trade ministers to a summit of leaders.  Paul Keating visited Indonesia in his four years as prime minister more times than all his prime ministerial predecessors combined.

 

I make these points not to claim the Australia-Indonesia relationship for my particular party.  It is too important for that.

 

But more to highlight that as the alternative government, we see fostering closer relations with Indonesia as an important part of our heritage and a legacy.  As Treasurer, I would see closer economic engagement between us a key priority and I would look forward to working with my Indonesian counterpart in co-operation and friendship, as we have done before.

 

Terima kasih sekali lagi untuk kesempatan dapat berbicara di Universitas Paramadina pada siang hari ini.

 

Saya senang dengan pertanyaan-pertanyaan dari mahasiswa, semoga apa yang saya sampaikan dapat berguna bagi rekan-rekan semua.  Akan lebih baik jika Anda dapat bertanya dalam Bahasa Inggris untuk memastikan bahwa saya mengerti pertanyaan Anda.

 

Ada peribahasa Indonesia yang mengatakan Kalau ada sumoour di ladang, boleh kita menumpang mandi, kalau ada umur panjang, boleh kita berjumpa lagi". Terima kasih.


TUESDAY, 25 OCTOBER 2016

 

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