Subject: Australian-Indonesian Relationship at 'Historic High' in 2008

The Jakarta Post

December 30, 2008

Australian-Indonesian Relationship at 'Historic High' in 2008

Veeramalla Anjaiah and Lilian Budianto, The Jakarta Post, Jakarta

While speaking at a seminar in Jakarta in August 2008, Australian Minister for Foreign Affairs Stephen Smith described his country's current relationship with Indonesia as at an "historic high". Australia and Indonesia no longer see each other only in geographical and economic terms but as, in the words of Australian Prime Minister Kevin Rudd, "inseparable partners."

If this is true, it is a big step forward in the decades-old "love-hate" relationship between the two culturally different neighbors.

Just a few years back, Indonesia became enraged with Australia for its pro-independence stance on East Timor (now Timor Leste). More recently, in 2006, Indonesia recalled its ambassador from Canberra as a protest against Australia's decision to grant temporary visas to 42 Papuan asylum seekers. Since then things have been improving rapidly, especially under the new Australian prime minister, Kevin Rudd.

Since his election in November 2007, Rudd has visited Indonesia three times and met with President Susilo Bambang Yudhoyono a half a dozen times, sending a clear signal to Jakarta that he regards the relationship with Indonesia as profound.

"We have seen, across the government, a similar resolve, with many Australian ministers coming to Indonesia with quite a few Indonesian ministers coming to Australia," Ambassador Bill Farmer told The Jakarta Post in an exclusive interview at his office in Jakarta recently.

"All of these activities are a sign that the relationship is substantial and growing".

It's true there has been immense activity regarding Australia's foreign policy toward Indonesia. Both countries have been working closely on issues including climate change, counter-terrorism, natural disasters and transnational crimes at various international forums. The Bali Democracy Forum, which was co-chaired by Yudhoyono and Rudd early this month, was just the most recent.

But Indonesia sees the growing ties from a different perspective. Indonesia and Australia are products of different civilizations and cultures. Until recently, both have different political systems.

"Between our two nations there is a mismatch of backgrounds that can make our relations rather bumpy," Indonesian Foreign Minister Hassan Wirayuda said last month in Jakarta.

The relations are at least moving in a positive direction.

"During the past seven years, our bilateral relations have been generally stable. They have become so much more rational than emotional," Hassan said.

It seems Australia does not want its ties with Indonesia, home to world's biggest Muslim population, to be a zero-sum game.

"The new government (Rudd's Cabinet) is very determined to build a solid basis of cooperation," Farmer said.

The most important milestone in the history of the two countries relations was the signing of the Lombok Treaty, which became effective in February 2008.

The Lombok Treaty, or the Australia-Indonesia Framework for Security Cooperation, establishes an official guide for defense, law enforcement, counter terrorism, maritime security and response to natural disasters for the two countries.

It also binds each country to respect the other's sovereignty, territorial integrity, national unity and political independence; and bars interference in each other's internal affairs.

"It (the Lombok Treaty) will allow us to fully cooperate in defense, sustainable fisheries and people to people contacts. It has given us the foundation for our relationship," Farmer said.

When pressed for further details of the growing partnership between the two countries, Farmer said that there has been significant progress in Australia's cooperation with Indonesia in a whole range of areas.

"We have been cooperating in areas like sustainable fisheries, economic social development (in Indonesia), counter-terrorism, people smuggling, environment, interfaith dialogue and disaster management," Farmer, who presented his credentials to President Yudhoyono on Feb. 6, 2006, said.

"Indonesia and Australia are working productively and substantially".

In the economic sector also, the ties between the two countries has been on the constant rise.

"The two way trade is now A$10 billion and it is growing substantially in the last few years. There is a strong basis for continuous growth," Farmer said.

Based on the Indonesian statistics, trade surged to US$6.39 billion in 2007, up from $3.44 billion in 2003 (see table).

Australia has been a major supplier of live cattle, salt, sugar, cotton, crude oil, aluminum, wheat and diary products to Indonesia. On its part, Indonesia exports crude oil, gas, non-monetary gold and wood to Australia.

Farmer said that Australia and the Association of Southeast Asian Nations (ASEAN) had finalized a Free Trade Agreement, which would most probably be signed in early 2009.

Yet Australia has bigger plans at the bilateral level.

"We are now conducting a feasibility study on an Indonesian/Australian bilateral free trade agreement. So I am quite optimistic that both countries will see a further increase in trade," Farmer said.

Australian companies are active investors in Indonesia.

"We have seen quite good Australian investment in the manufacturing and mining sectors. Cumulative Australian investment will be around A$4 billion," Farmer said.

In 2007, Australia's approved foreign direct investment (FDI) value stood at $324 million; the realized FDI was $195.6 million.

While commenting on Rudd's plan to establish an Asia-Pacific Community, Farmer said the response was good so far.

"Indonesia and other countries have shown openness to the idea of discussing the future arrangement (of the Asia-Pacific Community)," Farmer said.

Australia has been very active, Farmer said, in people to people exchanges with Indonesia.

"We have a very good exchange of journalist, young people, religious leaders, teachers and students. All these exchanges are very positive," Farmer said.

A true friend thinks of you when all others are thinking of themselves. This is absolutely true in the case of Australia as far as its relations with Indonesia are concerned. Australia generously helped Indonesia when its Aceh and North Sumatra provinces were hit by the deadly tsunami of 2004, providing A$1 billion assistance

In the next five years, Farmer said, Australia will provide A$2.5 billion in development assistance to Indonesia under the Australia Indonesia Partnership program, Australia's largest bilateral program. Through this program, the two countries will work together to alleviate poverty as well as to promote peace, stability and prosperity. It will also help Indonesia achieve its Millennium Development Goals.

The relationship between Australia and Indonesia has progressed significantly in 2008 and, as for the future, Farmer says he is "optimistic".

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