The Indonesian Elephant in the Room

Since it was announced on September 28th 2011, policy experts and enthusiasts on Australia’s relations with Asia have been eagerly waiting for the arrival of the Asia Century White Paper. Australia in the Asian Century written by former Treasury boss Dr Ken Henry is considered by many as the Gillard government’s opportunity to explain Asia’s emerging story to the electorate.

When one thinks of the rise of Asia, many of us automatically turn to China’s growing presence in the region—be it through trade, overseas investments, or even local cinema. However we forget other nations like India, Indonesia and even Papua New Guinea, which had a growth rate of 7% in 2010, are part of this changing landscape.

One country that is often forgotten is Indonesia. This is surprising because it is next door, is the fourth largest country in the world in terms of population, and considering its geography, it has tremendous potential to shape the dynamics of our region. Professor Peter Drysdale has recently wrote that considering Indonesia landed on solid economic ground after the Asian financial crisis, it is on the way to becoming one of the six biggest economies in the world.

We should be considering the opportunities and consequences of having a large powerful economic neighbour to our north. The current relations between both countries could be in much stronger shape. The Gillard government’s decision to suspend live cattle trade was regarded in many policy circles as a serious diplomatic error especially because the government suspended this trade without consulting the Indonesians.  When it did resume, Jakarta halved the quota of Australian beef it imported and since then the Indonesians have looked to increase their domestic industry and find alternative foreign suppliers. Ultimately, it brought damage to Australia’s reputation as a reliable supplier and we also threatened Indonesian food security.

The Australia Government must be proactive in engaging with Jakarta on all areas of trade and economics, national security and the important issue of asylum seekers. This includes redressing the imbalance that around 17,000 Indonesians study in Australia and only 200 Australians study in Indonesia.  A modern version of the “Colombo Plan” could address these concerns and create new opportunities for more young Australians to study the language and customs of this diverse country. One would hope the Asian Century White Paper addresses these issues.