Jakarta | Thu, June 9, 2022
In their first meeting since Anthony Albanese was elected prime minister of Australia last month, the two got along well. Joko “Jokowi” Widodo is the president of Indonesia. On Monday, before getting down to business, the two leaders removed their ties and coats and cycled around the verdant grounds of the Presidential Palace in Bogor, West Java.
Jokowi is skilled at establishing rapport, especially with Australian leaders. He led Malcolm Turnbull, who was the prime minister at the time, on a blusukan (impromptu casual visits to meet and greet regular people) in 2015 at Jakarta’s Tanah Abang market.
Jokowi is aware of the value of both good relations with Australia and good relations between the two countries’ presidents. Relationships between the leaders were tense in the past, sometimes as a result of their unpredictable actions. If Jokowi and the Albanese get along well, this is good news for both of their populations, particularly their commercial sectors.
Jokowi’s personal gesture more than makes up for Indonesia’s inability to reciprocate Australia’s declaration that no country is more vital to Australia than Indonesia, which has been expressed frequently by succeeding governments in Canberra since the 1990s. Albanese made Indonesia the destination of his first official bilateral trip since his election on May 21 in accordance with this foreign policy maxim.
This Australian strategy toward its enormous northern neighbor is supported by the knowledge that Indonesia is one of the Group of 20 (G20) largest economies in the world and the projections that it will rank among the top five by the year 2050. The only nation in the world whose foreign policy foresees Indonesia’s ascent is Australia. Australia’s largest embassy in the world in terms of personnel is located in Jakarta.
How far into the future Indonesia plans its foreign policy is unknown. Our political debates, which are more fixated and focused about 2024, most definitely lack it. But even if Australia might not be the most significant nation for Indonesia, it is certainly in Jokowi’s heart going by the warm reception he gave Albanese. The prime minister came to Indonesia with plenty of goodies that only pleased the host nation.
In November, Jokowi will host the G20 conference in Bali, and he unequivocally promised to be there. Instead of making such a promise, his predecessor Scott Morrison pushed Jokowi to refuse the invitation to Russian President Vladimir Putin as retaliation for invading Ukraine. Additionally, Albanese committed A$200 million for climate change and infrastructure projects in Indonesia together with A$470 million (US$340 million) in development aid for the ASEAN area.
The need to improve commercial and investment connections in the bilateral relations, as both leaders acknowledged in separate comments, is far more crucial than these kind gestures. Australia’s top 10 trading partners do not include Indonesia, nor does Australia rank among the top five investors in Indonesian direct foreign investment.
It’s common to draw comparisons between the substantial commerce and investment from Australia to Indonesia, which has 270 million people, and New Zealand, which has only 5 million. Thailand, Singapore, and Malaysia, all of which are ASEAN members, are included as Indonesia’s larger commercial partners.
The total bilateral relations still have their weakest link in the economy. Relationships are susceptible to the shifting attitudes of their governments without deeper economic ties. If leaders continued to act erratically as they have in the past, there would be significant economic and political costs to pay if the two countries participated in more trade and investment.
This quirk in the bilateral relations was intended to be addressed by the Comprehensive Economic Partnership Agreement (CEPA) between Indonesia and Australia, which was signed in 2019. Several of Australia’s top CEOs were part of Albanese’s huge delegation, and they met separately with their Indonesian counterparts.
The private sector is partially to blame for not being aware of the business opportunities in one another’s nations, but another factor is Indonesia’s regulatory structure, which has discouraged foreign investors who find Indonesia’s neighbors Thailand, Malaysia, Vietnam, and the Philippines to be much more welcoming.
The responsibility for making the CEPA’s promised benefits a reality and increasing economic engagement between the two countries falls on both governments as well as their corporate groups. The fact that both Indonesia and Australia have resource-based economies is a common justification for the low trading volume. But as Indonesia goes into the manufacturing and service sectors, some of them hopefully with Australian investment, this should no longer be employed.
If Australia’s future is dependent on Asia, as Australian Foreign Minister Penny Wong argued in an editorial piece published in The Jakarta Post, then we should increase cooperation between Australia and Indonesia, especially in the economic sphere. The gesture has already been made by Jokowi. He gave Albanese the bamboo bicycle to take home, which she rode on Monday.
Just make sure you submit the bicycle to the notoriously tough Australian customs when the prime minister returns home. Susilo Bambang Yudhoyono, the predecessor of Jokowi, received a humiliating reprimand from Australian customs in 2010 for failing to declare the renowned kopi luwak (special coffee prepared by civets) beans that he gave as a gift to Kevin Rudd, the prime minister at the time.
Stronger bonds can be built with the help of good interpersonal relationships amongst our leaders, kind acts of generosity, firm pledges, and mutual respect. Under Jokowi and Albanese’s leadership, we anticipate that ties between Indonesia and Australia will reach new heights.
