Opinion: Abbott’s humility has set the scene, now its Jakarta’s turn

Ross Taylor, Indonesia Institute, 04/10/2013


Tony Abbott has, depending on which way you look at it, simply capitulated to his Indonesian hosts during his recent visit to Jakarta, or exercised great humility towards a country that will play an enormous role in our region in the future.

In Jakarta it is seen as the latter and that can only be a good thing for both countries.

But now that Abbott has formally acknowledged that Australia had made mistakes, and had done things that have harmed the opportunities to build closer ties, the issue is whether Indonesia will do the same.

Indonesia was right to feel very aggrieved over Australia's handling of the live cattle export crisis, and also annoyed at some of the more 'radical' policies from the then Opposition suggesting Australia could pay Indonesian village wardens to 'dob-in' people smugglers, and buy back fishing boats. It was important that Prime Minister Abbott acknowledged the harm that has been done.

But the real challenege now for Indonesia – at the start of what wll be a very 'robust' election cycle where nationalsim is on the rise – is to acknowledge that it too has taken actions that have worked against building closer relations with Australia and the region.

There are opportunities in education, health and in business where Indonesia could 'partnership' with Australian companies to improve living standards and opportunities for their country.

No greater example of the importance of 'partnerships' is within the agriculture sector.

Indonesia's agriculture sector has superb soils, abundant rainfall of plenty of labor-already employing 41 million people, but the prodictivity of their farms is extremely low with farmers generating around $3000 per year per farmer compared to $9000 in Malaysia for example.

A recent McKinsey Report showed that Indonesia, on current projections, would produce around 185 million tonnes of food by 2030.

Yet with improved productivity that figure could be 310 million tonnes each year, providing not only enough food for Indonesia's growing population but also – and this is the key point – being able (with Australian partners) to add-value and export surplus foods to 'third-party' countries in the Middle-East and Asia.

But to do this, Indonesia has to acknowledge that a policy of increasing tarrifs for example to protect poor agriculture practices will only hold back the huge opportunities that can be created in this sector. Indonesia needs investment and expertise in rural infrastructure, training of farmers, cold supply chains, technology, irrigation, farm amanagement and also access to good quality seed. We are very good at all of these things; in fact Australia is arguably the best in the world, so why not put our knowlegde and skills together with Indonesia's soil, rainfall, abundant labor and strategic location so that both countries win?

Providing Indonesia can put its nationalistic sentiments to one side, and work with Australia to build the agriculture sector, the impact will be enormous for both countries.

Indonesia actually doesn't have a choice if it wants to feed its growing middle-class in the future. Australia is perfectly placed to partner their neighbour in this critical area. We should start with the cattle industry whereby Indonesia can buy-into our breeding cattle stations, and Australian companies take an interest in feedlots and processing companies in Indonesia.

So following Mr Abbott's visit, the 'challenge' is now not so much for Australia, but with Indonesia to open-up opportunities for business to seize these opportunities in all sectors – if indonesia will welcome the change and create the genuine environment for business to flourish.

And that will be the challenge for the Indonesian leadership over the next 12 months.


* Ross Taylor is the chair of the WA based Indonesia Institute. In 2013 Mr Taylor was appointed by the Governor-General of Australia as a Member of the Order of Australia (AM) for significant services to the Australia-Indonesia relationship, and was named by the Indonesian Government "Australia's Presidential Friend to Indonesia – 2013".



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