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Fresh air for Aus-Indo trade relations

James Nason, 02/12/2015

Trade relations between Indonesia and Australia appear to be back on the mend following successful visits to the country by Prime Minister Malcolm Turnbull and Trade Minister Andrew Robb.

Jakarta-based trade expert John Ackerman, the former chief of MLA’s Indonesian office, told last week’s Livexchange conference in Darwin that he could not emphasise enough the significant changes and new level of optimism both visits had created within Indonesia.

Discussions to develop an Indonesia-Australia Comprehensive Economic Partnership Agreement were now back on the table after having long been stalled.

Mr Ackerman said Indonesia also appeared to be working towards a far more open agenda, with indications that it is now interested in joining the Trans Pacific Partnership and working towards more regional trade agreements.

Indonesia will also be a key member of the ASEAN economic community which will open next year. It will be the largest emerging economic bloc in the world and the seventh largest globally.

“The combined GDP of this particular area will be something just sort of US $3 trillion, and people are estimating it will provide the potential of up to $3 trillion in trade growth over the next 10 year period,” Mr Ackerman told the audience.

For almost 200 years Australia’s geographic location had been the bane of our existence, Dr Peter Barnard told the conference.

Being located at the south of the Southern Hemisphere while all of our markets were in the northern hemisphere had been an enormous disadvantage.

“But now our proximity to Asian markets and to a lesser extent Middle East markets is one of our advantages,” Dr Barnard said.

“The voyage from Darwin to Jakarta confers enormous advantage in shipping costs compared to Brazil.”

Various figures cited during the conference supported the story of Indonesia’s projected demand growth for beef. Jakarta alone is expected to be home to 50 million people by 2040. Indonesia’s population will grow from 255m to 290m at the same time. Middle-class income earners (US $10,000-$25,000 a year) will grow from 9pc of the population in 2015 to 25pc in 2019. 50pc of Indonesia’s 255m people are under 29 years old. 80pc are Muslim and do not eat pork.

 

 

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