By Andrew Robb
Australian Minister for Trade and Investment
INDONESIA HAS COME an extraordinarily long way over the last
15 years.
Two years after the Asian financial crisis in 1997,
Indonesia's gross domestic product was just $75 billion. Its gross domestic
product has since grown to reach $1.2 trillion today, while over the same
period, the size of the Indonesian middle class has swelled from 4 million to
about 50 million.
For Australia, Indonesia with its 250 million people – more
than half of whom are under 30 – and its rising middle class, is a market and
neighbour we simply cannot afford to ignore. The growth opportunities are immense
– two-way trade with Indonesia is about $16 billion, a tenth of that with
China.
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| Mr Andrew Robb MP |
With this in mind, there is a renewed focus on how we can
work together on areas of mutual benefit. We are determined to grow
business-to-business links and build deeper commercial ties.
There are about 245 Australian companies with an Indonesian
presence, but there is no reason that number should not be 1000.
Over the last two weeks, under the Indonesia Australia
Business Week banner, I led a delegation of 360 forward-looking business
people, our biggest-ever mission to Indonesia. The delegates represented
companies in key areas where Australia excels, including infrastructure,
resources and energy, health and aged care, education, tourism, advanced
manufacturing, agriculture, premium food and beverages. The program comprised 110 separate events and 25 site visits
across four cities
'Meeting of the minds'
Prime Minister Malcolm Turnbull's "meeting of the
minds" with President Joko Widodo, helped create the right atmospherics
for me and my Indonesian counterpart, Thomas Lembong, to confirm that stalled
negotiations for a bilateral trade deal, a Comprehensive Economic Partnership
Agreement, would be reinvigorated next year. My objective would be to conclude
this if possible within 12 months.
While this will provide a platform for future growth, our
business mission produced some immediate results with some excellent deals
consummated between Australian and Indonesia companies during the week.
Careers Australia, for example, launched the Australia
Indonesia Professional Training Centre, a joint venture with local food and
beverage firm Es Teler 77 to grow Indonesia's skill base in the hospitality
industry.
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| Mr Robb witnessing the signing of an MOU between Australia's Blackmores and Indonesia's Kalbe at IABW 2015 in Jakarta |
Newcrest International agreed to undertake mineral
exploration in conjunction with Antam, a large and diversified Indonesian
mining and metals company. And health supplements maker Blackmores announced
its entry into the Indonesian market by partnering with Kalbe Farma, one of the
largest healthcare companies in south-east Asia.
This will team Blackmore's exceptional production and
quality control with Kalbe's scale and established distribution capability.
Additionally, an agreement between the Australian Automotive
Aftermarket Association and the Indonesian Off-Road Association will jointly
promote Australia's quality aftermarket parts, accessories and services to a
growing number of Indonesian auto enthusiasts.
A beginning
This is just the beginning of the types of partnerships we
expect to blossom.
When you deepen trade and commercial ties, new investment
inevitably follows. While in Jakarta I hosted an investment roundtable with a
selection of high net worth Indonesians with a cumulative wealth of about $60
billion. I took this opportunity to showcase major opportunities in Australia,
including northern Australia and found a very receptive audience.
The beef industry supply chain is, of course, an area of great
complementarity between us, and Indonesian companies have made significant
recent investments in Northern Territory cattle stations. Australia is great at
breeding premium-quality cattle and Indonesia has a real strength in fattening
them for market through their feed lots.
It is a similar story for wheat. Australia already exports
about $1.3 billion worth of wheat to Indonesia – compared to live animal
exports of $560 million – with its quality and white flour ideal for noodles
and baked items which Indonesia produces for domestic sale and export.
There are also rapidly emerging opportunities for a wide
array of Australian services in Indonesia, both in the direct provision and in
the building of capacity. Services are needed in response to growing middle-class
demand and they will also be a critical source of future jobs.
Indonesia Australia Business Week was about using the badge
of government to open doors into another important market. It follows similar
successes in China and India. Early next year, the inaugural Australia-United
States Business Week will showcase the new possibilities that are opening up
with one of our oldest trading partners.
Trust is the key to any successful relationship and as our
most recent business delegation to Indonesia has demonstrated, the best way to
build trust is to turn up.
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