Address by HE. S. Wiryono Ambassador of the Republic of Indonesia
To Australia On
'Building a cooperative approach to the future' To the
23rd joint AIBC/IABC Business Conference
18 June 1996, Melbourne, Australia

Mr chairman,
His excellency foreign minister alexander downer,
Bapak sanyoto sastrowardoyo, bapak ibrahim hasan,
Bp. Woolcott, chairman, australian - indonesia institute,
Mr. Ralph evans, managing director, australian trade commission,
mr. Bob aitken, chairman of aibc,
bp. Siagian, chairman of iabc
ladies and gentlemen,

First of all let me thank peter nevile for the very generous and comprehensive introduction, and it is indeed a great honour and pleasure for me to be able to join you today in your discussions on "building a cooperative approach to the future". I should therefore like to the australia-indonesia business council and the indonesia-australia business council for this unique opportunity for me to share a few considered thoughts on the relations between our two countries in the light of this theme. It is a timely and relevant theme, for the choice of which i should like to commend the aibc-iabc. As an indonesian ambassador who has just begun his tour of duty in australia, I cannot think of a more auspicious way to gain a useful insight into the policies" and the 'style' of the newly elected australian government than to participate in a forum such as this where ' leaders of government and private business of our two countries have come together to discuss the future directions of their relationship and to explore ways of strengthening and deepening that relationship. Just now we have had the benefit, of a frank and enlightening discourse by h.e. foreign minister alexander downer and it is my hope to be able to complement his important message with a presentation of the indonesian view of the cooperation and relations between our two countries.

Since there is a preponderance of businessmen and entrepreneurs in this gathering of ours, i shall try to dwell upon the economic aspects of australian-indonesian relations. I shall, however, always be mindful of the fact that the economic aspect of this relationship cannot be removed from the context of the overall relationship. I shall therefore also have to touch on various non-economic aspects of the relationship - although admittedly it is in the economic sphere that the relationship between our two countries has been growing stronger in recent years. And it is in the political-cultural sphere that the relationship has had to bear its share of irritants, problems and, now and then, crises. I must hasten to add, however, that in the short time that i have served in australia - since march this year, i do see a great reservoir of goodwill between our two countries which has made possible, not only a stronger bilateral relationship, but also an effective partnership in the endeavour to achieve and maintain regional peace, stability and prosperity.

In the past, we have built many bridges between our two countries. These have taken the form of political and security dialogue, cooperation for economic development, trade, and interaction in the field of education and human resources development. We have to keep on strengthening these bridges because it is through them that we get to know each other better and learn from each other and become more effective partners, and more importantly, better friends. And indeed, when we think of australian-indonesian relations, we should emphasize these bridges as well as all those factors and realities that unite us.

admittedly there may be some truth to the oft-repeated observation that australia and indonesia are as different from each other as any two nations can be. For australia grew into a nation in several stages: first, it was a grouping of several colonies, all dependent on britain; then it became a self-governing territory; and then it eventually evolved into a highly developed multicultural nation. It is apparent that today australia is steadily becoming even more multicultural with infusion of asian migrants. It is also apparent that while its historical and cultural tees with the west are durable, australia today is politically, economically and security wise getting more thoroughly integrated with the asia pacific region.

Indonesia, on the other hand, is a nation that is thoroughly oriental. Since it is highly pluralistic, it has always placed a great premium on national unity. Its culture has, since ancient times, absorbed layer-upon-layer of the world's great civilizing influences: hinduism, buddhism, islam, christianity and, in recent times, it has taken whatever it can feasibly and salutarily imbibe from the west. While we were transformed by these influences, we did not cease to be indonesians - we became even more indonesian as we made these influences uniquely our own as we absorbed them. This process con s today as we continue to become that nation that we aspire to be.

Although australia and indonesia have vastly different historical and cultural backgrounds, geography has inexorably made them neigbbours and neighbours affect each other in many ways - including and especially in matters of security. Australia was certainly motivated by security concerns as much as by human sentiment and solidarity when it involved itself in a complicated and delicate diplomatic process which led to the preservation and international recognition of the independence which indonesia proclaimed in 1945. After the dutch military launched its so-called 'police action' against the fledgling indonesian republic in late 1947, the australian representative on the un security council submitted the dutch-indonesian conflict as a case of decolonization. As a result, a three-power commission was established and australia agreed to represent indonesia on that commission. The netherlands chose its neighbour, belgium, to be its representative on that commission, and then both parties chose the united states to chair the commission. The rest is history. For this, australia will always have a place in the heart of every patriotic indonesian. Indeed, in a moment of grave crisis when its fate as a nation hung in the balance, indonesia discovered a friend. Since then, that friendship has survived and even flourished in spite of the stresses that it had to undergo at such times as when indonesia adopted a policy of confrontation on the creation of malaysia, when indonesia had to seek the return of irian jaya to the national fold, and when east timor integrated itself with indonesia. In spite of such crises, australia and indonesia continued to interact culturally, and then continued to broaden and deepen their political cooperation in the face of a rapidly changing global and regional environment. Indeed, in the post-cold war era, australia and indonesia share a deep sense of responsibility for regional peace, security and stability. At the same tae, the complementarity of their economies have occasioned and, i believe, will continue to occasion positive developments investment, trade, tourism and education. Interaction in the field of education is particularly important to indonesia because of its felt need to develop its human resources rapidly in order to be competitive in a globalised economy.

Up to the 1970s, there was a formidable cultural barrier between australia and asia, indonesia in particular, however, with the entry of britain into the european community, many australians must have begun to feel that while australia is steeped in anglo-saxon culture, the stark reality is that australia is in an asian -neighbourhood and its fortunes, as well as its future, are in asia.

Ladies and gentlemen we in indonesia have witnessed australian policy and attitude towards asia take a positive turn. Australia's growing closeness to asia was eloquently manifested when, at the turn of the last decade, it hosted the conference which saw the founding of apec. And it may well rise to a new level with the forthcoming visit of prime minister john howard to indonesia. So close has australia grown toward asia that it has been publicly mentioned in southeast asian official circles, that australia could well eventually become a member of asean. This will never be realised, of course, because asean, by definition, covers only the ten southeast asian countries, and with the assumption to membership by laos, myanmar and cambodia in a few years' time, the asean family will soon be complete. Australia, although not a member of the family, is very deeply engaged with asean, being one of its most active dialogue partners and one of the most enthusiastic and perceptive participants of the asean regional forum (arf).

In the economic sphere, there is also an undeniably huge gap between the stages of development of our two countries. Australia has always been one of the richest nations in the world, with considerable achievements in industry and technology. On the other hand, indonesia, through much of its history, has been categorised as among the developing nations. During the past two and a half decades, however, indonesia has achieved such remarkable economic growth that it is now considered as one of the dynamic economies in east asia, but it still is a developing country with all the vulnerabilities and needs of a developing country.

This gap in the stages of their economic development is no obstacle to effective cooperation. On the contrary, the economies of the two countries can complement each other and therefore economic interaction is not only possible but desirable, and in fact booming, especially because the two countries are living in a region that is in a ferment for liberalizing, trade and investment and for cooperation for economic development. For example, asean has been so successful in promoting cooperation and dialogue that in 1973, the asean post ministerial conference was established to discuss economic matters and eventually had to expand its agenda to include political and security issues. Both australia and indonesia are involved in this process as they are also involved in the two most important forums in the region today: apec in the economic sphere and the asean regional forum (arf) in the political and security sphere. As member economies of apec, australia and indonesia are committed to the realization of a vision of an asia-pacific community, in recognition of the growing interdependence of this economically diverse region comprising developed, newly industrializing and developing economies. Operationally, they are both committed to the achievement of free trade and investment - by the year 2010 in the case of australia and the year 2020 in the case of indonesia. As arf participants, they are committed to the management, through dialogue and consultation, of strategic change in the region so that a stable e relationship among the major powers, as well as the regional powers, can evolve peacefully.

Although cooperation between australia and indonesia has grown tremendously a regional and global context, their strictly bilateral relations remain important and will grow in importance as both nations get to know each other better. Each year, more and more australian companies are reaching out to new markets and venturing to new investment areas, including, of course, indonesia and indonesian companies, although to a lesser degree, are also endeavouring to establish a growing presence in australia. In sum, australians and indonesians are interacting and cooperating on a scale larger than ever before. This 18 clearly manifested by the fact that over the last decade trade and investment flows between our two countries have growth at a phenomenal rate. Also showing impressive growth are our linkages in tourism and education. As may be expected, statistics show that while more australian tourists visit indonesia than vice versa, more indonesian students come to enrol in australian educational institutions than vice versa.

I should now, ladies and.gentlemen, like to comment in greater detail on these areas of cooperation between our two countries.

First, let us look at our two-way trade: over the last decade, the value of our overall merchandise trade rose dramatically from a$716 million in 1985 to over a$3.7 billion in 1995. Indonesia is now ranked as the tenth largest export market for australia as it imported a$2.39 billion worth of merchandise from australia in 1995. Australia's major exports to indonesia in 1995 included petroleum and oils (a$282 million), cotton (a$205 million), livestock (a$143 million), aluminium (a$129 million) and iron and steel (a$120 million), wheat exports also account for a sizeable percentage of total exports, but the export value is not separately available.

On the other hand, indonesia in 1995 was ranked as australia's 15th largest import source, which is somewhat of a disappointment because in 1993 it was ranked two places higher. The value of indonesia's exports to australia totalled a$1.34 billion, with the major items being petroleum and oils (a$505 million), textile yarn and fabrics (a$153 million), wood manufactures and plywood (a$53 million), furniture (a$48 million) and natural rubber (a$47 million).
I
although in monetary terms, the level of trade between our two countries has followed a sharp, upward trend, opinions vary on whether an op working relationship has been achieved among those who are mainly responsible for the shape and condition of our economies -- the governments and the private/business sectors of our respective countries.

moreover, two aspects of our trade relationship, i believe, present warning signals which should be taken seriously: the first is the growing trade imbalance between indonesia and australia, which has been due mainly to successive years when indonesia export to australia reached poorer than expected levels. A second cause for concern, which is to some extent related to the first, is an insufficiency of growth in each country's contribution to the other's total trade. Indonesian exports still account for only 1.7 percent of australia's total imports and only some 3.2 percent of australia's total exports go to indonesia.

Both of these aspects of our trade relations should be watched carefully. I believe that they present a clear challenge for australia and indonesia to develop effective approaches to enhancing and balancing the trade between them. I do believe that these concerns merit a long look by the aibc-iabc which could work together to find out why indonesian products are finding it increasingly difficult to further penetrate into the australian market, and what can be done about it.

Ladies and gentlemen, in the field of investment, i am pleased to observe that among countries investing in indonesia. Australia has risen in rank to become the ninth largest. On the other hand, indonesian investments in australia, although much smaller, are also growing and are likely to grow further as indonesian companies get more familiar with the investment opportunities offered by this country.

Let me now take this opportunity to tell you of indonesia's hospitality to foreign investment: most foreign investments in indonesia today are in the chemical industry, textile industry, power generan0n and hotel and restaurant development and operation. Australian companies, both big and small, are most welcome in these fields of investment. There are still vast opportunities for foreign investments in telecommunications, power generation and transmission, environment conservation and infrastructure building, in basic industry development including chemicals, steel and cement lndustries, and in textiles, food processing, pulp and paper and computer hard ware and software production. Australia's excellent industrial technology should fit perfectly into these investment areas. Particularly welcome would be australian investments that directly benefit indonesia's small and medium scale enterprises (smes) which we are committed to encourage and promote.

To ensure that the private sector continues playing the role of engine of economic development, the indonesian government shall keep on providing investors with a stable and predictable environment and a conducive macro - economic framework within which to operate. For the last 13 years, indonesia has been opening up its economy through a series of deregulation and debereaucratization packages that have greatly liberalised its import policies and further opened up its economy to foreign investors. The latest of these deregulation packages - by no means the last - was issued just early this month. This time, the deregulation package has removed surcharges on imports of capital equipment and reduced tariffs on 1,407 other items. It also waived the inspection requirement on export goods, streamlined importing procedures, and laid down the framework for an updated anti- dumping policy. Under this deregulation package, the private sector can now form joint ventures with government enterprises to operate bonded zones and warehouses. A further deregulation package may be expected in a matter of months.

Meanwhile, ladies and gentlemen, the tourism exchange between our two countries continues to flourish. Last year, the number of australians travelling to indonesia increased by 62 percent to 452,000 while indonesians visiting australia increased by 29 percent, to 280,000.

More and more indonesians are choosing to visit perth, more than any other tourist destination in the world. Bali has, of course, been drawing in australians in large numbers but what is new, and encouraging, is that an ever increasing number of australians are discovering the charms of the eastern and other remote parts of the indonesian archipelago. The increasing number of visitors to the pristine countryside of indonesia will have a great impact on the environment and bring in new influences which we hope will not be of the negative sort -- the type that would lead to the abandonment of traditional values and the adoption of ways that are foisted as modern but are actually decadent. Before we encounter any such problems, i think it would be prudent that our tourism authorities hold a dialogue on this concern, as well as on the practical aspects of tourism such as improvements in services and the enhancement of travel convenience through such measures as an increase in the number of flight routes or increases in flights on existing routes. I am happy to hear that merpati is starting its jakarta - melbourne direct flight next month. This effort would be well worth the benefits that both countries will derive from an enhanced and expanded tourism exchange, not only for the revenues generated, but, and perhaps more importantly, for the goodwill, mutual understanding and opportunities for cooperation in other fields that would be occasioned by the exchange of visits at the grassroots level.

In the field of education, many indonesians are indebted to australia. It has been estimated that by the year 2000, the total number of indonesians who will have graduated from an australian institutions of higher learning would be more than 100,000. In fact, australia today is the country of first choice among indonesian students who wish to study abroad - surpassing even the united states and that in itself is remarkable. This is not only because australia is right next door to indonesia but also because of the high standards of the venerable australian tertiary education institutions.

Ladies and gentlemen, i am confident that as these indonesian students return home, they will add impetus to the country's social and economic development. They will also form the core of a new generation of leaders in business and government in indonesia who bear australian academic credentials. They will be forever grateful for a pleasant and fruitful chapter of their lives spent in australia and the f ships they shall have forged will certainly contribute to the strengthening and deepening of the relations between our two countries.
On the other hand, i have only the highest admiration for an increasing number of australians at all levels of the educational spectrum who have shown a keen desire to understand indonesia better many of them have even taken the trouble of learning bahasa indonesia or undergoing special courses on how to do business with indonesians. We deeply appreciate such a sensitivity and responsiveness to cultural realities.

Between and among australian and indonesian educational institutions, there are already cooperative arrangements in place. Some of these arrangements involve provision of funds for important education projects in indonesia. The education authorities of both governments, however, may still want to consider looking into the feasibility of variant approaches to education which may better suit the needs of indonesian students in -australia. This variation in approach may be necessary in the light of the fact that their religious, cultural and social backgrounds are vastly different from those of the people of their host country.

Indeed, we have much to. Learn and to do about the differences that make us two distinct nations which have a great potential for a synergistic and mutually fruitful partnership. In any case, our relations are already intensifying in many areas- political, security, economic cultural. They include trade, investment, technology, human resources development as well as intensive cultural interaction. I can therefore confidently say that the ballast of our rela'n0nsht is not only stable but also growing dynamically.

There is a bright future for the asia-pacific region in which australia and indonesia would be key participants. We both aspire to be successful societies and we know that successful societies can only be those that enthusiastically invite, and are able to respond to, --positive and constructive cooperation. We share a common vision -of a world of greater peace, stability through social justice and prosperity, and we adhere to ideals and principles that transcend political systems and culture. This vision, these ideals and principles, and our faith in each others goodwill- cons me basis of our cooperative approach to the future. They will serve our countries in good stead as we retool our respective national capacities and structure and devise new effective ways of dealing with a globalised and interdependent world. And in spite of the jolts and hiccups brought about by our differences, these shared vision, ideals and faith will ensure the preservation and the full flowering of a friendship so well begun when australia took the cudgels for indonesia in the united nations nearly four decades ago.

In conclusion, ladies and gentlemen, i would like to say that geography has made australia and indonesia neighbours, our early history has made us friendly, but political and cultural differences have sometimes caused some misperception and misunderstanding, but i believe that economic and security necessities have made us partners.

What nature and necessity have joined together, it is our duty to nurture carefully.

Thank you.

Melbourne, 18 June 1996