Address by HE. Mr S. Wiryono

Ambassador of the Republic of Indonesia
To Australia

To the Australia - Indonesia Business Council, 23 July 1996
Perth, Australia

Mr Denis Glennon, chairman of AIBC
Ladies and gentlemen.

I am deeply honoured by the invitation extended to me to join in today's luncheon and to address this distinguished gathering. It is encouraging to see that the australia - indonesia business council in perth has so many members and i commend you for your endeavours to promote business links between our two countries.

As an indonesian ambassador who has just begun his tour of duty in australia, i cannot think of a more auspicious way to get to know western australia than to meet with members of the australia - indonesia business council and to exchange views with you.
In the short time that i have served in australia - since march this year, i have felt 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.

Although australia and indonesia have vastly different historical and cultural backgrounds, geography has inexorably made them neighbours 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-indoneslan conflict as a case of decolonisation. 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 economically, culturally, and then continued to broaden and deepen their political cooperation in the face of a rapidly changing global and regional environment.

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.

Although cooperation between australia and indonesia has grown tremendously within 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 is clearly manifested by the fact that over the last decade trade and investment flows between our two countries have grown 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, more indonesian students come to enroll in australian educational institutions. I think the growth in the number of indonesian students studying here in perth in the last few years has been phenomenal.

Let us now look in detail at one of the areas of cooperation, our two-way trade: over the last decade, the value of our overall merchandise trade rose dramatically from $a716 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).

Although in monetary terms, the level of trade between our two countries has followed a sharp, upward trend, opinions vary on whether an optimal 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.

With regards to investment, let me take the 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 generation and hotel and restaurant development and operation. Australian companies, both big and small, are most welcome in these fields of investment. In fact, many companies are and have been investing in indonesia for quite some time as the figures clearly show. In 1995 australia alone invested us$3.71 billion in 38 projects and ranked 9th among 51 foreign investing countries.

There are still however, 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 industries, and in textiles, food processing, pulp and paper and computer hardware and software production. Australias 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 debureaucratisation 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 1,497 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.

Our relations are intensifying in many areas - political, security, economic and cultural. They include trade, stment, technology, human resources development as well as intensive cultural interaction. I can therefore confidently say that the ballast of our relationship is not only stable but also growing dynamically.

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.