By Steven Ciobo MP
After my visit to Jakarta last week, I am more convinced than ever of the great opportunities to expand trade and investment between Indonesia and Australia. At a time when the world is in need of economic leadership, our countries can demonstrate how open markets contribute to growth and create jobs.
It’s looking increasingly likely to be a long journey back for the global economy; for many nations, government expenditure is already at its limit while interest rates are at historic lows.
What is clear is that there are no easy answers.
But what is even clearer is that we need vision. We need a new way of thinking. We need trade, even more so in the face of rising protectionism.
It’s been proven that protectionism is an ironic term, because it doesn’t protect at all, it leads to higher prices which keeps the poor in poverty.
Trade is one of the few substantive tools now available to policy makers to lift global growth.
Against this backdrop, I’m pleased to say Australia and Indonesia are more committed than ever to concluding a comprehensive, bilateral trade agreement, the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA).
Concluding a deal and securing its value to both countries is also the message from business. Indonesian CEOS want to increase participation in the global economy, be more competitive, boost jobs, and create an environment which attracts investment.
We can show real global leadership.
Such a partnership would not just be about traditional trade ties, it would also result in greater cooperation between our economies to tap into the broader Asian market and make trade and investment flows smoother. IA-CEPA will deliver stronger two-way trade and investment that will bring higher growth and create jobs in both countries.
I was delighted to visit Coca Cola Amatil’s production plant in Bekasi. This Australian company has created 12,000 jobs in Indonesia. It is also a leader in workforce training and skills development.
Coca Cola Amatil’s contribution is an example of how Australia does not see Indonesia simply as a market. We see Indonesia as a partner.
A high quality IA-CEPA will support Indonesia’s own ambitions to become a competitive supplier of goods and services, harnessing Australian expertise to strengthen Indonesia’s own industries through trade and investment.
Australia and Indonesia have great potential for strong partnerships in food, making healthy and affordable products more available to consumers. This will also meet President Widodo’s commitment to food price stability for staples.
I had a taste of what we do together when ordering an Australian favourite – Tim Tim Chocolate biscuits – in Jakarta. Delivered by Gojek, I sampled a classic Australian recipe, but made in Indonesia. Ready market access for products like sugar, wheat and salt will help Indonesia’s first class food processing industry compete on a level playing field with regional competitors. Again, Australia is a natural partner.
Our strength in services and capacity for investment can partner with Indonesia to meet its economic and development objectives. This includes our expertise in: mining technology and financial services like banking and insurance. There is also enormous scope for IA-CEPA to meet Indonesian demand for a more highly skilled workforce by harnessing Australian expertise in education.
Our partnership in education has proven results. Australia is Indonesia’s destination of choice for foreign study. While in Jakarta it was my pleasure to attend an event celebrating Indonesians who had studied in the financial technology sector in Australia.
I’m struck by the enthusiasm in Indonesia for building infrastructure and attracting private finance. Last year, when IA-CEPA negotiations were relaunched, Australia announced a $300m infrastructure development program for Indonesia. A key priority will be designing bankable infrastructure projects for private financing. Australia sees this program as our investment in our economic relationship with Indonesia.
The world is looking desperately for global leadership. Australia and Indonesia find ourselves in a position not only to demonstrate this leadership, but also to cement our own economic security and prosperity. We can show the way forward, to our own benefit and as a good example to the rest of the world.
Steven Ciobo is the Australian Minister for Trade, Tourism and Investment.