Ambassador Gary Qunlan AO
Tuesday, 10 July 2018
Vice President Bapak Jusuf Kalla, Minister Bapak Bambang Brodjonegoro and so many other eminent Ministers from the working Cabinet, together with heads of agencies, State bodies, Governors, Regents, Mayors, and Bapak-bapak dan Ibu-ibu.
This is the beginning of my eighth week as Ambassador here in Indonesia, and I already feel very much at home.
It’s a great privilege to be here today, especially this forum has already established itself, in only its second year, as the preeminent forum to discuss strategies for overcoming Indonesia’s most pressing development challenges.
The theme this year, which is “Regional Disparities”, is obviously particularly important for two countries of the huge size of Indonesia and Australia.
Just a few weeks ago Indonesia, as the world’s fourth largest nation and third largest democracy, held its largest ever simultaneous regional elections.
More than 110 million people voted at nearly 400,000 polling booths across the archipelago, from Medan to Merauke.
This is democracy on a scale that most countries – certainly my own – don’t have to contemplate, and something that would have been hard for most Indonesians to imagine 20 years ago.
Two decades of successful reformasi have seen decisive changes, initiated within the country, in Indonesia’s politics, its economy and its people’s everyday lives.
Since 1998, the poverty rate has more than halved, infant mortality has fallen by 50 per cent and tertiary enrolments have doubled.
Indonesia is a member of the G20, and many estimates put Indonesia alongside the world’s largest economies in little more than a decade.
But the impressive economic gains of recent years as we know have not been felt equally across the archipelago, and that’s why we’re here today.
Western Indonesia contributes around 80 per cent of GDP. Poverty rates are seven times higher in Papua than Jakarta and nearly 90 million people are poor or vulnerable.
In today’s Indonesia, regional disparities remain a major obstacle to – what we want, all of us – broad-based, inclusive growth.
That’s why supporting Indonesia to grow its economy and tackle inequality across the country is at the heart of the Indonesia-Australia development partnership.
In Australia, we have come to understand, with a lot of failures, that building infrastructure, promoting economic development and reducing poverty across long distances and diverse regions is very difficult.
In our experience, there are three big issues when it comes to addressing regional disparity, and getting them right is vital to ensuring better opportunities and growth wherever people live.
They are connectivity, competitiveness and human capital.
Large, diverse countries need large, clever instruments in infrastructure and logistics services to connect people, communities and industries.
Building and maintaining transport and communications infrastructure in huge countries like ours is obviously expensive – so we need cost-effective, innovative infrastructure solutions which make the most of what the private sector can offer, and which meet local communities’ needs and priorities.
Infrastructure development is a priority for the Indonesian government. Australia is one of Indonesia’s longest-standing supporters in this area, providing technical advice on priority infrastructure policy reforms, and funding project preparation, pilots and incentive grants.
We’re helping Indonesia leverage financing for infrastructure in new ways.
But further work is needed to tackle the logistics bottlenecks that increase the cost of basic goods like food and fuel, and constrain the growth of local economies.
In coming years, infrastructure investment needs to accelerate further, including through new types of partnerships with the private sector.
The second big issue – competitiveness – helps enable regional economies to diversify and unlock sustainable new sources of growth.
Australia itself has been able to maintain uninterrupted economic growth over more than two and a half decades – an unparalleled record among developed economies – thanks to a series of economic reforms that have enabled us to build a flexible and resilient economy.
Trade liberalisation and reducing protectionism have been central to growing our economy, helping lower prices and generating greater competitiveness.
The process of course has not been painless.
Putting more energy into the things we do best has required difficult transitions, difficult policy decisions, and difficult implementation – including closing businesses that have been less competitive.
But recent economic modelling shows that trade liberalisation over the past 20 years has led to real GDP growth in Australia of 5 per cent higher than it otherwise would have been.
Like in Indonesia, the agricultural sector is a vital contributor to the Australian economy, and it’s also an industry that has seen dramatic changes.
By focusing on agricultural products where Australia has a comparative advantage, and investing in innovation, we have doubled agricultural productivity over the past 25 years.
The Indonesia Australia Comprehensive Economic Partnership Agreement (IA-CEPA), which our two governments are currently negotiating, will contribute to Indonesia’s economic growth.
Lower tariffs benefit everyone: consumers benefit from cheaper goods, while local industries get access to lower cost and more efficient supplies of inputs.
Improved access for our respective service suppliers and investors helps boost investment, bringing with it new technologies, new skills and new businesses.
IA-CEPA will also help both countries access regional supply chains and benefit from combining our relative strengths, and our comparative strengths – key in today’s global trade environment.
We also know of course that a dynamic digital sector will be critical for our future competitiveness. We need to act now to seize the opportunities of the digital age – harnessing technology to drive growth and create jobs across Indonesia.
Increasing productivity, boosting livelihoods and growing new industries of course requires people with the right skills.
So human capital is the third critical ingredient – particularly education and training that meets the needs of the young in rural and remote areas, including importantly, not just reading and writing, but digital literacy.
Indonesia spends 20 per cent of its annual budget on education, an impressive figure; but of course – despite that big investment – inevitably, as with all governments in all countries, more needs to be done to improve the quality and relevance of teaching, both at the school level and in vocational and technical education and training.
Australia is working with Indonesia to help improve how rural schools teach literacy and numeracy – through our INOVASI education partnerships in remote areas of East and West Nusa Tenggara and North Kalimantan, and through our work with UNICEF in the Papua provinces.
Health is another critical element. Ensuring children and expectant mothers get the right nutrition is vital to preventing stunting and giving kids the best chance to reach their potential.
I particularly want to acknowledge the leadership of President Widodo and Vice President Kalla in driving accelerated efforts to tackle stunting across Indonesia.
Also more work needs to be done to reduce maternal mortality and combat tuberculosis and HIV/AIDS. But Indonesia is making good progress with its commitment to universal health coverage, as we know, by strengthening its health insurance system with special attention to the poor.
In Australia, civil society organisations play an important role in service delivery, particularly for disadvantaged groups in remote areas. We’re working with Indonesia to test new ways to partner with civil society to provide services like early childhood education, help for families affected by violence, and disability support.
And the private sector of course has a decisive role to play as well.
Governments, inevitably, have limited resources, and Australia’s experience in building a world-leading education sector shows that private sector education providers play an important role in supporting the wider public education system.
This is particularly helpful in the critical area of vocational education and skills training, where private trainers are often best placed to deliver the targeted skills industry needs.
Conclusion: New partnerships and new voices
In concluding, I am confident the forum will inspire many initiatives to look at development problems in fresh ways, and Australia looks forward to contributing to this.
I am pleased to announce today that we will fund a new research partnership through the Australia Indonesia Centre: the Partnership for Australia Indonesia Research, which will commence early next year.
This will be centred in the port city of Makassar and surrounding rural areas in South Sulawesi – not Jakarta! – and will involve leading Australian and Indonesian universities.
It will strengthen researcher capabilities, build new research networks with a focus on Eastern Indonesia, and help solve problems across five key themes – transport, infrastructure, energy, water and health.
To conclude, may I again congratulate Indonesia and Minister Bambang on initiating this important event, which my own country is very pleased to support through what we call our Knowledge Sector Initiative – that part of our development partnership with Indonesia which seeks to promote effective public policies, making better use of research, data and analysis.
And I wish everybody well for the next two days, which I’m sure will be a very successful Forum.
Inspire, imagine, innovate – and above all, initiate.