Australian Embassy

Welcoming remarks at ANU’s Indonesia Update Conference on Economic Dimensions of COVID-19 in Indonesia: Responding to the crisis

Australia’s Ambassador to Indonesia, Gary Quinlan – 7 September 2020


Selamat pagi.

Thank you Vice Chancellor Brian Schmidt and a big welcome to the many Indonesian colleagues who have joined us. Brian heads a great national institution which has been instrumental over decades in deepening public policy debate in Australia. And in pioneering significant Australian outreach to our region.

In this endeavour – for which we owe ANU a big thank you – the ANU Indonesia Project, established in 1965, is a standout success. As Brian himself just observed, ANU hosts the biggest constellation of researchers on Indonesia outside Indonesia and produces some the world’s best and most acknowledged research on the country. More than that, it has developed enviable institutional networks. And contributed significantly to building a cohort – now and for the future – of highly skilled individuals in Indonesia itself. 

On top of all this, the work ANU does on Indonesia has become influential in helping to frame public policy in Indonesia. Through debate – based on the evidence – and through expert advice.  This is a comparative advantage we need to preserve and grow. I know that before COVID Professor Schmidt was looking closely at how these existing strengths could be leveraged into a wider institutional and research relationship with Indonesia. And I would encourage him and his colleagues to continue down that track.

This annual Indonesia Update Conference has become totemic for Indonesianists everywhere. And beyond the universities, for government, media, the private sector, NGOs.  Eighteen hundred people have registered for this week. It can be controversial at times, depending on the subject of the day. No problem – as long as debate is built on the evidence. The conference is important because Indonesia is so important.

DFAT has supported the Indonesia Project since the 1980s. A week ago we recommitted to our funding.

The next few days represent the first comprehensive analysis of the effects of the COVID-19 crisis on Indonesia’s economy and on the Government’s response to it. I won’t anticipate the expert discussion itself. I’m here to learn.

Like most governments, the Indonesian government has itself been learning as COVID has wreaked its devastation. You only have to look at the changing growth forecasts to see how uncertain and fast changing economic conditions and the public health threat are. The latest forecasts – from various sources – range from a 3.6 per cent contraction to a 1.4 per cent expansion over the year. The last quarter was minus 5.32 per cent, the lowest since the Asian financial crisis.  Australia’s last quarter has put us in recession and was the lowest since World War II.

I will be interested to see your assessments of the way back to recovery:

  • What is the right balance between public health and economic reopening? how much effective control of the virus is needed for future economic growth?;
  • How effective are the economic stimulus packages the government has announced? And the social protection funding, which is so essential?
  • How can the public health system be improved? And universal health coverage achieved?
  • Can the government sustain an intelligent, targeted infrastructure spend?
  • How effective can reliance on the SOEs, seen as vital to growth and jobs, be?
  • How confident are we in the monetary policy response, which has been strong to date?
  • Will the government move beyond temporary stimulus measures to the longer-term structural reforms that are needed – including to grow the private sector, especially SMEs, and to reform tax?

These are hardly original thoughts. But the answers to these and other dilemmas are important to all of us committed to Indonesia’s success. 

Its economic success is, of course, self-evidently vital to Indonesia itself but equally to the Indo-Pacific region. Indonesia and Australia are the largest economies in South-east Asia, both G20 economies. Other economies are more internationally exposed than Indonesia, are more innovative, have greater global capital flows. So much of Indonesia’s economy is domestic. But the health of its economy does matter to the broader economic health of our region.

And it matters in underwriting Indonesia’s broader strategic weight which is so vital to the strategic resilience of the Indo-Pacific.

South-east Asia is at the heart of the defining geostrategic competition – including geo-economic competition – along the US/China fault line in the Indo-Pacific.

COVID-19 has compounded the strategic risks. Shifts in the distribution of power across the region are accelerating. Pressures on rules, norms and institutions are more acute. US/China relations are coming under further strain. Disinformation and cyber intrusions are threatening sovereignty, including the integrity of our economies and our critical infrastructure and our digital economic future.

Middle powers like Indonesia and Australia have a decisive role in stepping up together to meet these challenges. We need to be resilient ourselves, of course, to do so.

I’d like to finish with a few comments on Australia and Indonesia as partners.

Our two countries have been at a turning point in our relations over the past couple of years. This is because our region – pre COVID – has been at a turning point: geo-strategically and geo-economically, and through unprecedented technological and ecological change. The resilience of both countries is being challenged and each of us had made a very deliberate choice to embrace the other more closely to work together to frame a more resilient region.

Politically, relations between the two governments have never been closer. The new Comprehensive Strategic Partnership and the Indonesia Australia Comprehensive Economic Partnership Agreement are game changers. And they represent the peak of a huge amount of practical operational cooperation beneath them – often the closest in the region.

Our Development Cooperation Program pivoted immediately to Indonesia’s COVID response. It is a sophisticated program and has made Australia Indonesia’s partner of choice on policy and institutional development, on resilient economic governance, and in building technical and intellectual capacity.

This brings me back to where I started. This broader partnership of Australia and Indonesia perfectly aligns with the ANU Indonesia Project.

When President Widodo spoke before Australia’s Parliament in February of this year – the first time he had addressed another country’s parliament – he said “Indonesia has no greater friend than Australia”.

That’s how it should be. And I think our Indonesian colleagues will find that you have no better partner.

ANU is a strong part of that contemporary partnership.

Terima Kasih