Jokowi to Visit Australia: What to Expect?

26 October 2016 Jarryd de Haan, Research Analyst, Indian Ocean Research Programme

Background

Indonesian President Joko “Jokowi” Widodo is expected to visit Australia next month. The visit follows Australian Prime Minister Malcom Turnbull’s meeting with Widodo in Laos on the back of the 2016 Association of South-East Asian Nations (ASEAN) summit. The one day visit in Laos was seen as a positive turning point in bilateral relations following the executions of Australian drug smugglers Andrew Chan and Myuran Sukumaran, after which Canberra temporarily recalled its ambassador to Indonesia. During the brief visit, both leaders discussed economic co-operation, maritime co-operation, counter-terrorism and a visit to Australia by Jokowi. It is expected that similar issues will be raised in the upcoming visit. Jokowi is expected to be in Perth on 12 November for an Indonesian business summit as well as visiting Canberra and Sydney for formal talks including a parliamentary address.

Comment

Jokowi’s priority for the visit will likely be to secure more investment from Australia. Currently, Australia invests very little into Indonesia, preferring instead to put money into the Singaporean economy. As pointed out by Thomas Trikasih Lembong, chairman of the Indonesia Investment Co-ordinating Board, only $2 billion has been invested into Indonesia by Australian companies in the past five years. Singapore, on the other hand, received $21.2 billion in investments from Australia in 2015 alone. Securing more investment is a top priority for Indonesia as the money is necessary to develop the infrastructure needed to sustain economic growth. As noted in a recent Strategic Weekly Analysis, thirty infrastructure projects that have been given priority by the Indonesian government for the period 2016-19 will require investments of around $500 billion but just over $140 billion worth of investments have been made across all sectors over the past five years.

Turnbull’s focus in regard to economic relations is likely to revolve around the cattle market. Last year, Australia exported 618,319 cattle to Indonesia for a total FOB (Free On Board) value of approximately $1.6 billion. The Indonesian Government has recently announced that it will issue permits allowing the import of some 700,000 Australian cattle into Indonesia in 2017. This is a welcome target for Australian farmers given concerns earlier in the year about Indonesian plans to decrease reliance on Australian cattle by importing stock from India. At the same time, however, stricter requirements have been set for Indonesian importers with a new trade rule stipulating that one of every six cattle imported from Australia must be for breeding purposes. This rule has proven to be unpopular with some Indonesian businesses and has heightened uncertainties among Australian farmers. Speaking to Rural ABC, David Stoate, from Anna Plains station, spoke of these uncertainties:

The logistics are difficult on the Indonesian end because they just don’t have the land to use for breeding cattle… The live trade between the two countries has evolved because we are good at breeding cattle in northern Australia and Indonesia is good at feeding them, and I think that’s what both countries need to focus on.

With Australia’s cattle exports having recently recovered from a blanket ban introduced in 2011, long term plans for a stable market in Indonesia will be high on the Australian agenda. This may mean pushing for the loosening of restrictions.

Counter-extremism could also feature in the discussions, even if briefly. With Iraqi and Turkish forces battling the so-called Islamic State (IS) in Mosul, there is a risk of fighters in the region returning to Indonesia and Australia. Indonesian police recently named close to five hundred Indonesians who had left the country to join IS in Syria, although this figure is likely to be considerably higher given that it does not account for those who may have slipped under the authorities’ radar.

It is worth mentioning, however, that proportionate to its population, the amount of foreign fighters originating from Indonesia remains very small. Still, dealing with these fighters will likely be high on the agenda of Jokowi given the recent attempted machete attack on a police officer in Jakarta last week that was purportedly inspired by IS. Given that, it will be beneficial for both countries to enhance their joint counter-terrorism strategy for the longer term. There has been some progress towards this, with agreements regarding information sharing and counter-terrorism financing at the 2015 Counter-Terrorism Financing Summit. Little has changed since the summit, despite the Jakarta attacks earlier this year, leaving the overall level of co-operation rather limited but with scope for more.

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