Indonesia may be the world’s fourth most populous nation – with more than 270 million people – but Australian news coverage of it typically involves three things: beef, boats and Bali.

Anthony Albanese’s visit to Indonesia in his third week as prime minister is an important sign the relationship can’t be defined by domestic concerns about asylum seekers, live cattle exports and drug smuggling.

Accompanied by Foreign Minister Penny Wong (who speaks Bahasa) and Science and Innovation Minister Ed Husic (whose Muslim faith was of interest to the Indonesian press), Albanese has made it clear Indonesia is of utmost diplomatic importance to Australia.

Calling on Jakarta first

Albanese has followed a recent tradition of Australian prime ministers heading to Jakarta early, before London or Washington. His predecessor, Scott Morrison, visited Indonesia in September 2018 as his first port of call. So too did Malcolm Turnbull and Paul Keating.

Indonesia is perhaps the Australian continent’s first trading partner.

Evidence from the 1600s shows the indigenous fishers of Arnhem land traded sea cucumber and other goods with counterparts from Makassar – on the island now known as Sulawesi – which the Makassarese then sold to Chinese merchants. Makassar remains an important port, which Albanese visited after meeting Indonesia’s President Joko Widodo at his presidential palace.

Room to grow

As of 2020, Indonesia is Australia’s 13th biggest trading partner, worth A$17.8 billion in two-way trade.

Almost 2,500 Australian businesses export goods to Indonesia.

But in many ways Indonesia is still underdone as an economic partner – not just when compared with China and India, and our longstanding partners in Japan and South Korea, but also with southeast Asian neighbours Singapore and Thailand.

More Australian small and medium-sized companies export goods to Fiji than Indonesia. And despite Indonesia’s massive population, just 250 Australian companies have a presence in Indonesia. This compares to more than 3,000 in China.

Indonesia hasn’t attracted manufacturers looking for low-cost opportunities like China, Vietnam and Bangladesh. Foreign companies have mainly gone there for its massive domestic consumer market, especially the urban middle class in cities like Jakarta, Yogyakarta and Surabaya.

So, there’s still a great potential for Australian trade and foreign investment to help build capacity way beyond boats, beef and Bali.

Source: The Coversation

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