Trading next door? Best
know them first
Harold Mitchell seems an OK guy. A seriously rich media buyer and
philanthropist concerned about health and Indigenous art, and also interested
in Indonesia.
His personal involvement with the Republic spans ‘many
decades’, originally in advertising and now beef. He chairs the Australia Indonesia Centre, set
up by Tony Abbott two years ago with an impressive board.
It has just produced a 102-page upbeat report titled Succeeding Together touting AUD 3
trillion business opportunities.
(Download free at http://australiaindonesiacentre.org/
)
The AIC’s optimism is based on Indonesia’s size (it’s the
world’s fourth most populous nation), its growth, particularly in the so-called
middle classes, proximity, and possible emergence as a world power, though
unlikely under the inward-looking nationalist
President Joko (Jokowi) Widodo.
After visiting Yogyakarta last month (Nov) with Trade Minister
Andrew Robb, Mitchell used his Sydney
Morning Herald column (http://www.smh.com.au/business/the-economy/lets-beef-up-our-relationship-with-indonesia-20151119-gl3efi)
to praise the possibilities for trade with our giant neighbor.
Robb led the 350-strong delegation billed as Australia’s
biggest and garnered plenty of positive publicity. Less well known is that as
the Qantas Airbuses jetted south, JAL Boeings deplaned more than 1,000 Japanese
on a similar mission.
They got to meet Jokowi in his palace, while the Australians
only managed a meal with Yogyakarta’s Sultan Hamengkubuwono X, a politically minor figure.
(Japan is the second biggest investor in Indonesia behind Singapore. Then comes South Korea, the UK, the US, Malaysia, the Netherlands, the
British Virgin Islands, Hong Kong and China.)
Nonetheless anything that helps bond Indonesia and Australia
has to be good. Positive outcomes include a promised relaxing of our onerous
visa rules and bilateral trade talks starting next year. But to cement these
worthy ambitions Mitchell and the AIC must first lay down a hardstand of market
realities and shirtfront their masters about the problems.
Only 250 Australian companies are doing business in
Indonesia. There used to be 400. What went wrong? Are public perceptions infecting board
decisions?
The Lowy Institute has done the polls: ‘Australians’
feelings towards Indonesia, which have never been warm and have at times been
characterised by wariness and even fear, have fallen to their lowest point in
eight years.’
If the chance to make big bucks is so good why is it
necessary to bang the drum, and so loudly?
Any CEO worth her or his salary plots their own course; they don’t need
politicians and public servants to GPS the honeypot.
Or is the government just using business to clear the road
for diplomats to follow after the executions of Chan and Sukumaran?
Mitchell highlights Indonesia’s tertiary institutions. Sadly none of its 400 plus universities is ranked
among the world’s top 500. There are
some fine campuses with professional overseas links, but an abundance of degree
mills; quantity is not a synonym for quality.
Indonesia’s ‘commitment to creating clever generations’ is
about equal to our government’s determination to arrest the decline in
Indonesian studies. The local term is
NATO – No Action, Talk Only.
‘Middle class’ is the
wrong label for Indonesians’ growing affluence because it suggests they share
our living standards. A family in this
category might have a motorbike on hire purchase, can meet school fees for the
‘free’ education, and both parents have jobs that pay more than AUD 500 a month.
Consumers certainly, but not within co-ee of Australian earners
and spenders.
Canberra’s politics provoke despair, but our operators are first-day
kindy kids against Jakarta’s knuckle-cracking oligarchs whose ideologies are
power and protectionism.
Many institutions are rottenly fraudulent (Indonesia ranks 107
on the Corruption Perception Index); graft impacts almost every contact with
the public service. Some scams are large
enough to buy an Australian cattle station.
The endless scandals plus widespread disappointment with a
lacklustre president could crash the government should the opposition parties
discover unity. That doesn’t inspire investor confidence.
In Indonesia it’s almost impossible to succeed without
wading in the cesspit. To enforce a
contract requires trust in the law.
That’s absent. Check the Churchill Mining saga, or Newmont’s Batu Hijau
mine disputes to get a feel for the hazards.
For the personal risks read The Jakarta Globe’s series on the conviction and acquittal of
teachers on allegedly fabricated child sex charges at the Jakarta Intercultural
School. http://jakartaglobe.beritasatu.com/news/jg-exclusive-jis-teachers-bantleman-tjiong-speak-first-time-since-exoneration/
Though Indonesia says it wants investors, it’s doing little
more than shaking hands. A boots-on-the-ground
assault on corruption would be a start.
So would a public service revolution to attract the smartest, not just
those seeking security and pension rights.
The nation’s infrastructure is in an appalling mess. The
government knows this but seems at a loss on ways to fix. There’s a lack of discipline and direction. Decisions are made and reversed on a regular
basis.
Foreign companies can prosper. Scores of small traders who live in the
Archipelago do well, don’t wear suits and didn’t ask the government to hold
their hands.
They say newcomers require time, patience, flexibility and a
deep understanding of the culture and the differences to succeed. They also
need to come from an environment that thinks well about its neighbour.
That’s why promoting Indonesian Studies and language in
Australian schools and universities is so long-term critical. The government’s
failure to address this undermines Robb and Mitchell’s mission.
##
(First published in On Line Opinion 3 December 2015. See: http://www.onlineopinion.com.au/view.asp?article=17864
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