The shape of the world a generation from now will be influenced far more by how we communicate the values of our society to others than by military or diplomatic superiority. William Fulbright, 1964

Thursday, December 03, 2015


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 )  
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 ( 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.
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:

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