FREE TRADE COMING SOON?

                    

Indonesian Free Trade – not there yet

                       

For much of 2019’s last quarter Australian rural journals and politicians were forecasting a bonanza.

2020 is supposed to be the year when the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) finally comes good.  Then tariff gates will be ripped off their hinges as a torrent of produce from Down Under pours into the hungry and overcrowded archipelago next door.

Fresh markets will cry for attention.  A new era of agricultural prosperity will rise.  While Pollyannas chorus, worrywarts quietly mutter. However some grounding in reality is overdue.

First is that nothing will happen till the Indonesian parliament – or President Joko Widodo if the debate gets stuck - ratifies the agreement.  It’s already been approved by Canberra. 

Signing was supposed to happen last month, but it’s not a high priority in Jakarta.  In November the Australian Financial Review reported some politicians concerned about a ‘flood of imports’, reminding colleagues that trade since 2013 had always benefited Australia.

The IA-CEPA does favour Australia, though boosters say Indonesia will be able to increase exports, citing goods like furniture, textiles and fruits.

One problem is market size.  Australia’s population is eleven times smaller than Indonesia’s. Some exporters won’t bother with complex quarantine rules and quality controls unless profits are sizeable.

Australian farmer hopes for an IA-CEPA boon need to be qualified by the realities of international commerce. If Black Sea growers can deliver grains cheaper than the neighbours, then Indonesian bakers will buy from Russia and Ukraine.

Poor rainfall in Australia’s western wheatbelts has kept silos less than full, so even if consumers are keen supplies may not meet demands.

The free trade agreement opens service industries like education and health care to Australian providers. Getting approvals may be the easiest part; the overweight Indonesian bureaucracy is almost impenetrable to those who won’t give ‘envelopes’ so public servants can scissor red tape.
President Widodo knows this is deterring investors and has proposed ‘omnibus’ legislation to consolidate regulations and cut-out overlaps.

Even if successful, it will take years to reform. Indonesia is ranked 73^rd among 190 economies according to the World Bank’s Ease of Doing Business index.  It had the same placement in 2018.  (NZ is number one, Australia 14^th.)

The IA-CEPA ratification delays are a concern, particularly as it’s taken a decade of on-off negotiations to get this far.  However the deal will probably go through unless something is said or done to rouse the wrath of ultra-sensitive Indonesians and stall settlement.  

Upsetting the people next door has long concerned Canberra, as the release of year 2000 Cabinet papers shows. The Howard government wouldn’t offer refuge to 1,500 East Timorese the UN believed were at risk for fear of stirring Jakarta.


Another reason to put pens in the hands of Indonesian lawmakers asap.

The last irritant was in 2018 when Prime Minister Scott Morrison canvassed an embassy move from Tel Aviv to Jerusalem.  The present most likely flashpoint is West Papua where Indonesian troops are fighting pro-independence guerillas.

Even well-warranted condemnation of human rights abuses in the poorly reported conflict could trigger the fury of radicals.  Claims that Australia wants to break up the Republic by repeating its ‘interference’ in the 1999 separation of the former East Timor are widely believed.

For a change religious issues may not be so volatile.  Indonesia – the world’s most populous Muslim country - has been remarkably quiet about the alleged Chinese persecution of Uyghurs and the Myanmar military’s oppression of the Rohingya.

It’s been reported that Indonesia’s Islamic organisations have turned off the rage after taking sponsored visits to Xinjiang where the Uyghur ‘reeducation camps’ are reported to be located. 

The slur was denied and a protest quickly organised outside the Chinese Embassy in Jakarta just after Christmas; only a thousand fronted.  The 2016 crowds baying for blasphemy charges against Jakarta Governor and ethnic Chinese Christian Basuki (Ahok) Tjahaja Purnama were 500 times larger.

The IA-CEPA also increases the quota on work and holiday visas eventually allowing entry for 5,000 Indonesians a year. Australian unions have objected yet these visas are unlimited for most European backpackers who labor on market gardens and farms.

President Widodo has been calling for foreign money and hopes the IA-CEPA will entice, though lenders are leery.  Australian government statistics show $5.6 billion invested next door, compared with $720 billion in the US and $480 billion in the UK.  

Widodo and his economic advisors want dollars, but nationalists fear relying on foreigners for loans and food security will impact sovereignty.

On the other side, investors know the rule of law is flexible and the state dispute settlement system is flawed.  All this, plus corruption, equals distrust.

Trade was flourishing long before European colonialists arrived in the region and started imposing rules. Makassan adventurers were regular visitors to the Kimberley coast, gathering shellfish and sea slugs for Chinese medicine.

They brought iron cookpots, metal tools, cloth, rice and exotic plants like tamarinds in their multi-hulled prau. Some returned to South Sulawesi with Aboriginal wives and artifacts. Where trade treads, friendships follow.

It’s another reason for pushing the IA-CEPA, though rarely mentioned by the spruikers.

First published in Pearls and Irritations, 13 January 2020 https://johnmenadue.com/duncan-graham-indonesian-free-trade-not-there-yet/

PEOPLE TO PEOPLE LINKS: ARE WE SERIOUS? ARE THEY?

Building mateship, not subs                                               Duncan Graham

Last century American Senator William Fulbright (right), who founded the exceptional international exchange programme that bears his name said:

In the long course of history, having people who understand your thought is much greater security than another submarine.

A few weeks ago academics William Maley and Bambang Nugroho  wrote in The Jakarta Post that the way back to normality was through leadership of ‘skilled professionals’.

This has been a common theme since Australia’s Ambassador Paul Grigson was recalled following the executions of drug smugglers Andrew Chan and Myuran Sukumaran. Don’t fret, the argument runs, now the Ambassador is back in his Jakarta fortress the diplomats will get the Indonesia-Australia relationship back on the road again provided, as Prime Minister Tony Abbott says, journalists don’t get in the way.

This is a seriously flawed assumption.

Diplomats follow the policies of politicians who take their cues from the public mood.  They can’t ‘lead’ anything.  I think they helped get us into this mess by misreading the character and philosophy of Indonesia’s new President, the uncompassionate Joko [Jokowi] Widodo.

The path forward won’t come from professionals in bombproof shelters but suburban folk seeing for themselves how their neighbors live, understanding their values and appreciating what’s really happening next door.

Five years ago former President Susilo Bambang Yudhoyono  (left) asked the Australian Parliament for a more constructive relationship, unaware our spies were eavesdropping his wife Ani’s phone.

His words were described as ‘forthright and touching’, ‘transformative and moving’. His appeal inspired; fresh schemes followed, old ones blossomed.  While officials pondered individuals took action.

Among them was Perth journalist and historian Dr Frank Palmos who has done more than a talkfest of cultural attaches to improve our image in Indonesia.  He’s achieved this by writing Sacred Territory, the definitive history of the Battle of Surabaya and then using his own money to have the book translated into Indonesian.

Around 5,000 copies should be released on 10 November, the 70th anniversary of that nation-defining event, and published by a major newspaper chain. 

Palmos’ determination to help our neighbours get to know their real history instead of the one constructed by the late President Soeharto has earned him enormous respect. Fortunately he’s not alone. 

In 2010 former Western Australian Trade Commissioner Ross Taylor gathered a group of like-minded volunteers to start the Indonesia Institute  offering an alternative tough-love voice to balance the constrained views of government.  It’s become the go-to source for informed comment outside officialdom.

Retired social worker and public servant Peter Johnston (right) initiated the Bamboo Micro Credit scheme in 2007  to offer interest-free loans to small entrepreneurs. It now lends millions of rupiah in three cities and is expanding as ordinary Australians donate small sums to fund the initiative.

There are many other examples – these are just ones I can vouch for personally.  Never underestimate the power of a determined individual.

However a clear-eyed look at the official schemes show they’ve been too few and small for any deep and lasting impact. 

Although the Joko Widodo administration seems to have sidelined SBY’s hopes, both nations need to engage beyond the professionals’ issues of aid, trade and barricade.  These are important, but they’re not the stuff of chats in the bus.

True friendship requires trust and the best way is through talking to people across the street, understanding their quirks and concerns, applauding  their achievements, empathising with their difficulties.

It’s true in my kampong and your suburb; it’s true in our world.

The Australia-Indonesia Bridge School Partnership  is a splendid project.  It started seven years ago and funding ends this year.  So far 112 schools have been involved along with more than 450 teachers.

Certainly not to be rubbished. But put this in perspective; there are about 32 million primary students in Indonesia attending 150,000 schools. Way to go.

The prestigious New Colombo Plan  is another fine idea, this year helping 60 of Australia’s smartest undergraduates learn in locations throughout the Asia Pacific Region. There are many other scholarships.

Top of the schemes has to be the Australian Consortium for In-Country Indonesian Studies driven by a small group of dedicated academics led by Murdoch University’s Professor David Hill. It’s been running for 20 years and has helped more than 1,600 undergraduates get to know their neighbours. 

More than 900,000 Australians are studying at Australian tertiary institutions.  Not all are interested in overseas cultural studies, or Indonesia. Let’s assume just one tenth of one per cent.  That’s 900 – and ACICIS is handling 80 a year.

There are eleven Indonesians for every Australian so there’s a limit to how much one country can do.  But on these figures Australia isn’t even coming within coo-ee of having meaningful contact on any scale.

Yet this worrying situation could be vastly and easily improved:  Not through spending big money - but by eliminating barriers.

Australia has agreements with 31 nations to offer visas allowing young people to wander and work in Australia for up to a year.  Many Australians will have met European and East Asian backpackers under this scheme and made lasting friendships.  All now have a better appreciation of each other’s cultures.

Such encounters are not surprising as last year almost 240,000 visas were issued. They’re commonly known as Working Holiday visas, - though the official term  is Working Holiday Maker; to further confuse there are two classes – Working Holiday class 417 and Work and Holiday class 462. 

This latter group includes Indonesia and caps the number at 1,000.  This visa requires applicants to have functional English, have completed two years undergraduate study and – these are the curly ones – AUD 5,000 [Rp 53 million] and ‘a letter of home government support’.

These restrictions do not apply to applicants from the Working Holiday class countries.

Last year only 436 Indonesians were successful. Anecdotally they find the financial and government approval fences too high to leap. The visa costs AUD 420 [Rp 4.4 million] and chest x rays aren’t on long weekend specials.

 So the applicants Australia needs and who would benefit most, the smart but poor, the incandescent visionaries with no friends in Jakarta’s high places or fathers in the army, these kids aren’t getting to see the country next door and the chance to erase myths and hang-ups.

The visa scheme is reciprocal, but unbalanced. Eighteen months ago a seminar co-sponsored by the government-supported Australia Indonesia Youth Association   heard that between 10 and 14 visas had been issued to young Australians, though many had applied.  It seems the kids are keen, but the bureaucrats are not.

The irony is that these walls, topped by broken glass, have been built by governments saying they want more people-to-people contacts.

Tourism is supposed to expand the mind with rich experiences helping the traveller better comprehend the world’s complexities.   To visit Australia Indonesians must answer 52 questions on a 17-page visa application paper form.

In June Indonesian sculptor Ono Gaf (left) spent time in Perth visiting galleries and fellow artists.

Australian friends raised money for his travel and other expenses.  The total was AUD 865.   The biggest expense was not the airline tickets but the visa. It cost AUD 408.

It would have been less if Ono hadn’t applied through an agent or had his first application rejected; his sponsor’s letter guaranteeing accommodation and ensuring he used his pre-paid return ticket was deemed insufficient security.

No appeal allowed.  No correspondence.   Your money has gone.  Start again.

Earlier he’d visited Singapore on a similar mission.  No visa required yet that nation state is just as paranoid about public safety - and has even experienced Indonesian terrorists bombing the city during first president Soekarno’s Konfrontasi venture. (left)

Had Ono been a citizen of Croatia, Slovenia, Lithuania or 33 other countries his visa would have been free.

Last year 150,000 Indonesians arrived as tourists. Double that number came from Malaysia, and even more from Singapore.  Citizens of both nations apply for visas on line and pay AUD 20 [Rp 210,000].

Our priorities are not advancing arm-in-arm, but buying arms. We are planning to spend at least AUD 36 billion on new submarines, maybe ready for 2030. If they are ever built they may protect us against enemies yet to be imagined – though it seems the government has read the Murdoch Press which has Indonesia not a friend but a potential threat -  ‘armed and dangerous’.

By comparison, next to nothing is being spent on improving relationships in the here and now.  Back to the words of the late Senator Fulbright and the submarines – the greatest security comes when we understand each other.

The business of creating that understanding isn’t just the task of ‘skilled professionals’, or governments.  It’s your job, it’s my job, it’s our job.

(This is an edited version of a paper presented at the Indonesia Council’s eighth open conference held at Geelong’s Deakin University in early July.  Australian author and journalist Duncan Graham lives in East Java. He’s been contributing to The Jakarta Post for the past decade.)    

This paper has also been published in New Mandala:

http://asiapacific.anu.edu.au/newmandala/2015/07/07/building-mateship-not-subs/

##    

ASIAN CENTURY COMING SOON - MAYBE

Australia discovers Asia – cautiously                  

Australian Prime Minister Julia Gillard’s Asian Century policy is full of warm words.  Here are some cold facts:

Australians are mainly big, white, brash, irreligious, pragmatic and well paid.  We live in a nation where powers are separated and the rule of law rules.

Indonesians are generally small, brown, restrained, religious, superstitious, exploited and poorly paid.  You live in a nascent democracy dominated by moneymen and the military. 

We’re eighth on Transparency International’s corruption perception index where being number one is pure. You rank at 100

Our background is as recent transplants, Judaeo Christian, British democratic and colonial. Our independence was granted amicably.

Your history is ancient with Hindu and Buddhist traditions, feudal, patriarchal and colonised.  Liberal Islam dominates.  Independence was bravely won only after four years of brutal fighting.

Our education and health services are free. Yours are supposed to be free.

You have to carry ID cards and follow an approved religion. We don’t, and won’t.

You celebrate community – we praise individualism.

One hundred Australian cents buys almost 10,000 rupiah. For every one of us there are 11 of you.

Our friends speak English and live far away in Europe and the US.

Your friends are – well, we don’t really know, but fear they’re in the Middle East.

We eat foods based on wheat and milk, and drink alcohol.  Often to excess.

Your diet is based on rice and water.  Moderation is a virtue.

We speak the international language.  You use a language unrelated to any European tongue and unknown elsewhere

We play rugby, Australian Rules and cricket on excellent facilities and we do all sport well. You play soccer badly and practise in the street.

You live in a sprawling archipelago with porous land borders where scores of ethnic groups still hold their ancient lands.  We occupy an island continent stolen from the original inhabitants.

Your home is the tropics, rich, fertile and well watered.  Ours is an arid land.

These and other factors have shaped our identity and made us different.

How can such two such radically different cultures intersect peacefully? 

Governments seem to think the way is through trade and aid.  So Australian taxpayers give around half a billion dollars a year to Indonesia. 

There’s no sign kampong folk know of this generosity, or if they did it would enhance their understanding.

We’ve been neighbors since Gondwanaland split. For much of that time we’ve viewed each other with suspicion laced with ignorance and travel warnings.

There was a moment when this wasn’t so.  In July 1946 Australians accompanying PM Sutan Sjahrir in Yogya were showered with petals and  shouts of ‘Australia, Australia!’ 

It was a hosanna moment when we backed Indonesian independence.  It could have led to a permanent bonding where Asian Century statements would have been as unnecessary as reproclaiming the Commonwealth of Australia.

Sadly, tragically, the baton was dropped and our arena shifted to Europe, our spiritual homeland.  The decades of distrust began.

Now we’ve heard that you’ve got money.  That means you must need foods and goods. It’s time to say hello, see what you want and how much you can pay.

Are these the foundations for a good and lasting relationship?

We want to join Asia but does Asia want us?  I haven’t heard anyone in Indonesia talking about the Australian Century.

All the ideas in the White Paper are good.  They are also too few and too limited.  Maybe too late.

One of the best is expanding a scheme to allow 1,000 young Indonesians to wander and work in Australia for a year. Previously the number was 100.

Generous? Do the maths: Indonesia has 240 million people. The median age is under 28.

Working Holiday Visas have been available for years for other, mainly European nationals, keen to go Down Under.  What better way to learn of another culture by getting dirt under the fingernails, make friends alongside workmates?

For Indonesians it’s the Work and Holiday Program.  The same?  Not quite.  For this deal applicants have to pass an English test, be tertiary graduates and approved by their own government.

The scheme is reciprocal but Indonesian bureaucrats have built barriers.  Australians are only allowed to teach English, work in hospitals and tourism.  There are reports of students giving up on the paperwork and going elsewhere.

Though jobs are not restricted in Australia, Immigration demands applicants have at least AUD $5,000 – 50 million rupiah.  Fees, insurance and air fares put visas even beyond the reach of the new Indonesian middle classes, defined as those who earn more than US $3,000 (29 million rupiah) a year. 

Are Australian leaders really serious about an Asian Century where curious and open-minded youngsters can poke around their neighbor’s culture to erase prejudices and load facts? 

If so Australia needs to cease discriminating against Indonesia.

And Indonesia needs to stop being fearful of its neighbor.  We’re not all Kuta bar slobs determined to fracture the Unitary State and steal jobs off becak drivers.

Just as you’re not all fundamentalists bombing your way to a Southern Hemisphere caliphate.

Australia’s Asian Century policy is a gentle shuffle forward.  The hype makes it sound like a Southeast Asian version of the open border European Community that’s helped dissolve ancient hatreds and foster unity through people-to-people contacts. 

It’s not. It should be.

 

(First published in The Jakarta Post 8 November 2012)