ASIAN DISENGAGEMENT MASTER CLASS

How not to engage with Asia.

Every decade or so a Western Australian watcher from the cast-iron balconies of the State’s Parliament glances outwards.  Looking away from the Darling Range rippling in the heat rising from the Swan Coastal Plain, the beholder wonders: What lies North West?

Maybe adolescent markets hungry for the abundance of minerals and foods coming from the State’s hinterland?  Just seeing neighbours as consumers is a bit crass, so policies need to be packaged with ribbons labeled ‘relationships’ and ‘friendship’.  The latest is ‘engagement’.  Unwrapping reveals a mostly empty box.

In 1990 Education Minister Dr Geoff Gallop (later Labor Premier and now director of Sydney University’s Graduate School of Government) pushed the State towards Southeast Asia and Indonesia in particular.

After the government changed so did priorities. Liberal Premier Colin Barnett (2008 – 17) tossed aside suggestions of promoting Asian language studies.

'There are very few parts of the world where meetings aren't conducted in English and they are generally not with interpreters,' he told AAP when visiting Jakarta.

This was wrist-slashing news for Australian academics and educators campaigning to boost Indonesian in schools as enrolments had tumbled by a third following the 2002 Bali bombings.  They reckoned monolingualism threatens security, defence, trade and personal relationships.

Murdoch Uni Professor David Hill was commissioned to report by the Federal government; he stressed the ‘need to act decisively and urgently to rebuild Indonesian skills in Australia’. 

Barnett didn’t see needs.  No votes here.  But when Labor went to the polls in March 2017 it promised another try at sending cheerios towards the people next door who are not like us.  A policy to ‘engage’ would be devised.

In proper administrations details precede policies. Here it’s the reverse. Premier Mark McGowan’s pledge has become a case study in implementation stuff ups.  

It took almost 30 months to produce the 56-page Asian Engagement Strategy 2019-2030 Our Future with Asia, with acres of splendid pictures and dazzling charts.

The public launch at the end of August carried a price tag - $320; this is steep for a coffee and choc muffin even in Perth.  When a politician’s speech is the appetizer only the truly famished on corporate expense accounts would have bothered.

Indonesian Institute president Ross Taylor, a long-standing and vigorous advocate for closer personal and business ties, took the surprising step of warning members to stay away from the “exclusive and price-prohibitive function …The Strategy is a public document and should be made widely available, and not be held captive to those who can afford this price.”

Attendees were addressed by Peter Tinley.  In January he won the Asian Engagement portfolio off Bill Johnston whose claim to the job was based on some language skills garnered as an exchange student in Bandung, West Java.

Tinley, a former major in the SAS, spent time in Iraq but has no known connections with Asia.  He highlighted WA’s closeness to the expanding Asian markets and the State’s importance as a producer of minerals, grains, beef and other foods.

Such stale statements are distasteful to anyone who has ever read a map and a newspaper, which presumably includes corporates.  Curiously Tinley didn’t startle his audience by letting slip that Australia is in the Southern Hemisphere and not betwixt the UK and the US.  My God! Why hadn’t we been told before?

His speech was thinner on details than the serviettes, so we inquired.

 It took Tinley’s office three weeks to produce these Yes Minister jewels:  ‘The six priorities match global economic trends with the State’s unique strengths and resources, with an overall aim to strengthen and diversify the State economy, and create future-proofed jobs for Western Australians.’ Translation app couldn’t cope.

‘The Department of Jobs, Tourism, Science and Innovation has commenced work on the next phase of the Asian Engagement Strategy, which involves scheduling activities that deliver on the ‘Government actions’ outlined in the Strategy. An implementation plan is in development and will include annual analysis and reporting of progress and outcomes.

‘The Minister … has been undertaking work to activate businesses and communities around the actions of the Strategy.’  Translation:  Dithering in progress.

Next year marks the 30^th anniversary of a Sister State Agreement with the province of East Java, signed during the despotic regime of President Soeharto.  In the early days it started well with several exchange programmes.  

One of the most lasting was bringing Indonesians to visit dairy and potato farms resulting in the Republic importing pregnant Friesian heifers and seed spuds, significantly boosting yields.

Tinley’s office said ‘a number of projects to mark the 30th anniversary are under discussion including  cultural/arts exchange,  bilateral visits involving senior officials and a possible visit by East Java youth delegation.’  Translation: Head scratching continues.

Small positives from the strategy and in place are Access Asia Business Grants.  These should help small-to-medium size shows explore opportunities.  Grants to $10,000, but the pool has only $1.2 million available till June 2021.

Otherwise the ‘engagement’ lacks the essentials for moving into a successful marriage.   Determination on all sides to make it work, and commitment of ample resources.  Translation:  Political will. 

(Disclosure:  The author received two research grants from the Sister State Agreement in the 1990s.)

First published in Pearls & Irritations, 14 October 2019
https://johnmenadue.com/duncan-graham-how-not-to-engage-with-asia/

KIM CHANCE

SYNERGIES, SPUDS AND SHOWTIME
© Duncan Graham 2007

Kim Chance offered a blunt message to the Nervous Nellies of Australian business fearful of investing in Indonesia, the perceived land of terror:

"Go to Indonesia and learn that it is safe – or the competition will cut the ground out from under you," he said. "Of course there are sharks in Indonesian business – and crocodiles in Australian business. But they're a minority."

Western Australia's minister for agriculture and food has an unusual approach to the media; he's been a politician for 15 years and a minister for the past six so by now should have mastered the art of doublespeak.

Maybe he guards his words back in his home state where journalists think they have a mortgage on cynicism. But in Indonesia Chance was so upbeat about promoting trade that his edgy minders were constantly trying to insert qualifiers and disclaimers into his enthusiastic predictions.

As he rattled off a list of present and future possibilities – halal meat exports from Indonesia using cattle imported from Australia, Boer goats into Sumatra, Australian raw stock for steel mills, Indonesian laboratories providing tissue culture services, Indonesia manufacturing parabolic solar collectors, village bio-diesel plants using sunflower seeds, importing windmills to lift deep-well water - the bureaucrats blanched.

But however difficult the implementation of these plans, any public servant keen to stay on the payroll doesn't gainsay a minister setting out his vision – even when adding measurably to the workload.

"International relations tend to be over complicated," Chance said. "The rules are that we don't shoot at each other, that we try to make a bit of money, and we have fun.

"I'm here to talk trade but that's not the most important thing. This is about people, about developing good relationships and helping Australians understand more about Indonesia.

"We need to stop considering each other as separate countries. It's far more helpful to take a regional approach. We (in WA) have the raw commodities – you in Indonesia have the labor and the skills for value adding.

"What sort of opportunities? It's as broad as your imagination. Think of the synergies."

WA is a resource rich, export-dependent state. It produces huge quantities of food – mainly grains - and mines vast reserves of minerals, particularly iron, gold, nickel and bauxite that's used to make aluminum. (See sidebar)

Though it has a population of little more than two million, WA is currently riding an economic boom. There's a huge shortage of skilled labor. Wages are high ensuring that manufacturing can't compete against imports from low-cost workforce countries.

But in the nation next door to the north there's a surplus of labor, and according to Chance, a keenness to use local skills in innovative ways and develop new industries.

Later this year Indonesia will have the chance to showcase its products at the Perth Royal Show, WA's most prestigious annual event staged for a week in the big state's capital city. (Perth is just over three hours flying time from Denpasar.)

Past guest nations at the show have included China, Germany, Japan and Malaysia. East Java, which has a 17-year sister-state relationship with WA, has booked a third of the floor space at the Indonesian stand to push its goods and culture.

Chance was in Indonesia for five days in June to check progress with the Royal Show arrangements and help boost two-way trade.

Although he displays a teenager's enthusiasm for the business possibilities between the countries, he's no novice in international trade.

He's been to Indonesia before and several times to the Middle East ramping sales of cattle and farm produce, and checking end-use arrangements. Unlike many Australians, he seems unfazed by the current wave of Islamophobia sweeping the country Down Under.

"I'm learning Arabic," he said. "I'm very fond of Islamic culture. I like the Muslim approach to life. I really enjoy being in Indonesia."

In Batu (a hillltown outside Malang in central East Java famous for its floriculture and horticulture) Chance watched the signing of a memorandum of understanding. This was between a local company and Western Potatoes Ltd for the supply of seed potatoes.

Growers based at Nongkojajar on the uplands of the Bromo-Semeru massif have been importing spuds from other WA suppliers for the past decade, boosting yields by two to three times.

"WA is geographically isolated from the Eastern states of Australia (there's a desert in between) so we can maintain high standards of quarantine," said Chance.

"We don't suffer from potato blight which stops exports from countries like the Netherlands. Consumer demand for potatoes in Indonesia is phenomenal – it's growing at about 50 per cent a year.

"At the moment most of this is going into the snack food market. But in the future potatoes are likely to help provide food security for Indonesians as the margin between rice production and rice consumption narrows.

"In Australia we have expertise in agricultural science, stock genetics, veterinary medicine and animal nutrition. The trade in services follows trade in commodities."

The other rural boom product is milk. As Indonesian consumers move from powdered to long-life UHT (ultra-high temperature) processed milk, the demand for the liquid product is booming.

Many of the high-yield Friesian dairy cattle now being farmed in East Java originally came from WA.

"I'd like to see Indonesian investors getting involved in the Kimberley (north-western Australia) by buying the leasehold of cattle stations (ranches)," he said. "That helps lock in the supply of animals to Indonesia.

"There are no restrictions on Indonesian companies acquiring land. The Sultan of Brunei is already a major landholder."

(Sidebar)

BIG, GROWING BUT UNBALANCED

Indonesia is Australia's tenth largest export market. Apart from petroleum products the major goods are aluminum, live animals, wheat, sugar and cotton. There seems to be plenty of demand – sales of Australian merchandise to Indonesia jumped 22.6 per cent last year.

In return Indonesia sends Australia large quantities of gold, paper and wood, including furniture.

Investment is one-sided. According to the latest figures from the Australian Bureau of Statistics, Australia has AUD $2.6 billion (Rp 182 trillion) invested in Indonesia. But Indonesians have sunk just one fifth of this sum into business and property in their neighbor.

There are reckoned to be about 400 Australian companies in Indonesia with most operating out of Jakarta. There's some Australian investment in mining companies working in Kalimantan.

(First published in The Jakarta Post 18 June 07)
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