16 August 2018




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May I begin by acknowledging that we are meeting today on the lands of the Ngunnawal and Ngambri peoples and paying our respects to their Elders past and present.

(Acknowledgements omitted)

I would like to pause for a moment to recognise the tragic loss of life from the recent and devastating earthquakes in Lombok and to express both our condolences and our solidarity. Labor fully supports the Australian Government’s offer to assist Indonesia as it recovers and rebuilds. In times of tragedy and disaster, we must work together.

It is not often that I have the opportunity to launch a book of essays on a subject that matters quite as much as our relationship with Indonesia. This is why Indonesia was the first country I visited as Shadow Foreign Minister.

In doing so I reflected a longstanding priority of Australia’s senior leaders. However, in any discussion of our relationship with Indonesia, we must recognise the imbalance in the relative importance to each nation of the bilateral relationship. Ultimately, in part for reasons of size and geography, Indonesia matters more to Australia than we do to Indonesia.

As Endy Bayuni reminds us, Paul Keating’s statement, which has been much repeated by Australian leaders, that “no country is more important to Australia than Indonesia” has yet to be reciprocated.

This insight is not a reason for disappointment or dismay. Rather, this insight should motivate both urgency and pragmatism amongst Australian policy makers.

Indonesia is on the move. The members of the United Nations have recognised its growing importance in Asia by electing it to the UN Security Council for 2019-20. But more than that, Indonesia is forecast by PwC to become the fourth largest global economy in PPP terms by 2050.

This edition of Australian Foreign Affairs recognises the significance of that change for Australia. Here we have four quite different approaches to the topic. The strength of this collection is its unvarnished approach to this enduring and important relationship.

Taken together, these essays offer a clear-eyed dissection of the Australia-Indonesia relationship that is neither sentimental nor especially optimistic.

They depict a relationship where the more formal government-to-government links are insufficiently supported by the deeper cultural or economic relationships between neighbours that do matter.

While there are some instances of particular touchpoints in the relationship, the lack of depth portrayed by these essays is not so very surprising.

The Australia-Indonesia relationship is in some ways emblematic of the kinds of relationship we can risk falling back to with many of our Asian neighbours – careful formality without the energising effect of a deep knowledge of the other achieved through extensive people-to-people interaction or economic and cultural engagement.

So I thought that I would frame my remarks this evening around a more consequential risk in the traditional way that we have conducted our Asian diplomacy – continuing to look past each other rather than talking to each other.

Changing this approach converts risk into opportunity, which is perhaps the fundamental point made by these four essays.

A more substantive engagement with Asia has been a major policy goal of Labor governments since the end of WW2. It was to the credit of the Chifley government that Australia was one of the early players in helping Indonesia secure a negotiated independence from The Netherlands. That history is largely forgotten in Australia, and virtually unknown in Indonesia.

Labor, under Whitlam, Hawke, Keating, Rudd and Gillard continued to push for closer and deeper links with Asia.

Most recently, Prime Minister Julia Gillard, of course, commissioned the Australia in the Asian Century white paper – a document that outlined an imaginative and expansive approach to broadening Australia’s cultural, economic, political and social links with Asia.

As part of the Cabinet sub-committee that finalised the white paper, I was keenly interested in ensuring that the white paper adopted a confident, constructive and comprehensive approach to our future relations with Asia.

It is worth recalling what Prime Minister Gillard said in the preface to the White Paper.

In this century, the region in which we live will become home to most of the world’s middle class. Our region will be the world’s largest producer of goods and services and the largest consumer of them.

History teaches us that as economic weight shifts, so does strategic weight.

Thriving in the Asian century therefore requires our nation to have a clear plan to seize the economic opportunities that will flow and manage the strategic challenges that will arise.

It is farcical that the policy recommendations of the Australia in the Asian Century White Paper were not only ignored but deliberately expunged from our national debate. Such petty partisanship comes at Australia’s cost. It is not a practice that Labor would adopt in government, nor an approach that I would take as Foreign Minister. It is in this spirit that we have signalled our support for the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), currently under negotiation.

Agreements of this kind serve to put additional muscle on the bones of the bilateral relationship, as did the 2006 Lombok Treaty, which Labor also supported.

The Australia in the Asian Century White Paper identified five key themes that will continue to underpin the FutureAsia policy of a Shorten Labor government.

  • First, we need to build on our strengths: we need to reinforce the foundations of our fair society and our prosperous, open and resilient economy at home.
  • Second, as a nation we must do even more to develop the capabilities that will help Australia succeed – investment in our people through skills and education.
  • Third, building partnerships is essential: Australia’s commercial success in the region requires that innovative and competitive Australian enterprises develop collaborative relationships with others in the region.
  • Fourth, along with partnerships, we need to build trust.
  • Finally, government cannot do it alone: we need to strengthen Australia’s deep and broad relationships across the region at every level. Besides government, business and civil society groups also play an important role.

These themes are premised on a coordinated and integrated national approach to building our future in Asia. This means that we need our private sector to be fully engaged in creating the economic and institutional collaboration that is essential to realising our economic opportunities. And to achieve this, it is critical that both the public sector and private sector invest in the requisite language and cultural skills.

It was this thinking that formed the backdrop to Labor’s FutureAsia policy that we announced last year. As Chris Bowen said at the time, FutureAsia is a whole of government framework that will underpin our efforts to deepen and broaden our engagement.

To date, we have detailed five initiatives to achieve a step-change in our engagement with Asia.

First, we are going to improve our performance on Asian languages, both in our schools and our boardrooms. You would all be aware of our chronic underperformance in the learning of Asian languages in our schools. To take Bahasa Indonesia as an example: the study of Bahasa Indonesia in Australia reached a high-water mark in 1972, and has been falling ever since. That is getting on for half a century of decline and neglect.

A Shorten Labor government will address this in several ways. For a start, we are going to take on the task of turning around our poor record on Asian languages as a national effort, cooperating with the States and Territories through our role in the COAG.

We are also going to restore the core $1.5 million funding to the Asia Education Foundation, a Keating government initiative that was scrapped in the Coalition’s 2015 Budget.

And finally, we will tackle the widespread ignorance of Asia at the Boardroom level – identified so clearly in last year’s AsiaLink/PWC report.

We intend to allocate $3 million to work with the Australian Institute of Company Directors on a pilot program to mentor Asia-capable potential board directors as candidates for boards wanting higher levels of Asia experience.

The ethnic complexion of Australia is changing as more people settle here from many different parts of Asia. Yet our boardrooms remain “male, pale and stale”, to quote the Sydney University Business School’s report last month.

We seem to be defiantly incapable of realising the value of our Asian diaspora, domestically or internationally. While some 17 percent of Australia’s population claims Asian origins – that’s over four million people – we don’t know how to draw on this as a national asset.

So our second major initiative is to empower the Asian diaspora in Australia and the Australian diaspora in Asia including by resourcing more formal mechanisms for consultation and engagement. This will apply equally to our Australian diaspora in Asia – Australians who are deeply connected with their communities in Asia.

Our third initiative – and this pertains particularly to Indonesia – will be to extend and strengthen our two-plus-two Ministerial dialogues. Since 2010, we have conducted annual leaders’ meetings, and since 2012 we have had an annual Defence and Foreign Ministers’ dialogue. Chris Bowen and Jason Clare will be proposing to their Indonesian treasury and trade counterparts an annual dialogue on trade and investment, from time to time bringing our Education Ministers into the mix as well.

Our fourth initiative is the further strengthening of the G20 as a key international economic clearing house. With India and Indonesia frozen out, the G8 lacks effect and impact as an economic decision-making body in Asia. Australia and Indonesia are well positioned to work to ensure that the G20 agenda and workload stays relevant to our region.

As Chris Bowen has suggested, it makes real sense for the finance ministers of the Asia-Pacific to meet either in person or virtually in advance of each G20 Finance Ministers’ meeting. In this, our engagement through APEC and ASEAN will remain vital.

This leads to our fifth initiative – the establishment of an ASEAN Studies Centre. To this end, under our FutureAsia policy, a Shorten Labor government will be inviting tenders for joint ventures between an Australian university or universities and one or more Southeast Asian partners. We need to build and sustain these essential avenues of understanding.

In this time of disruption, Labor also recognises the need for Australia to have a more effective and capable diplomatic infrastructure.

Australia’s diplomatic effort is under-resourced for a country of our economic weight and middle power status. As the Lowy Institute’s 2017 Global Diplomacy Index has pointed out, we rank 28th out of 60 countries in terms of the size of our diplomatic network. Not only are we smaller than Canada, India, Japan and South Korea, but we are also out-represented by countries like Belgium, Poland, South Africa and Turkey.

While new posts have been established in places like Kolkata, Bougainville, Phuket, Makassar, Surabaya and Ulaanbaatar we need to do better and invest more in our diplomatic efforts to align outcomes with our national interests.

No one in this room needs to be reminded of how light our footprint still is in Asia. Our embassies and high commissions in the capitals work hard to effect as wide a representation as they can, as do our smaller posts in regional centres.

Yet they are limited in the number of staff available and the large distances that need to be covered. Notwithstanding Indonesia’s rapid rate of change, we remain unrepresented in Kalimantan and Sumatra, for instance.

Consequently, Labor is currently considering the establishment of new posts in the Indo-Pacific region, substantiating our FutureAsia commitment to greater engagement through a more visible presence. Given the growing importance of Australia’s relationship with Indonesia, a new post here would be a priority.

I have said elsewhere that the divergence of economic and military power as principal tools of strategic influence is central to the disruption that distinguishes contemporary geo-politics.

The government’s Foreign Policy White Paper rightly highlighted the growing geo-economic competition in our region, evidenced particularly by the way that trade, investment and infrastructure development are used as instruments of strategic influence.

Those of you who might have been following proceedings at Senate Estimates in May will recall the conversation that took place around geo-economic power in Asia and Australia’s ability to come to terms with it and manage its consequences. As DFAT acknowledged, we demonstrably need new capabilities and additional resources to address this key development.

We are also contemplating the establishment of a new category of geo-economic counsellor across our diplomatic network. We would see cities such as Bangkok, Beijing, Hanoi, Jakarta, New Delhi, Tokyo and Washington as important initial locations.

These new positions would focus on how geo-economic power manifests itself in the countries identified, on how geo-economic power is used by or in those countries, and on how to develop opportunities for Australian engagement. These would be additional to the existing economic counsellor and Austrade positions across our network.

These geo-economic positions would play a key role in identifying improved ways of connecting and leveraging Australian private sector and civil society activities in the interests of broader foreign policy objectives.

They would also help to ensure our development, trade and diplomatic policies are integrated and that our development assistance programs across the region are visible to and coordinated with the various Australian enterprises operating there. They’d need to be supported by more capacity and capability in the new Indo-Pacific Strategy and Geo-economics team in DFAT Canberra.

If we are to re-invigorate our place in Asia, national coordination and integration of the kind that Labor’s FutureAsia policy envisages is essential. We must ensure that Australia is better placed to shape and benefit from the economic and strategic shifts taking place in our region.

With our FutureAsia program providing the frame for my remarks this evening, allow me to return to the task at hand – launching this collection of essays.

As I said, taken together, the four essays paint a rather gloomy picture of opportunities lost, gains squandered and looming challenges that will prove difficult to manage. They diagnose the symptoms that make the Australia-Indonesia relationship problematic, but are guarded in suggesting policy remedies. Perhaps the underlying difficulty lies in the title – Australia and Indonesia: Can We Be Friends?

Friendship is always a worthwhile objective so long as it accepts that friends may disagree from time to time. But what really matters is how we secure our interests and in the process generate convergence between our national interests and those of our neighbours. That not only establishes friendship: more importantly, it creates partnership.

In his essay, Hugh White touches on this perplexing question, but deftly avoids answering the question ‘how do we achieve this convergence?’ He identifies the strategic end-state with his characteristic precision: “a strong Indonesia determined to maximise its independence from China, and from India, could make it much easier for Australia to maintain our freedom of manoeuvre”. Absolutely. But the question remains: does Indonesia want this, and if so, how can we work with Indonesia to achieve it?

Jennifer Rayner’s enthusiasm for Indonesia’s complexity, energy, optimism, potential and vibrancy is infectious. But she, too, ends her essay in the interrogative mood – a set of critical questions that, even more critically, need answers.

Just as Australia looks past Indonesia, so Indonesia looks past Australia. Endy Bayuni also addresses the friendship question with the telling observation “tak kenal tak sayang” – if you don’t know someone you can’t love them.

Bayuni tends towards a more hopeful future as Indonesia becomes more prosperous and as Australia becomes more multi-racial. But he reminds us that the core problem is twofold: without trust there can be no friendship; and while economic ties remain so thin there can be no strategic partnership.

But Endy Bayuni’s moderate optimism is more than deflected by Tim Lindsay’s rather dark view of Indonesia’s future as a democracy. As he puts it, “It is a grim paradox that the voices of openness and tolerance which sought to present Indonesia as a paragon of Muslim democracy now find themselves facing opposition from champions of Muslim intolerance empowered by that same democracy”.

The overwhelming conclusion of this volume of essays is that there is work to do on both sides of the Arafura and Timor Seas. But precisely what that work is remains unclear.

It is in Australia’s interests that those with such deep understanding of this critical relationship are willing to risk articulating policy options and ideas to government. So I would encourage them to do so.

We all need to address the three core policy questions. What do we want out of the relationship? What does Indonesia want? And how do we go about getting the outcome we both want?

Indonesia’s ascension to the UN Security Council suggests that Indonesia is prepared to step up to an enhanced leadership role. Indonesia has long invested in an effective UNCLOS regime as both advocate and architect, and President Widodo’s insistence in his inaugural address that Indonesia reinvent itself as a maritime power suggests that it remains invested in maintaining a settled rules-based order in the region.

Indonesia is also keen to ensure that the geo-economic changes currently underway work to its benefit. And, as a founder of the Non-Aligned Movement, it is instinctively resistant to any form of regional hegemony.

Indonesia is also highly focused on practical international policy issues such as mitigating the effects of climate change, and adapting to them – a priority for a future Labor government.

There are many other practical areas where Australia and Indonesia can evidently work together to mutual advantage, whether in improving the nutrition of its growing population, building a better physical and social infrastructure (including improved health outcomes in the more remote parts of Indonesia), and providing the skills that its youthful population will need to participate in the region’s growing prosperity.

Labor’s FutureAsia policy provides a framework that affords both context and direction in building a more effective, dynamic and durable relationship with Indonesia – a relationship that advances the interests of both Australia and Indonesia and builds the trust necessary to achieve that end.

And it is in the context of trust that I make a point about the domestic political events of this week.

Endy Bayuni observes that “the prevailing view among Indonesians today has barely changed from the period when Australia had the White Australia Policy in place”.

This phrase brought to my mind two events: one a conversation with my father during the period of the first iteration of Pauline Hanson when he asked me if I wanted to return to live and work in Malaysia.

The other was when as Australia’s Climate minister; I co-chaired the key negotiating group in the international climate negotiations in Bali which involved direct discussions with then President SBY and advisors. In both those fora, that a Malaysian born Chinese was representing Australia was noted precisely because it upended historical stereotypes.

I tell these anecdotes as a reminder that the articulation of Australian identity and Australian values matters to our region. It matters to our relationships and it matters to our influence.

I hope that those who have been willing to toy with the race card in recent times might contemplate not only the damage to national cohesion and the erosion of national identity but also the diminution of our national power.

We are a confident, independent multicultural nation. This is one of our greatest strengths. But it requires both the protection and affirmation of our leaders.

As Jonathan Pearlman reminds us in his introduction to this volume of essays, Australia and Indonesia need to change our mutual perceptions.

These essays tell us why. Our FutureAsia policy provides a strategy for how we might do this. But more needs to be done. At the very least, we need to strengthen our perception, as well as our self-perception, as an inclusive and multi-cultural society.

With that, I declare these essays well and truly launched.

Authorised by Noah Carroll, ALP, Canberra.