Trade, security ties and engaging the Indonesian diaspora – what you need to know about Widodo's Australia visit

Officials from both Canberra and Jakarta must have been privately relieved last night. The first official visit to Australia by Indonesian President Joko Widodo (“Jokowi”) had finally taken place, and gone off without a hitch.

Jokowi is nearly half way through his five year term of office, yet has only now made the relatively short journey to Australia. He was due to visit in November last year, but called it off at the last minute due to political unrest at home. This was of course related to blasphemy allegations against his former deputy as Jakarta’s governor, Basuki Tjahaja Purnama or “Ahok”.

Malcolm Turnbull, by contrast, visited Jakarta in November 2015, just two months after coming to office. This tends to reinforce the standard narrative: Indonesia is more important to us than we are to Indonesia.

Jokowi’s recent visit was a good deal shorter than the one planned for last year. It was shorter too than the visit by Israeli Prime Minister Benjamin Netanyahu that immediately preceded it.

Jokowi’s timetable also omitted several of the high-profile events planned for the earlier visit, including an address to Parliament. But the visit did highlight several important issues in the bilateral relationship.

Trade ties

One is the low level of trade and investment flows between the two countries. Currently two-way trade is worth around A$11.2 billion a year; neither country ranks within the other’s top ten trading partners.

Even if some of the more optimistic assessments of Indonesia’s economic prospects turn out to be exaggerated, there is little doubt the country’s economy will continue to grow at a considerably faster rate than Australia’s for the foreseeable future.

At a time when Australia has successfully negotiated free trade agreements (FTA) with many of its Asian neighbours, efforts to conclude a similar deal with Indonesia have lagged.

Negotiations for an Comprehensive Economic Partnership Agreement (CEPA) between the two countries started nearly a decade ago. They stalled in 2013, and were only re-started in March 2016. The current target for signing off on the Agreement is the end of this year.

Jokowi signalled his support for the agreement by focusing on it as a key point of discussion. His visit follows directly on from the sixth round of bilateral negotiations in Canberra, attended by a senior Indonesian delegation.

However, broader Indonesian political and community commitment to free trade principles is not as evident. The Indonesia-Australia Business Partnership Group noted in a 2016 report “there is a general cynicism towards FTAs, CEPAs and an open economy in Indonesia”.

Even Jokowi himself has not been averse to adopting measures that look more like economic nationalism than free trade.

Moreover, many of the real barriers to trade between the two countries, and to Australian investment in Indonesia, lie not so much in formal regulations as in informal practices. Opaque regulatory mechanisms, weak legal protection and corruption in Indonesia all hinder trade and investment.

Indonesia is making progress in many of these areas, but overall still ranks below the regional average in ease of doing business.

Security co-operation

A second issue highlighted for discussion was security, including counter-terrorism and the problems posed to each country by returning former ISIS fighters. It was agreed that full ties between the two militaries would be restored, after minor disruptions two months ago, in relation to training materials at an Australian base that were seen as insulting by Indonesia.

There was also speculation on the possibility of joint Australia-Indonesia patrols in the South China Sea. Both countries reportedly emphasised the importance of freedom of navigation in the South China Sea.

But no details on any joint patrols have yet been released, probably because the idea is still rather undefined. It was raised by Indonesia’s defence minister Ryamizard Ryacudu during the joint meeting of foreign and defence ministers in Bali in October 2016. Julie Bishop cautiously responded that Australia agreed:

to explore options to increase maritime cooperation and of course that would include coordinated activities in the South China Sea and the Sulu Sea.

When Jokowi was asked about the idea before leaving Jakarta, he was also cautious. Such patrols, he said, would be “very important” as long as they did not raise tensions in the region.

It is hard to imagine joint patrols in the South China Sea not raising tension with China – unless they were conducted wholly outside the waters claimed by China.

The patrols, of course, need not be naval. Vessels of the Australian Fisheries Management Authority and the Australian Border Force already conduct joint patrols with their Indonesian counterparts to counter illegal fishing in waters north of Australia.

Even so, Australia-Indonesia patrols – joint or coordinated, civil or military – in the South China Sea do not seem imminent.

Indonesian community

A third aspect of the visit has attracted little attention but is probably of considerable long-term significance to Jokowi. This was his meeting with members of the Indonesian community at Darling Harbour – fairly standard activity for visiting heads of government.

But such meetings have taken on significance for Indonesia in recent years as it develops the concept of what it calls the Indonesian diaspora, through the Indonesian Diaspora Network.

Jakarta asserts there are some eight million members of this diaspora globally, albeit using a generous interpretation of the term. Looking to other national diasporas – especially the Chinese and Indian – Jakarta is hoping Indonesia’s will contribute to the country’s development at home, and the promotion of Indonesia overseas.

This is one of Indonesia’s most visible second-track (unofficial) diplomacy initiatives. Its significance to Jakarta is indicated by the fact the founder of the network – and the chair of its advisory board – is Dino Patti Djalal. He is a former Indonesian ambassador to the United States.

Jokowi is looking to the diaspora in Australia to contribute to the network’s overall goals. As he put it

to return their knowledge and expertise back home, and contribute to the development of Indonesia.

In all, the visit was nothing particularly dramatic or surprising. It was just a friendly one – which is how Jakarta and Canberra want it.