Indonesian links strong

AUSTRALIA’S relationship with Indonesia is on a strong footing, despite the turmoil of recent years as South-East Asia’s most populous nation makes the transition to democracy.

That upbeat assessment came from Australian Ambassador to Indonesia David Ritchie, who was in Perth this week to address Western Australia’s business community at a WA Business News Meet the Ambassadors breakfast.

Mr Ritchie said the perception that Australia and Indonesia were at the depths of a rocky relationship were wrong and the result of media coverage that highlighted differences between the neighbouring countries.

He said Indonesians were generally warm to Australia and what it stood for.

The exception, he noted, was the military which was only just beginning to re-engage after its close ties with Australia’s defence forces unravelled in the wake of East Timor’s independence.

On the business front, Mr Ritchie acknowledged foreign investment was still difficult, though he said Australian firms had not fled Indonesia after Bali, as was commonly thought.

“There were 400 Australian companies in Indonesia at that time, and there are still 400 companies there now,” he said.

However, Mr Ritchie said the level of engagement had diminished to some extent as business waited for democratic reforms to eventually improve operating conditions.

The poor legal system, taxation regime and endemic corruption remain the biggest issues for business.

This was highlighted by Indonesia’s attempt to generate new interest by deeming 2003 as the year of reinvestment.

Instead, Mr Ritchie said, the country experienced net investment outflows.

However, he said opportunities remained in a nation that was much more stable and embracing of democracy than many in Australia would realise.

Key areas of interest are the food industry where Australian companies have much to gain from the needs of Indonesia, with its burgeoning middle classes driving demand.

Trade, already standing at about $6 billion including more than $1 billion in services was a significant way Australia could help Indonesia beat the growth in the numbers of people living in poverty.

Mr Ritchie said about 50,000 Indonesians now lived in Australia and many of those sought to export products to their native land.

He also dismissed concerns about immigration barriers to Indonesians visiting Australia, saying 90 per cent of applicants were successful, including 7,000 business visas granted last year, many within 24 hours.

Mr Ritchie said Indonesia was not seeking to get involved in negotiations between Australia and East Timor over the oil and gas reserves in the Timor Sea.