A report card: Dispelling numerous myths

Richard Smith, Outgoing Ambassador of Australia, Jakarta

The following is the author's farewell speech at the Australian Indonesian Business Council lunch on Oct. 7. The Ambassador cut has been recalled by Canberra to serve as secretary in the Ministry of Defense.

I often feel that in the modern world diplomacy is headed in the direction of "events management" -- in our case, as I've said elsewhere, we often seem like Harry M. Miller behind barbed-wire.

But high-level visits are very much the coinage of contemporary diplomacy. It used to be that ambassadors were well paid to represent their leaders and ministers. These days we're underpaid to arrange visits by them!

Certainly, we have had our share of such visits in the past two years. They have included two by our Prime Minister, Howard, and some 20 visits by Ministers of the Federal and State and Territory Governments, and two by official parliamentary delegations, as well as numerous visits by other parliamentarians, shadow ministers, heads of government agencies, and so on.

Symbols and signals matter in this trade, and communication matters in any sphere of life, and that's what a lot of this activity has been about. Establishing contact between counterpart Ministers, growing the understanding among Australian Ministers of what is happening in Indonesia, picking out areas where we may be able to contribute a bit over the longer term, reinforcing aspects of our assistance programs -- that's a lot of what we've been doing.

Looking at the balance sheet of visits over this period, I should acknowledge particularly the importance of President Wahid's visit to Australia in June 2001 in opening the way to more movement between the two governments. The President's visit was courageous in the context of Indonesian politics at the time, characteristically so. He did not survive for long thereafter, but the fact of an Indonesian President visiting -- the first for 27 years -- and the fact that he was so well received in Australia were very significant contributions to the future of the relationship.

Visits aside, with our Indonesian colleagues we have also put together over the past 21 months a number of structures designed to reconcile past differences or manage possible new ones. These have included the first tripartite meeting between Australia, Indonesia and East Timor, and also the first meeting of the South West Pacific Dialogue, which brought together ministers from Indonesia, East Timor, Australia, Papua New Guinea, New Zealand and the Philippines in Yogyakarta last weekend.

The asylum seekers issue did of course dominate part of the past 21 months, and a lot of work had to be done to get on top of it. The issue had been on my agenda from the outset, but it came to a head after the relative trickle of boats over the previous few years became more like a rush in August last year when some 1,400 people sought to reach Australia illegally via Indonesia and the number waiting in Indonesia for passage to Australia exceeded 3,000.

There was at one stage a belief in Indonesia that we were blaming Indonesia for this problem. Not so. We recognized that the problem arose for Indonesia because it lay between Australia and the countries of origin. But we did contend that the issue was not -- as some Indonesians saw it -- a problem just for Australia, and that it was in fact also a significant problem for Indonesia, whose borders and sovereignty were being treated with disdain by the people smugglers.

At all events, especially following the conference held in Bali in February this year, a wide range of measures has been put in place to curtail the trafficking of people in the region generally, and in particular through Indonesia to Australia.

I don't claim that the problem has been solved: there are still people smugglers operating, trying to get their unhappy cargoes of paying customers through to Australia. But undoubtedly, for both Indonesia and Australia, things are a lot better in this area than they were a year ago, and even two and three years ago.

In other areas of the relationship, we have made some progress too. The defense relationship was never turned off completely, even after East Timor, and we are now re-building it, quietly, step-by-step and in ways that serve practical interests on both sides, and are based on realistic expectations.

Two weeks ago we held another round of our regional security and disarmament talks. These were annual meetings until 1999, but they lapsed for a few years thereafter, and it is very timely now to have them back on the bilateral agenda.

Terrorism of course has become the big issue on all international agendas. In February this year we concluded with Indonesia an MOU on cooperation in the area of counter-terrorism. Both sides have benefited from it. Under the MOU, we will co-host with Indonesia later this year a regional conference on anti- money laundering and the funding of terrorism.

On the trade and business front, while the Indonesian economy has not prospered as we all would have liked over the past few years, I'm happy to report that our trade has grown. Two-way merchandise trade in 1999/2000 totaled A$5.1 billion; by 2001/2002, it had grown to $7.2 billion. Australia's exports to Indonesia grew by $785 million in that period, and Indonesia's exports to Australia by $1.3 billion. Indonesia, by the way, had a trade surplus with Australia of $816 million last year.

As to investment, the picture is a bit more mixed. There has been some new investment from Australia over the period. But there has also been some disinvestment, especially in the mining sector, for reasons that are well known but nonetheless regrettable. Broadly speaking, we have found established investors willing to consider new investment, but it has been difficult to attract new investors to Indonesia.

A regrettable feature of my own work over the past year has been the growing number of business disputes on which Australian companies, big and small, have sought our help. Sometimes we have been able to help, with access to Ministers and so on, and we are always pleased to be able to do that, but time and patience are always required.

The education sector remains one of the jewels in the crown of the Australia-Indonesia relationship. The absolute numbers have not grown much in the past two years, but Australia, with some 18,000 Indonesian students, retains its market share and remains the largest destination for Indonesians studying abroad.

The aid program remains robust and, at $121 million this year, is our second largest program after that with Papua New Guinea. Education remains a big part of it, as does health care, but the focus during my time here has been very much on building new activities in the area of governance -- legal reform, audit, debt management, tax reform decentralization and so on.

Looking after Australians, the consular role, is an important part of what the Embassy does. With 10,000 or more Australians living in Indonesia, and some 300,000 visiting every year.

Beyond this, and perhaps more importantly, we try to give our clients accurate guidance on the security environment as it might affect them. You might recall that we were pretty busy late last year in particular trying to keep you up to date -- especially after the Americans recommended the evacuation of dependents of families and we didn't.