Australian council sees trade with RI falling

Australian council sees trade with RI falling

CANBERRA (Dow Jones): The Australia-Indonesia Business Council said Wednesday trade between the two nations likely will decline in the wake of the terror in East Timor since the pro- independence vote August 30, Philip Hawke, acting president of the council, said.

"The relationship between Australia and Indonesia has been destroyed and that will affect business," even though business relations haven't noticeably deteriorated, Hawke told Dow Jones Newswire.

"We would expect trade figures to decline," he said. "Our feeling at the moment anyway is that there is a very real reluctance amongst Australians to get involved in trade with Indonesia. We are seeing that in withdrawals from membership of our council and we are beginning to see people say, 'No I won't go there, if I'm going to go overseas I'll go to Thailand or Malaysia.'"

He cited an expected downturn in Australian cotton exports to Indonesia in particular.

Hawke also said in a statement that worsening relations with Indonesia aren't in Australia's interest and can't be allowed to continue.

Australia must redevelop relations with Indonesia and ensure trade restarts as well, following trade union work bans on vessels plying the Indonesian trade and on Garuda, the national airline.

Indonesia was Australia's 10th largest trading partner in 1998 with two-way trade of A$5.71 billion.

Australian exports totaled A$2.15 billion, with big-ticket items being cotton, wheat and mineral products.

Indonesian exports to Australia totaled A$3.56 billion in 1998, with major items being crude oil, gold for refining and re- export and jewelry.

Hawke said Indonesian exports to Australia jumped in 1998, partly reflecting the influence of a weak rupiah and the export drive associated with the economic downturn. In 1996 these exports totaled A$1.71 billion.

The Australia-Indonesia Business Council, which has 500 members, also supported a statement Sept. 17 from its Indonesian counterpart that some negative reactions in Indonesia to Australia aren't representative.

The council said, "The actions of the current Indonesian government and the atrocities committed by the pro-integration Indonesian militias in East Timor aren't condoned by the vast majority of Indonesian people."