DUNCAN GRAHAM. A done deal – or a deal not yet done?

Sep 3, 2018

Trying to do business in Java on a Friday is seldom a good idea.

 The chantings that Prime Minister Scott Morrison heard mid-morning last Friday were not part of the standard welcome to overseas VIPs, but calling the faithful to prayer. That included Indonesian President Joko ‘Jokowi’ Widodo, much of his Cabinet and most senior bureaucrats.

 That Widodo took time to talk to his visitor on the Islamic holy day, when the Asian Games are concluding and campaigning about to start for next April’s presidential election, suggests he sees it’s important to maintain relationships with Australia, even if other politicians are indifferent or openly suspicious.

 For the week before Morrison took his first overseas trip as PM, the Australian media ran curtain-raisers claiming a free trade agreement, properly known as the Indonesia Australia Comprehensive Economic Partnership Agreement, or IA-CEPA, was in the bag after an eight-year chase.

Not yet. The document under the PM’s pen was not a ‘trade deal’ as predicted – that may come by year’s end.  It will also have to be ratified by the Indonesian Parliament Dewan Perwakilan Rakyat.

By then all will be engrossed in the upcoming election and in no mood to arouse the anger of protectionists led by Widodo’s rival, Prabowo Subianto, 67.

This will be the former general’s fourth tilt at the presidency and he’s campaigning – much like Donald Trump – on sovereign rights and keeping outsiders outside.

The official release said Widodo and Morrison had ‘successfully concluded negotiations’. A few tid-bits were tossed to the media, like the 500,000 tonnes of ‘feed grains’ getting tariff-free entry; but otherwise it was soft jargon rather than hard facts.

No surprise for those who read government announcements for a living, and only believe when they can hold the paper up to the light, check the adverbs and lab test the ink.

Indonesians understand this well. Last month Mohammad Mahfud Mahmodin (known as Mahfud MD), 61, was widely applauded as Widodo’s choice for a running mate.  The popular former judge was waiting in a hotel for the call only to see on TV news another picked just before the close of nominations.

Hustled to the front by advisors, and to the President’s obvious chagrin, was hardline cleric Ma’ruf Amin, 75, ignored by commentators because of his hostility to ‘liberalism’ and lack of political experience.

If Widodo 57, gets a second five-year term in office as expected, there are fears Amin will steer the nation away from its moderate Islam position, impacting business confidence.

There have been hints the IA-CEPA might include a relaxing of Indonesia’s opaque investor rules. Unless these are accompanied by a massive purge on corruption and rigid enforcement of the rule of law, few corporates will take the risk.

If and when a real pact is completed between the world’s fourth most heavily populated nation and its few-folks neighbour (the ratio is 11 to one), the show won’t start till 2020.

Morrison’s visit was no earth-shaker, rating only 360 words on page nine of Kompas, the  most prestigious and top-selling national daily. It reported the signing was just a ‘framework for cooperation between the two countries’.

A little pic of the two leaders wandering the Presidential Palace gardens in Bogor lifted the verbiage. Absent were fun shots like those of Malcolm Turnbull and Widodo in 2015 doing a blusukan (freestyle wanderings in a market), an event which did much to set up a somewhat suspect bromance story.

There was a bigger photo in the other mass-circulation broadsheet Jawa Pos though few words.  This exercise was always about selling our surpluses, with little interest in the Republic’s offerings,

Australians may eventually start seeing a few more consumer goods from next door, like textiles, kitchen equipment, perhaps even Japanese-brand cars built in Javanese factories.

Indonesia is also resource rich, exporting oil, coal, gas, gold, copper and other minerals in competition with Australia.  It produces little we don’t already get from China, Thailand  and Vietnam.

Australian universities may be allowed to open campuses in Indonesia if the DPR approves. This is one to watch as local staff who’ve bought their qualifications will fear skilled foreigners threatening their status and jobs.

The Indonesian equivalent of Australia’s energy debate is food security articulated as self-sufficiency. The goal will not be hastened by importing more primary produce from Australia.  Subianto’s isolationist supporters will likely make much hay while this sun shines.

What the Indonesian negotiators really want is access to jobs in Australia through an arrangement like the Seasonal Worker Programme now used by Timor Leste, Papua New Guinea and eight Pacific Island nations.

Workers stay for six months and must get a minimum hourly wage of AUD 18.29, double the daily rate for similar tasks in Indonesia.

According to the World Bank more than nine million Indonesians work abroad; that’s almost seven per cent of the national labour force, mainly employed in Singapore, Malaysia, Hong Kong, and the Middle East.

In 2016 they sent around USD 9 billion back to relatives in Indonesia.  Villages supplying overseas workers boast double-storey houses with cars in driveways.

Adding Australia would boost the economy and benefit short-staffed employers; Indonesian workers are keen and obliging – as all who’ve stayed in Bali hotels know well.

However Canberra, always fearful of a flood, and aware this could become an election issue, is unlikely to agree.  To appease it’s offering training programmes.

So: Some important signatures, but not yet a done deal.

(The full Widodo-Morrison statement here: https://dfat.gov.au/geo/indonesia/Pages/joint-declaration-comprehensive-strategic-partnership-between-the-commonwealth-of-australia-and-republic-of-indonesia.aspx )

Duncan Graham is a freelance Australian journalist living in Indonesia




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