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[ACKNOWLEDGEMENTS OMITTED]
In 2007 – less than a month after I became Prime Minister – Indonesia was the destination of my first overseas visit.
Today, in 2013, I am pleased to return here once again in my capacity as Prime Minister and to meet again with my counterpart, and good friend, President Yudhoyono.
In these five-and-a-half years, I have been to Indonesia ten times.
This is a beautiful country.
Thérèse and I love this country and its people.
And it is good to be back again.
During this period, I have seen Australia’s bilateral relationship with Indonesia become a keystone of our foreign policy.
Today, Australia and Indonesia are much more than near neighbours.
We are close partners.
We are strategic partners.
We are strong, proud democracies.
We sit at the same diplomatic tables around the world – the G20, APEC, the East Asia Summit.
Both our countries are living through a time of truly historic change.
200 years ago, China and India were the world’s largest economies.
But in the two centuries since, the defining feature of the world economy has been the gap between the industrialised West and the developing East.
A gap that has meant a vast difference in opportunity and prosperity.
Samuel Huntington called the separation of these two economic hemispheres ‘the Great Divergence’.
Today, we are living through the ‘Great Convergence’.
The mature economies of the United States, Europe and Japan continue to grapple with the aftermath of the Global Financial Crisis.
Meanwhile the Asia Pacific region, our region, is undergoing an economic transformation of a scale and speed that dwarf those witnessed during the Industrial Revolution.
When I first became Prime Minister in 2007, the previous six years had seen a million people in Asia lifted out of poverty every week.
Across our Asian hemisphere, income per person doubled within a decade.
After the Industrial Revolution, it took the United Kingdom 50 years to achieve that doubling.
Urbanisation is transforming Asia.
By 2050 the world population is expected to grow by 2.3 billion.
That entire increase will be absorbed by cities.
Asian cities alone will house an extra 1.4 billion people.
The pace and power of these changes can be clearly seen here in Indonesia.
Today, as the global economic centre of gravity shifts to Asia, Indonesia is poised to take its place as one of the world’s largest economies.
A trillion dollar economy in the next few years.
Number seven in the world by 2030, number four by 2050.
A rise as rapid as it is impressive.
Australian businesses in particular should take note of this.
Everywhere we turn, there are remarkable statistics.
Today Indonesia has more billionaires than Japan – and more per capita than India or China.
In Jakarta, the minimum wage rose by 44 per cent this year alone.
This economic change is driving a massive social transformation.
Not just freeing people from poverty.
But giving them a standard of living that would have been unimaginable a generation ago.
Today Indonesia is home to a young population looking to engage with the world.
50 per cent of the Indonesian population is under 30.
Indonesia is the world’s third largest market for Facebook and Jakarta is the most active Twitter City in the world.
I’m hoping to add a few friends and pick up a few followers while I’m here.
The potential ‘demographic dividend’ of this generation of young, tech-savvy, global citizens is truly stunning.
Already, Indonesia’s ‘consuming class’ is larger than Australia’s population.
By 2030, the Indonesian middle class will be 135 million strong.
Their purchasing power will drive an unprecedented expansion in demand for goods and services.
Indonesia should become a vast marketplace for Australian goods, services and industry.
A marketplace where a surging middle class will create a demand for new goods and services to suit their changing tastes, lifestyle and household income.
In this time of change and opportunity, you will be the ones who will make the Australia-Indonesia business relationship flourish.
Beef cattle is just one area where we can build a genuine business partnership.
By 2015 Indonesian beef consumption of 530 000 tonnes will exceed domestic production.
Together, we can do more than simply satisfy rising domestic demand and ensure a steady supply of beef for Indonesia, we can build a value chain to satisfy the markets of the world.
Consider our complementary strengths.
Indonesia is already a world leader in fattening and finishing cattle, with some of the very best intensive feedlots.
And Australia’s extensive grazing lands and tradition of pastoral excellence, allow us to breed high-quality beef cattle at a competitive price.
Realising our collective potential will require shared vision and concerted effort.
It begins with a relaxation of supply constraints for the Indonesian beef market.
This alone could provide the necessary kickstart for further investment and cooperation.
In the services sector there are exciting new markets to be developed.
The financial services sector is an important sub-set.
The opportunities that exist in financial services are ones that can deliver greater financial security to those millions of Indonesians who currently live outside the formal financial system.
An estimated 58 per cent of adult Indonesians do not have a bank account.
A very much smaller percentage are insured – some estimates suggest as low as 14 per cent.
How, in such a scenario, can individuals or households save, borrow, build up a credit history, invest, or even properly manage risk?
This is an expanding area of demand for Australian expertise, that also delivers a beneficial outcome for Indonesia.
In education, there are already 100,000 Indonesians with degrees from Australian Universities.
And today, around a quarter of Indonesian international students choose to study in Australia.
As you have experienced, often the connections made in an educational exchange provide the foundation for a future business relationship.
Just as the growing number of research partnerships between Australia’s CSIRO and Indonesia’s BPPT (Agency for the Assessment and Application of Technology) provide a pathway to future innovation and cooperation.
But for all the success, there is still a world of untapped potential that awaits.
You know the figures.
In 2011-2012, all the two-way trade between our countries only added up to $14.9 billion dollars.
In two-way investment, Indonesia remains outside of Australia’s top ten partners.
We do not need to look far to find opportunities to do better.
Infrastructure is just one example of a mutually beneficial area for investment.
With global growth forecast at 3¼ per cent, still below the pre-GFC trend of around 5 per cent, the G20’s key priority is to rebuild consumer confidence and re-energise private spending.
Some of this can be achieved through infrastructure projects.
For example, Indonesia has positioned infrastructure as a central topic for APEC this year.
The G20 is also working on infrastructure to bolster global economic growth and Australia will be giving this issue high priority.
In the next two years of the G20, I am confident we can work together to strengthen the focus and outcomes on infrastructure.
Infrastructure investment is a case study that reveals just how much stronger our trade and investment relationship can be – provided we have the right plan and process.
With this in mind, it is my pleasure to launch Towards 2025 – Australia’s Indonesia Country Strategy.
A document that outlines the broad pathway to the stronger trade and investment relationship we can have.
This country strategy advances the objective from the Australia in the Asian Century White Paper to build stronger and more comprehensive relationships with countries across the region.
It outlines a vision of where our relationship with Indonesia should be in 2025 and how we intend to get there.
Governments in both countries must commit to securing market access, lowering trade and investment barriers, and establishing regulatory certainty.
Just as importantly, business groups like you need to form a common view about opportunities in Indonesia and Australia – and work together to spread the good word.
Delegation visits and high-level investor-matching and support all add to the experience of a business transaction and greatly increase the likelihood of return custom.
That’s why I commit that, if re-elected as Prime Minister of Australia in federal elections this year, I will lead a high level business delegation from Australia’s top businesses to Indonesia by the end of 2013.
This will be the next big step in bringing our Country Strategy to reality.
I want Australia’s best and brightest business minds engaging directly with their counterparts and making sure we fully unlock the potential of what is on offer.
Above all, to succeed we must do more than remove impediments – we must create partnerships.
Formal agreements like the Indonesia-Australia Comprehensive Economic Partnership Agreement now under negotiation and advocacy organisations like the Indonesia-Australia Business Partnership Group have an important role to play.
But also partnerships created through everyday business.
Like the joint venture between Australia’s single largest exporter of wheat to Indonesia, Western Australia’s CBH Group, and the PT Eastern Pearl Flour Mill in Makassar.
The fourth largest single-site flour mill in the world, with a processing capacity of 840,000 tonnes of flour a year.
This is a partnership that’s helping to meet Indonesia’s food needs and creating local jobs and investment, while helping Australian wheat growers supply a crucial value chain.
For a nation like Indonesia, with its youthful profile, and with the ASEAN single market just around the corner, the challenge is to quickly deepen the pool of highly skilled workers.
Australia is already lending a hand with this human capital development, through our educational partnerships, our scholarship programs and the focus of our development work.
On cattle stations across northern Australia, Indonesian animal husbandry students are getting intensive industry training in a program developed by the world’s best – the Northern Territory Cattlemen’s Association.
The Australian Vocational Education Training Program, where directors from up to 20 Indonesian polytechnic institutes travel to Australian TAFE colleges, is another great example of a growing trend in the intercultural exchange of skills.
The Australian government is dedicated to enhancing these educational connections.
This year we will provide financial support to more than 400 Australians to study in Indonesia under our AsiaBound program.
Today I am also pleased to announce that the Government will provide $10 million to fund Australia’s Lowy Institute’s Engaging Asia Project.
This program will support new research, dialogues and partnerships in the region and strengthen the Institute’s focus on Asia – particularly Indonesia.
And I acknowledge the Honourable James Spigelman AC, Chair of the Australian Broadcasting Corporation, who is present here today from the Lowy Board of Directors.
In the same spirit, our Embassy here in Jakarta will be hosting OzFest Indonesia from January to April 2014.
A program of events that will showcase the best of Australian performing and visual arts, our great national passion for sport, and our world-class science, education and innovation sectors.
This is all part of the larger project of bridging the perception gap between us: as communities we should know each other better.
A much bigger event on our immediate horizon is the APEC summit that Indonesia will host in October this year in Bali.
Indonesia and Australia were both present at the creation of APEC in 1989.
Our business communities are both active in the work program of the APEC Business Advisory Council.
We are also both key players in the G20, which Australia is looking forward to hosting next year in Brisbane.
These forums are critical to global economic prosperity, and we need to build strategic continuity between the APEC and G20 agendas.
As a member of the G20 troika, Australia is also talking with ASEAN member nations on these goals, in particular with Indonesia, as the largest economy of ASEAN, and a G20 member.
Next year marks the 40th year of ASEAN-Australian relations, and today I announce that the Australian Government has nominated Simon Merrifield as Australia’s first resident ambassador to ASEAN.
Australia has long been a believer in the constructive and cooperative power of multilateral forums.
I propose greater engagement still in the lead-up to Australia’s hosting of the G20.
One thing I would like to see is greater engagement with communities of interest that sit outside the formal G20 structure: civil society, business, think tanks, labour, young people.
There’s already a considerable volume of good work occurring outside the formal G20 structures, through associated fora such as Business 20, Think 20, the Y20 and Civil 20.
But if you take Business 20 as an example, it is still dominated by business groups from the advanced economies.
And while those voices need to be heard and have great value to add, so too for the voices of those from the emerging economies, particularly the emerging economies of Asia.
I know that the Australian B20 leadership team preparing for our host year in 2014, led by Wesfarmers CEO Richard Goyder, shares my belief and will be encouraging those new voices.
As close as Australia and Indonesia are diplomatically– the real barometer of our relationship will always be people-to-people links.
No-one understands this better than you, the people who have done so much for Indonesian and Australian business connections.
You are the first wave of our mature and modern trade relationship.
And part of your role as stewards of this relationship is to help shape the next wave.
It is great that so many crucial players can be here today.
Leaders from groups like Kadin and the Indonesian-Australian Business Council which have led the way in strengthening the trade and commercial ties between our countries.
And all of you who have been generous with your ideas as we continue to develop the Indonesia-Australia Comprehensive Economic Partnership Agreement.
Your passion and vision for the Indonesia-Australia relationship goes back a long way.
With an audience like this, I do not need to spruik the importance of engagement between Australia and the rest of Asia.
You live and breathe these things.
But I do want to assure you that I share your passion.
I leave you today with an Indonesian saying, ‘tak kenal maka tak sayang’.
If we do not know each other, we would not care for each other.
Today, Australia and Indonesia know and care for each other better than at any time in our history.
And I look forward to working with you to build a new era in this relationship.