“I believe[the relationship] is getting stronger,” Widodo said. “Australia is one of Indonesia’s main trade partners,the trade in 2022 reached $US13.3 billion[two-way trade was $18.35 billion in 2021-22],a 70 per cent increase compared to 2019. Investment in 2022 reached $US524 million,a 50 per cent increased compared to 2019. However,there is always room for improvement.”
Four years after the signing of a free trade agreement between Australia and Indonesia,economic ties have been on the rise. But despite Indonesia’s proximity and strategic importance,it was still only Australia’s 14th largest trading partner in 2021-22 and outside the top 20 as a destination for Australian foreign direct investment.
The Indonesian leader has signalledsimplifying travel for Indonesians to Australia,and expanding regional security co-operation,as priorities in the lead-up to his meeting with Albanese.
As he heads to Australia,Widodo,who is in his final full year in office after almost a decade in the presidency,said he would also like to persuade Australian superannuation funds,which hold a combined $3.5 trillion,to invest in Indonesia.
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Another subject on the agenda when he sits down with Albanese would be encouraging investment in Indonesia’s ambitious new capital project.
The president said there had been growing private sector interest inthe relocation of the capital from Jakarta to a sustainable,smart new city planned forEast Kalimantan province called Nusantara,reporting dozens of investors from Japan,South Korea and Singapore and domestically in Indonesia but none yet from Australia.
Despite suggestions the $51 billion megaproject could lose momentum under Indonesia’s next president,who will be chosen at an election in February and succeed Widodo in October 2024,he declared the switch of capital would definitely go ahead,assured by it being written into law in a bill passed last year by 93 per cent of members of the country’s House of Representatives.
“It will continue,” Widodo said. “The key is[support] from the private sector. If this big project[has] a good image,the private sector will come. If not,there is no investment in Nusantara. So,the first important thing is not who is the next president.”
The influential Indonesian Chamber of Commerce announced in February a memorandum of understanding with the government of Western Australia to explore opportunities to partner with critical minerals for electric vehicle batteries.
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This week’s visit is probably Widodo’s last to Australia as president for purely bilateral reasons,although it is expected he will be among the leaders in Melbourne next March for the ASEAN-Australia Special Summit,which will mark 50 years since Australia became the regional bloc’s first dialogue partner.
Albanese and his government have been eager to impress upon Indonesia and other neighbours their prioritisation of the region since unseating the Coalition in May 2022. He flew to Jakarta last year just two weeks after his election win and has visited Singapore and Vietnam since then while Foreign Affairs Minister Penny Wong has been to all 11 countries in South-East Asia except crisis-strewn Myanmar in the past year.
The government also appointed former Macquarie Group chief Nicholas Moore as a new special envoy for South-East Asia,charged with trying to deepen Australian economic engagement.
Widodo will fly to Papua New Guinea on Wednesday after his visit to Australia.
With Karuni Rompies
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