Friday, 28 July 2017 | 17:43 WIB

Indonesia Remains Favorite Destination for Australian Investment

Indonesia remains one of the fifth most favored place for investment by Australia, according to a survey by Austrade (Asia Society)

JAKARTA, NETRALNEWS.COM - Indonesia remains one of the fifth most favored place for investment by Australia, according to a survey by Austrade. The result of the survey was in fact revealed during a meeting of President Joko Widodo (Jokowi) with 13 Australian business leaders in Australia on Feb 25, while Jokowi was paying a two-day state visit to the immediate neighboring country.

During the meeting, several Australian businessmen expressed interest in investing up to US$5 billion in Indonesia, according to Thomas Trikasih Lembong, chairman of the Indonesian Investment Coordinating Board (BKPM), who moderated the business meeting.

They are mostly interested in mining and processing, food and beverage industry, tourism, water supply, and hotel industry and infrastructure. Based on data at the BKPM, Australian investment in Indonesia in 2016 had reached $174 million, up four percent from $167 million in 2015.

Within the next three to five years, Australian businessmen have planned to invest a total of Rp39 trillion, according to Lembong. BKPM invited Austrade, an Australian government institution in charge of promoting and attracting investors to Australia, to visit Indonesia.

Indonesian Foreign Affairs Minister Retno LP Marsudi said the Australian business players expressed their interest to expand businesses in Indonesia. One of the investors personally expressed his expression of confidence to Jokowi in the business climate in Indonesia .

"I think it is very good if we are in the top five position of the Australian businessmen in Indonesia," the foreign minister added. Furthermore, Marsudi expressed her satisfaction that the state visit has yielded concrete results in the economic, political, legal, and security fields as well as closer people-to-people relations.

In the economic field, Jokowi and Australian Prime Minister Malcom Turnbull agreed that negotiations on the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) could be concluded by late 2017. Turnbull noted that the two countries had huge economic potentials that have not yet been explored.

Jokowi also called for the removal of Australian barriers to the imports of Indonesian products, such as palm oil and paper. Indonesia has managed to gain access to the herbicide and pesticide markets. Australia's herbicide and pesticide imports reached $1.3 billion to $1.5 billion.

The Indonesian government has also allowed the import of cows weighing up to 440 kilograms per head, from a maximum of 350 kilograms earlier, with the objective of reducing the price of meat. In the defense field, Australia and Indonesia agreed to continue defense cooperation.

"We have agreed to continue defense cooperation including in the fields of exchange and training," Turnbull said in a joint statement with Jokowi after an Australia-Indonesia bilateral meeting at Kirribilli House on Feb 26. "This includes defense industry where armored vehicles are being produced," he remarked.

In Jan, Indonesia suspended military cooperation with Australia for "technical reasons" believed to relate to offensive materials displayed at an Australian military base. Indonesia later clarified that the suspension was only related to joint language training due to a small incident that has offended Indonesia's dignity as a nation.

In the political and security fields, the two countries have agreed to intensify cooperation in counterterrorism and the fight against transnational crimes and illegal, unreported, and unregulated fishing. Practical cooperation between the two countries in the fight against terrorism, extremism, and violence was aimed at making the people feel more secure and to assure security in the two countries' territories.

To promote "people-to-people" relations, Jokowi opened Indonesian language centers in Perth, Melbourne, and Canberra. "There are several more to be established in Australia. The establishment of the language centers should be viewed as our efforts to promote our language at the international level," Marsudi noted. More Indonesian language centers will be established in Darwin, Brisbane, and Sydney.

Some 20 thousand Indonesians study in Australia, while over 3 thousand Australians study in Indonesia. Turnbull underlined that the relations between Australia and Indonesia are more than agreements, because Indonesia is also the main destination of Australian tourists. In 2016, one million Australians visited Bali, he pointed out.

"We also have common interests with regard to peace and stability in the sea and on land, and we have urged countries around to continue settling all the disputes and problems based on international laws," he asserted.

Australia recognized the important role of the Association of Southeast Asian Nations (ASEAN) in the framework of regional security and economy. "I anticipate the presence of Widodo for a summit between Australia and ASEAN in 2018."