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Sunday, November 24, 2013

Australia v Indonesia - Ego over economics

Give aid, reward with trade.

And the stand-off with Indonesia continues following the revelation that Australia had tapped the phones of Indonesian President Susilo Bambang Yudhoyono, his wife, Ibu Ani Yudhoyono, and a number of other Indonesian officials in 2009.

Australia claims this was in response to the deaths of a number of Australians from terrorist attacks in Indonesia.  Australia and Indonesia already cooperate with each other in combating terrorism, so it is doubtful that bugging the phones of the President and his wife, would have been of benefit.

Understandably, President Yudhoyono is outraged, as is the rest of Indonesia, and has called for a formal response and an apology from Australia. Prime Minister, Tony Abbott, is refusing to apologise and has yet to formally respond to President Yudhoyono.

Whether Abbott should apologise or not is debatable. As has been pointed out numerous times, most countries spy on each other. However, Abbott should at least call Yudhoyono and discuss the matter. This is the basis of international diplomacy.

As a result of this insult, Indonesia has suspended military and people smuggling cooperation with Australia, placing additional pressure on Abbott's hyperbolic and hysterical 'Stop the boats' campaign. Cooperation with Indonesia is essential to the success of any policy regarding asylum seekers.

In opposition, Abbott often ran from the difficult questions. There is the embarrassing footage of Abbott being lost for words when confronted by a journalist over his comment, 'Shit happens' regarding the death of a soldier in Afghanistan. (

Now that Abbott occupies the highest office in the country, he is still running from difficult discussions. In relation to the spying allegations, he has hidden behind Parliament in order to make a few casual statements.

In the meantime, Indonesian anger against Australia grows while Abbott keeps his head firmly planted in the sand, hoping it will blow over.

Conversely, in Australia, there are those who agree with Abbott and angrily claim that we should cancel aid to Indonesia, as though Indonesia needs Australia more than the other way around.

It may be prudent to consider who needs who.

Remember, the crisis that Australia's farmers faced when former Prime Minister Julia Gillard banned live exports to Indonesia? The ban crippled Australia's cattle farmers.

Australia is the largest source of international aid to Indonesia, and will provide an estimated $683 million during 2013/14. In 2012/13, Australia provided approximately $541.6 million in aid. Certainly not small potatoes.

However, mutual trade between Australia and Indonesia accounted for $11.1 billion in 2012. Indonesia is Australia's 12th largest trading partner. Of this, Australian exports accounted for approximately $4.8 billion and Australian imports for 6.3 billion, according to Department of Foreign Affairs and Trade (

Indonesia is the fourth most populous nation in the world. Its economy is growing rapidly, with real GDP growth of 6.3% in 2013. It is one of Australia's most important economic trading partners, and has huge potential for increased growth. Particularly, as Australia's aid money is used to raise the economic standards of Indonesia. Aid = better economy = increased trade = better economy etc. It's not rocket science.

Australia benefits significantly from the relationship with Indonesia. It does no good for Abbott to preference ego over economics and diplomacy.

After winning the 2013 election Prime Minister Abbott claimed that the 'adults are back in charge' of the government.  Well, it's time for Prime Minister Abbott to pull on his big-boy pants, phone or visit President Yudhoyono and resolve this issue as soon as possible.

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