INDONESIA: Praise for bilateral trade deal with Japan
Updated
Japanese Prime Minister Shinzo Abe is continuing his seven-day tour of India, Malaysia and India. On Tuesday Mr Abe was in New Delhi for talks on trade, investment and a controversial nuclear cooperation deal. He travelled to Delhi from Indonesia, where he signed a wide-ranging free-trade agreement with President Susilo Bambang Yudhoyono. The two leaders also discussed democratic reform in Indonesia. The trade deal will abolish almost all import taxes on Indonesian goods from next year; in return, Jakarta will supply Japan with gas.
Presenter: Corinne Podger
Speakers: Professor Arif Budiman, head of the Indonesian Program at the University of Melbourne
BUDIMAN: Yes I think so, first of all I think basically that the economic relations with Japan means also Indonesian can export its agricultural exports, especially to Japan, and that means Indonesia can be diversifying its exports, not only to Australia, America or China, but also to Japan. So Indonesia will not be dependent on one country. And secondly also to have a balance of trade, as we know that industrial goods of Japan have been quite a lot coming to Indonesia, and so by exporting to Japan meaning also that there will be a more balanced trade between Japan and Indonesia and that will be good for Indonesia, I think so. Japan has always been kind to Indonesia in terms of economic aid, if there is a problem, during the tsunami also Japan helped a lot. So it's just a continuation of the good relationship, or better and better relationship between Indonesia and Japan.
PODGER: Indeed in fact separate to the signing of the bilateral trade agreement Mr Abe announced an economic assistance package worth one-point-seven-billion yen to help Indonesia with fighting bird flu.
BUDIMAN: Yeah right, yeah.
PODGER: Now part of the deal requires Jakarta to become a stable energy supplier for Japan and after it was signed the Indonesian energy firms Pertamina and Medco Energi Internasional said they'd begin building a liquid natural gas refinery next year. Is that a positive development economically?
BUDIMAN: Yes I think now Japan always needs energy because they don't have their own resources, and by helping Indonesia that's one of the Japanese interests so they can have a kind of guarantee that it will be continuing. And Japan has been helping quite a lot in building infrastructure for Indonesia, especially in the field of energy. So this is not the first time but it has been a long time, like the energy in north Sumatra, not only oil but also gas and other things.
PODGER: Now Mr Abe's also said after signing the deal that Tokyo wants to help Indonesia reform its economy and investment climate. What do you think he was talking about there and how might that play out?
BUDIMAN: Sometimes Indonesia is known as a kind of dangerous country because of the radical Islamic movement and other things, and many big countries are afraid to come to Indonesia, especially a non-Muslim country and mostly a non-Muslim country, a western country and Japan. So they're afraid of coming to Indonesia. By giving example that Japan wants to invest in Indonesia it creates a sense of security in Indonesia, so I think by giving example that Japan is not afraid of coming to Indonesia this will encourage other countries to invest in Indonesia, especially the US. And also Japan is trying to help the building of democracy in terms of giving some education. There are a lot of Indonesian students studying in Japan also. Japan has been strengthening the educational institutions in Indonesia, so to make Indonesia more, many more educated people and at the people's level. And that will strengthen Indonesia because then people with education will tend to be maintaining or defending their democracy.
PODGER: Mr Abe spoke specifically about democratisation yesterday as you say, and is it limited purely to educational initiatives or are there areas in which Japan might be looking to assist Indonesia with policy and structure?
BUDIMAN: I think structure also in the sense that the ??? education maybe but it's not education like in general to the people but also some political education given to the political parties. So I think it's more general in terms of strengthening democracy and democratic institutions like during the elections, elections of the regional area and Indonesia needs a lot of assistance in the elections of the regional leaders. And I think Japan has been helping, not intervening, but helping to finance these elections in order to make these elections going smoothly.
