“New Zealanders often had a negative perception of
Indonesia for human rights reasons in West Papua.
Murray McCully, New Zealand’s minister of foreign affairs, made his
first trip to Indonesia since May 2010 on Tuesday, to meet his
counterpart for discussion on such issues as education and geothermal
energy.
Official visits are likely to be more frequent as New Zealand recognizes the growing importance of Indonesia as a trading nation and its influence in the diplomatic affairs of the Asia-Pacific region. The Southeast Asian nation’s large population and burgeoning middle class provide a perfect sales opportunity for exports of high quality meat and dairy, two of New Zealand’s major exports.
“You’ve seen both the minister of trade and the prime minister within the last 12 months leading trade groups here, and you’ll see more of that in the period ahead,” McCully said after the Joint Ministerial Commission meeting in Jakarta last week. “It would be fair to say that ... we’re actually very ambitious about what can be achieved here.”
To reinforce its commitment to increased trade with Indonesia, New Zealand Trade Minister Tim Groser announced last month the appointment of Tim Anderson as trade commissioner to Indonesia, a position that will begin in January 2013. Previously, New Zealand had one trade commissioner representing Malaysia, Indonesia and Brunei based in Kuala Lumpur.
“I think it’s quite fair to say New Zealand business has yet to fully capitalize on the opportunities that are here,” McCully said. “I think other countries have become a little more assertively engaged in this market than we have. Our friends across the Tasman [Sea] are a good example,” he said, referring to Australia.
Indonesia’s commodity exports consist mainly of energy products and minerals as well as lumber and agriculture. These items share virtually no overlap with New Zealand’s temperate-climate agricultural and forestry export products, making the two nations a natural fit for trade in terms of comparative advantage.
New Zealand’s total trade with Indonesia in 2011 was valued at NZ$1.57 billion ($1.28 billion), making Indonesia New Zealand’s 11th most important trading partner, according to Statistics New Zealand. New Zealand exported NZ$862 million of products during the same period, while Indonesian imports totaled NZ$702.4 million, up 24 percent from the previous year. New Zealand’s $140 billion economy is about a fifth of Indonesia’s.
Trade will be made even easier by the Asean Australia-New Zealand Free Trade Agreement, which came into force for New Zealand in December 2009 and at the start of this year for Indonesia. The deal will eliminate tariffs on all imported goods by 2020.
Susaningtyas Kertopati, a member of the House of Representatives’ foreign affairs and defense commission, said that the enhanced cooperation between Indonesia and New Zealand will be mutually beneficial and might also help strengthen Jakarta’s relationship with Australia.
“The signing of the exchange of letters may provide job opportunities for a wide range of professionals from cooks to Indonesian language teachers, so this is very positive,” she said.
Still, there is some way to go to remove obstacles to more freely flowing trade between Indonesia and New Zealand. Non-tariff barriers, such as licensing and quota systems, still pose an inhibition to trade. McCully told the Jakarta Globe that these issues had come up in conversations at the JMC and that “we’re working with the authorities here to try and resolve those issues to go forward.”
On the New Zealand end, McCully said that while there were frameworks in place for economic initiatives in Indonesia, businesses needed more encouragement to get on board.
“I think the New Zealand government needs to be more active in promoting the opportunities that are now available as a result of the improved trade architecture. One of the reasons that we’re reshaping the Auckland office of the ministry of foreign affairs and trade is to make it more than communicating with business leadership. It’s something I asked the ministry to do because I think that there’s been a sense that the job is done once the ink has dried on a free trade deal and that’s not the case. Our job is to tell the story to the business community to get them more engaged,” McCully reflected.
Some Indonesian experts question the need to expand trade with New Zealand. Its population of 4.4 million people is dwarfed by Indonesia’s 240 million.
Hikmahanto Juwana, an international law professor at the University of Indonesia, said that New Zealand was not a strategically important trading partner.
“New Zealand gets more benefit from the bilateral relationship,” he said. “For them, we are important because they have livestock to export as well as education programs that they want to promote to us.”
New Zealand is encouraging Indonesians to complete their studies in New Zealand by offering 50 scholarships, 15 of which are set aside for those attending the Geothermal Institute at the University of Auckland. The country is also promoting its tourism, hoping to become an attractive holiday destination for Indonesian travelers.
Outside of trade, Indonesia is beginning to be recognized as a growing diplomatic leader in the Asia-Pacific region. Indonesia recently embarked on diplomatic initiatives such as Foreign Minister Marty Natalegawa’s attempts to encourage four members of the Association of Southeast Asian Nations to develop a common statement with China on the South China Sea Accord last month.
McCully announced his appreciation for Indonesia’s diplomatic role at a press conference following the JMC.
“I think the region has had its share of significant challenges over the past year and the quiet and effective diplomacy that Minister Natalegawa brings to regional affairs is greatly appreciated by our country and I believe by the wider region.”
Areas where New Zealand may offer less praise are on sensitive issues regarding West Papua, one of four special autonomous regions.
New Zealand media, the Green political party and branches of nongovernmental organizations such as Amnesty International regularly criticize alleged human rights abuses in West Papua.
“New Zealanders often had a negative perception of Indonesia for human rights reasons. New Zealand sees itself as a leader in human rights promotion and the Papua issue will be rightly an ongoing concern,” said Ben Thirkell-White, a senior lecturer at the Victoria University of Wellington’s department of politics and international relations.
“Without wishing to excuse … human rights abuses, I also think it’s unfortunate more New Zealanders aren’t aware of Indonesia’s enormous success in poverty reduction … its smooth transition to democracy and its ongoing impressive economic growth,” he added.
McCully said that an Indonesian trade office in New Zealand would be welcomed and added that increased direct air links between the two countries would be a key factor in developing the economic relationship.
“My own view is that if we can just get those direct links, it’s going to change the nature of the game,” he said.
Air New Zealand is the only airline flying between New Zealand and Indonesia. It began to operate twice weekly flights from Auckland to Bali during the peak holiday season of June to October.
“That is a start,” says McCully, “but it’s not the end of the story. It would be good to see Garuda [Indonesia] come to the party at some point and we are actively engaged in trying to secure progress there.”
Emirsyah Satar, president director of national flag carrier Garuda Indonesia, said that the airline plans to provide direct flights to New Zealand at the end of next year or early 2014, depending on airplane availability and passenger volume.
Still, it looks as though the relationship between New Zealand and Indonesia is set to continue. New Zealand’s Trade Minister Tim Groser, who was once based here as the country’s ambassador, is set to arrive in Jakarta for a four-day visit this week.
Official visits are likely to be more frequent as New Zealand recognizes the growing importance of Indonesia as a trading nation and its influence in the diplomatic affairs of the Asia-Pacific region. The Southeast Asian nation’s large population and burgeoning middle class provide a perfect sales opportunity for exports of high quality meat and dairy, two of New Zealand’s major exports.
“You’ve seen both the minister of trade and the prime minister within the last 12 months leading trade groups here, and you’ll see more of that in the period ahead,” McCully said after the Joint Ministerial Commission meeting in Jakarta last week. “It would be fair to say that ... we’re actually very ambitious about what can be achieved here.”
To reinforce its commitment to increased trade with Indonesia, New Zealand Trade Minister Tim Groser announced last month the appointment of Tim Anderson as trade commissioner to Indonesia, a position that will begin in January 2013. Previously, New Zealand had one trade commissioner representing Malaysia, Indonesia and Brunei based in Kuala Lumpur.
“I think it’s quite fair to say New Zealand business has yet to fully capitalize on the opportunities that are here,” McCully said. “I think other countries have become a little more assertively engaged in this market than we have. Our friends across the Tasman [Sea] are a good example,” he said, referring to Australia.
Indonesia’s commodity exports consist mainly of energy products and minerals as well as lumber and agriculture. These items share virtually no overlap with New Zealand’s temperate-climate agricultural and forestry export products, making the two nations a natural fit for trade in terms of comparative advantage.
New Zealand’s total trade with Indonesia in 2011 was valued at NZ$1.57 billion ($1.28 billion), making Indonesia New Zealand’s 11th most important trading partner, according to Statistics New Zealand. New Zealand exported NZ$862 million of products during the same period, while Indonesian imports totaled NZ$702.4 million, up 24 percent from the previous year. New Zealand’s $140 billion economy is about a fifth of Indonesia’s.
Trade will be made even easier by the Asean Australia-New Zealand Free Trade Agreement, which came into force for New Zealand in December 2009 and at the start of this year for Indonesia. The deal will eliminate tariffs on all imported goods by 2020.
Susaningtyas Kertopati, a member of the House of Representatives’ foreign affairs and defense commission, said that the enhanced cooperation between Indonesia and New Zealand will be mutually beneficial and might also help strengthen Jakarta’s relationship with Australia.
“The signing of the exchange of letters may provide job opportunities for a wide range of professionals from cooks to Indonesian language teachers, so this is very positive,” she said.
Still, there is some way to go to remove obstacles to more freely flowing trade between Indonesia and New Zealand. Non-tariff barriers, such as licensing and quota systems, still pose an inhibition to trade. McCully told the Jakarta Globe that these issues had come up in conversations at the JMC and that “we’re working with the authorities here to try and resolve those issues to go forward.”
On the New Zealand end, McCully said that while there were frameworks in place for economic initiatives in Indonesia, businesses needed more encouragement to get on board.
“I think the New Zealand government needs to be more active in promoting the opportunities that are now available as a result of the improved trade architecture. One of the reasons that we’re reshaping the Auckland office of the ministry of foreign affairs and trade is to make it more than communicating with business leadership. It’s something I asked the ministry to do because I think that there’s been a sense that the job is done once the ink has dried on a free trade deal and that’s not the case. Our job is to tell the story to the business community to get them more engaged,” McCully reflected.
Some Indonesian experts question the need to expand trade with New Zealand. Its population of 4.4 million people is dwarfed by Indonesia’s 240 million.
Hikmahanto Juwana, an international law professor at the University of Indonesia, said that New Zealand was not a strategically important trading partner.
“New Zealand gets more benefit from the bilateral relationship,” he said. “For them, we are important because they have livestock to export as well as education programs that they want to promote to us.”
New Zealand is encouraging Indonesians to complete their studies in New Zealand by offering 50 scholarships, 15 of which are set aside for those attending the Geothermal Institute at the University of Auckland. The country is also promoting its tourism, hoping to become an attractive holiday destination for Indonesian travelers.
Outside of trade, Indonesia is beginning to be recognized as a growing diplomatic leader in the Asia-Pacific region. Indonesia recently embarked on diplomatic initiatives such as Foreign Minister Marty Natalegawa’s attempts to encourage four members of the Association of Southeast Asian Nations to develop a common statement with China on the South China Sea Accord last month.
McCully announced his appreciation for Indonesia’s diplomatic role at a press conference following the JMC.
“I think the region has had its share of significant challenges over the past year and the quiet and effective diplomacy that Minister Natalegawa brings to regional affairs is greatly appreciated by our country and I believe by the wider region.”
Areas where New Zealand may offer less praise are on sensitive issues regarding West Papua, one of four special autonomous regions.
New Zealand media, the Green political party and branches of nongovernmental organizations such as Amnesty International regularly criticize alleged human rights abuses in West Papua.
“New Zealanders often had a negative perception of Indonesia for human rights reasons. New Zealand sees itself as a leader in human rights promotion and the Papua issue will be rightly an ongoing concern,” said Ben Thirkell-White, a senior lecturer at the Victoria University of Wellington’s department of politics and international relations.
“Without wishing to excuse … human rights abuses, I also think it’s unfortunate more New Zealanders aren’t aware of Indonesia’s enormous success in poverty reduction … its smooth transition to democracy and its ongoing impressive economic growth,” he added.
McCully said that an Indonesian trade office in New Zealand would be welcomed and added that increased direct air links between the two countries would be a key factor in developing the economic relationship.
“My own view is that if we can just get those direct links, it’s going to change the nature of the game,” he said.
Air New Zealand is the only airline flying between New Zealand and Indonesia. It began to operate twice weekly flights from Auckland to Bali during the peak holiday season of June to October.
“That is a start,” says McCully, “but it’s not the end of the story. It would be good to see Garuda [Indonesia] come to the party at some point and we are actively engaged in trying to secure progress there.”
Emirsyah Satar, president director of national flag carrier Garuda Indonesia, said that the airline plans to provide direct flights to New Zealand at the end of next year or early 2014, depending on airplane availability and passenger volume.
Still, it looks as though the relationship between New Zealand and Indonesia is set to continue. New Zealand’s Trade Minister Tim Groser, who was once based here as the country’s ambassador, is set to arrive in Jakarta for a four-day visit this week.
Source: The Jakarta Globe Additional reporting by Ezra Sihite, Arientha Primanita & Dion Bisara
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