Media release - Minister for Foreign Affairs

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Joint Media Release

Australian Minister for Foreign Affairs, Alexander Downer

Canberra 7-8 December

Australia Indonesia Ministerial Forum and Australia-Indonesia Development Area Ministerial Meeting

The fifth meeting of the Australia-Indonesia Ministerial Forum and the third Ministerial meeting of the Australia-Indonesia Development Area (AIDA) was held in Canberra on 7-8 December 2000.

Sixteen Australian and Indonesian Ministers attended the Forum - eleven from Australia and five from Indonesia. The strong participation reflects the enduring commitment of both countries to maintaining good neighbourly relations based on mutual respect and to further developing a mutually beneficial bilateral relationship across the entire spectrum of cooperation.

The meeting took place against the backdrop of the historic democratic transformation underway in Indonesia. Ministers welcomed the achievements to date of Indonesia's political and economic reform process, and Australia underlined its commitment to support Indonesia as it addresses remaining social and economic challenges. Ministers discussed Indonesia's decentralisation program and noted the potential benefits this would bring for governance and the business environment. They agreed to share information on the legal and regulatory framework necessary for smooth implementation of decentralisation.

Australia reiterated strong support for Indonesia's territorial integrity, noting that Australia's national interests were closely linked to Indonesia's stability and prosperity.

Ministers agreed that President Wahid's proposal on the West Pacific Forum was a constructive idea, which would be taken forward further early next year.

Ministers welcomed the continued commitment of Australian and Indonesian business to strengthening the bilateral economic and commercial relationship. Ministers expressed their appreciation for the valuable contribution made by business to the success of the Forum. They urged business to look anew at investment opportunities in Indonesia, including in the context of the Australian roadshow of the Indonesian Bank Restructuring Agency and other investment promotion in Australia. Ministers also welcomed Australia's commitment to supporting a major World Bank/ADB project on SME (Small and Medium Enterprise) development.

Ministers noted the range of investment initiatives underway on bilateral investment. These included facilitating the Indonesia Bank Restructuring Agency's visit to Australia on 5-7 December, and the Australian Department of Foreign Affairs and Trade's East Asia Analytical Unit's report on investment opportunities in Indonesia, which will be launched by Foreign Minister Alexander Downer on 12 December. Other initiatives were Austrade's assistance towards Indonesia opening a trade office in Sydney, Australia's provision of trade law and trade policy training for Indonesian officials, and the development of an AIDA business directory.

In reviewing the course of economic developments since the Asian economic crisis, Ministers acknowledged the importance of sound macroeconomic policies and strong prudential regulation and supervision of financial institutions in reducing the risks of economic crisis. Australian Ministers reaffirmed their commitment to cooperating with Indonesia and providing assistance to help improve the quality of economic governance and to build capacity. Indonesian Ministers welcomed Australia's pledge of A$120 million at the Consultative Group on Indonesian meeting in Tokyo.

Ministers emphasised the need for international financial reform to deliver enhanced stability to the global economy and financial markets, as well as the need to maintain the flow of capital that will provide further growth throughout much of East Asia. Ministers underlined the importance of international support for Indonesia's reform and recovery agenda, noting the progress that has been made under the new IMF Extended Fund Facility. Ministers welcomed strong indications of a broadening Indonesian economic recovery, and the commitment of the Government of Indonesia to continuing economic reforms including through its ten-point plan.

Ministers noted the importance of maintaining a non-discriminatory and open global trading system and called for the launch of a new round of WTO negotiations at the earliest opportunity in 2001 based on a balanced agenda sufficiently broad-based to respond to interests of all members.

Ministers noted that illegal migration posed a threat to national security and prosperity and expressed their commitment to continue developing closer cooperation against illegal people trafficking and smuggling, including in international fora and with international organisations. In this context, Ministers agreed that officials should continue their constructive collaboration and should report the progress of their activities to Ministers. Ministers acknowledged the value of discussion of immigration issues at the Ministerial Forum.

Ministers undertook to renew efforts to meet counterparts and develop further personal and institutional linkages. Ministers agreed to develop closer ties in marine cooperation, including marine environment issues, aquaculture and tourism. To this end, Ministers established a regular meeting of Marine Ministers to discuss issues of common concern and mutual benefit.

Ministers acknowledged that excellent cooperation existed in a wide range of areas, such as economic development cooperation, education, law enforcement, immigration, cultural ties and people-to-people contact. Ministers endorsed the continued development of the Ministerial Forum and AIDA, including into new areas.

Ministers agreed that the sixth Ministerial Forum and the fourth AIDA meeting should be held in Indonesia in the middle of 2002.

AIMF OUTCOMES AND JOINT PLAN OF ACTION

Ministers agreed on the following Joint Plan of Action aimed at supporting and accelerating Indonesia's economic recovery and thereby helping deepen the bilateral economic and commercial relationship. The plan builds on and expands existing cooperation activities and also encompasses new initiatives.

AIMF OUTCOMES

Ministers committed to following up the three Agreements signed at the Forum, namely:

The Joint Communique on Agriculture

The Plan of Action on Health Cooperation

The MOU on Transport Cooperation

Australia facilitated the roadshow by the Indonesian Bank Restructuring Agency over 5-7 December.

JOINT PLAN OF ACTION

Investment and Trade Promotion

Both countries will encourage more frequent trade and investment missions. An Australian mission, to be led by the Minister for Trade, Mr Vaile, will visit Indonesia in early 2001. Australia indicated its willingness to help facilitate an Indonesian Trade and Investment mission to Australia in 2001.
Australia and Indonesia will strengthen dialogue on trade and investment. Trade ministers and senior officials will meet annually. The Australian Minister for Foreign Affairs will launch an investment study in December 2000 entitled "Indonesia : Facing the Challenge".
Australia will assist Indonesia strengthen its trade promotion efforts, including by training and capacity building programs for the Indonesian National Agency for Export Development. Australia will assist Indonesia to develop further its trade policy and trade law capabilities, including through scholarships in Australia and through targeted training.
Both countries will work to improve understanding of importers and exporters on food standards and labelling requirements and to help reduce the incidence of holding orders. Australia undertook to change further its imported food inspection regime, with a view to allowing greater flexibility regarding minor labelling infringements, pre-inspection correction of labelling flaws and eventually to shifting the responsibility for labelling from producers and exporters to importers. These changes should lead to further substantial falls in the number of holding orders, currently at 81, down from 119.
Australia and Indonesia will facilitate trade in food and encourage closer integration of the Australian and Indonesian livestock and cattle fattening industries.

Development Assistance and Technical Cooperation

Australia will provide an increased number of scholarships for students and some teachers of English, support for curriculum development and increase funding for Australian studies in Indonesia through the Australia-Indonesia Institute. Australia's $120 million in total flows to Indonesia will continue to assist Indonesia implement its economic reform agenda.
Australia and Indonesia will continue their focus on strengthening Indonesia's economic governance. High priority will be given to support for improved economic and financial management.

Small and Medium Enterprises

Australia will work with Indonesia on SMEs, building on Australia's $260,000 initiative to fund feasibility and design work for a major SME program in Eastern Indonesia. Australia will provide $2 million to assist Indonesian SMEs through Specialised Business Development Training for SME owners.

AIDA and Regional Linkages

Ministers committed to energising the AIDA initiative. Australia will fund an investor services project, aimed at stimulating investment in eastern Indonesia. An AIDA Business Directory will be prepared to facilitate business contact between Australian and Indonesian enterprises.
Ministers expressed interest and will disseminate information about the Bitung Free Trade Zone in North Sulawesi Province to potential investors.

Law Enforcement and Illegal People Trafficking

Australia will support Indonesia on law enforcement and legal issues. Australia will consider ways to improve Indonesia's capabilities in this respect, including through organising an exploratory mission of Indonesian officials to consider the possibility of Indonesia obtaining appropriate police vessels from state governments.

Attachment: List of Ministerial Attendees

The Australian delegation was led by the Hon Alexander Downer MP, the Minister for Foreign Affairs, and included the Hon John Anderson MP, Deputy Prime Minister and Minister for Transport and Regional Services; the Hon Peter Costello MP, Treasurer; Senator the Hon Robert Hill, Minister for the Environment and Heritage; the Hon Dr David Kemp MP, Minister for Education, Training and Youth Affairs; Senator the Hon Nick Minchin, Minister for Industry, Science and Resources; the Hon Daryl Williams AM QC MP, Attorney-General; the Hon Philip Ruddock MP, Minister for Immigration and Multicultural Affairs; the Hon Warren Truss MP, Minister for Agriculture, Fisheries and Forestry; the Hon Dr Michael Wooldridge MP, Minister for Health and Aged Care; and Senator the Hon Rod Kemp, Assistant Treasurer.

The Indonesian delegation was led by HE Dr Alwi Shihab, Minister for Foreign Affairs and included HE Mr Luhut Panjaitan, Minister for Industry and Trade; HE Dr Bungaran Saragih, Minister for Agriculture and Forestry; HE Dr Yahya Muhaimin, Minister for Education; and HE Mr Sarwono Kusumaatmadja, Minister for Marine Affairs and Fisheries.