Phil Turtle
National President

President's Column

Dear Members and Friends,

With many countries around the globe suffering terrible second, third and fourth waves of COVID-19 infections, our governments, health systems and pharmaceutical companies race to effectively roll out the vaccines that will get us to a position of manageably living with COVID-19 in our communities. International travel remains particularly difficult, and not recommended, except for repatriation and exceptional circumstances, making international business and recreational travel a distant memory for most.

In this time though we are delighted to welcome Australia’s new Ambassador to Indonesia, Ms Penny Williams PSM. The Ambassador’s appointment was formally announced on the 14th of April, as Gary Quinlan AO concluded his posting.

AIBC was also delighted to be represented by our ACT Chapter Chair, Judy Anderson, at a farewell reception in Canberra recently for Ambassador Quinlan, hosted by DFAT Secretary Frances Adamson, and attended by many familiar faces with a long-standing association between our countries. We wish Gary all the very best in his next chapter, and thank him for his exemplary service during his long and distinguished career.

Australia’s new Ambassador to Indonesia, Ms Penny Williams PSM

In another recent development, the Indonesian Investment Coordinating Board (BKPM), which plays a critical role for Australian businesses in Indonesia, was elevated to the official status of a Ministry, with BKPM Chairman Bahlil Lahadalia becoming the inaugural Investment Minister in a move to further strengthen Indonesia’s appeal to foreign investors.

Looking ahead, next year Indonesia will assume the Presidency of the G20 and will host G20 Leaders later in the year for the annual G20 Summit. This will be a great opportunity for the G20 to meet in our neighbourhood, and bring a focus to Trade, Investment and other important matters in our region. It will also be a reminder to many Australian businesses of the importance and proximity of Indonesia, as they face heightened pressure to diversify their markets.

With the end of the financial year soon upon us, it is the all-important time of year for AIBC Membership renewals. AIBC Members should by now have received a message from me capturing some of AIBC’s activities through the year, and our ambitions for the future in support of our Members and in developing further the Trade and Investment relationship.

We will soon be marking the 1st anniversary of IA-CEPA, and we have been greatly encouraged by the amount and breadth of activity in support of this Agreement. AIBC’s mission remains very much in the interests of our Members and in the National Interests of both our countries. We hope you will continue with us on this journey, with membership links here for returning and new Members.

Phil Turtle
National President

As the first anniversary of the entry into force of IA-CEPA draws nearer, the steady stream of news from various sectors taking advantage of IA-CEPA provisions has been encouraging, including in potatoes.

The Australian Government funded $40M 5-year Economic Cooperation Program supporting IA-CEPA implementation in three priority sectors: Agrifood, Advanced Manufacturing and Services (skills) was recently launched under the Katalis banner. The Katalis mission is to help Indonesian and Australian industries create complementary trade, investment and inclusive development business partnerships under IA-CEPA, and news on this can be followed on their Twitter account here.

After much development and consultation, DFAT’s “Blueprint for Trade and Investment in Indonesia” nears completion, with a launch date to be announced soon. AIBC, along with our partners, are looking forward to working alongside DFAT in the launch and promotion of this important document, and more importantly engaging with the business community to further advance business engagement with Indonesia.

Businesses are reminded too that if they encounter any non-tariff trade barrier, they are able to register them here on the trade barriers gateway (Australian Government) for follow-up.

Full and updated details on IA-CEPA can be viewed on the DFAT portal here.

In Australia, people over the age of 50 years have been encouraged to access the AstraZeneca vaccine. The Pfizer vaccine is prioritised for people under 50 and eligibility and appointments can be checked here.

In Indonesia, a range of vaccines are being rolled out with some hurdles along the way. Businesses have been also encouraged, through a KADIN managed Program, to pay for and provide vaccines to their employees to assist with their health as well as protect business continuity.
 
For further information on COVID-19 responses, the Australian Government’s website here, remains a comprehensive portal to the very broad range of health and business related information.
 
Our counterparts at the IABC in Jakarta have been kindly circulating an updated informal timeline/overview, with the latest here.

WA Update

Understanding Indonesia - Opportunities for WA METS

Recently AIBC WA partnered with Austmine and the WA Government (Dep’t of Jobs, Science, Tourism and Innovation), to deliver a forum focussing on opportunities for Australian METS companies in the Indonesian Mining Sector titled “Understanding Indonesia – Opportunities for WA METS”.

L-R Panellists Stuart Brown (PT Coates Indonesia), Andrew Prout (PT Bis Industries) and Dr Maria Lantu

Panellists for this event were Dr Maria Lantu, Andrew Prout (President Director of PT Bis Industries), Stuart Brown (President Director of PT Coates Indonesia), joined by other speakers from Austmine, the WA Government and the Indonesian Consulate General.

L-R Nanda Avalist (Consul – KJRI), Ade Suliartini (Australia Awards Scholar – Curtin University, and Peter Hong (AIBC and MKT Taxation Advisors)

This event served as a follow up to the recent launch of the WA Government’s report into “The opportunity for Western Australian METS companies in Indonesia”

Thanks to Austmine, the WA Government and other event partners for their support of this great event.

Virtual Mission Indonesia : A Trade and Cultural Exchange

AIBC in WA supported hosts the City of Joondalup and the Consulate General of the Republic of Indonesia in Perth, to deliver the “Virtual Mission Indonesia : A Trade and Cultural Exchange”.

L-R James Pearson (CEO, City of Joondalup), Nanda Avalist (Consul, KJRI), Michael Carter (Head, International Trade, CCIWA), Shanti Utami (A/Consul General, KJRI”), Dylan Walsh (Deputy State Director, DFAT), Phil Turtle (National President, AIBC), Ian Goodenough MP (Federal Member for Moore), Chris Bandy (Director, Invest & Trade WA

AIBC National President, Phil Turtle, was Master of Ceremonies for this very interesting and successful event, that brought together local businesses across a range of focus sectors, including Health and Medical, Tourism, Advanced Manufacturing, Cyber Security, Agri-Business, Construction and Bilateral Investment. In sector focussed breakout sessions, businesses were able to discuss opportunities and potential collaborations with selected Indonesian businesses joining online.

Michael Faulkner (City of Joondalup) with Angklung performers from the Indonesian Community in Perth

Aside from the range of presentations, breakout sessions and cultural performances, attendees were treated to wonderfully authentic Indonesian Cuisine courtesy of the Joondulap Resort and executive Chef Ramon van de Griendt.

NSW Update

Farewell Morning Tea for Kadir Gunduz - Coca-Cola Amatil Indonesia

On the 18th of March, Francisco Widojo, Secretary of the NSW AIBC committee attended a morning tea in Sydney to mark the important contribution of Kadir Gunduz, President and Managing Director of Coca Cola Amatil Indonesia.  Pak Kadir is leaving the company in June following 30 years of service with Coca Cola.

AIBC National President, Phil Turtle, was invited to address the gathering virtually, and he reflected both on the personal contribution of Pak Kadir over many years, but also the long history of Coca-Cola Amatil in Indonesia, and many of the industry leading programs undertaken in training and sustainability in particular.

Since 2013, Kadir has led the preparation, marketing, sales and distribution of the world’s favourite beverages to millions of delighted consumers across Indonesia and Papua New Guinea. Under Kadir’s leadership, Amatil made significant investments in infrastructure, sustainability, and people across Indonesia and PNG - the impact of which will be lasting.

AIBC congratulates Pak Kadir on his long and distinguished career, and thanks Coca-Cola Amatil for their ongoing support of AIBC.

Guests with Alison Watkins, Coca-Cola Amatil Group MD (4th from left) and Kadir Gunduz (centre)

SA Update

Strengthen Relationship between Indonesia and Australia
Do we understand each other?

AIBC SA Chapter in collaboration with Indofest - Adelaide 2021 were delighted to present an interactive dialogue to discuss how well do we know each other as neighbouring countries, especially as we have special relations through Indonesia Australia Comprehensive Economic Partnership Agreement (IA CEPA) and Sister-Province State agreement between West Java and South Australia.

Topics we covered include:

• The important role of language and culture to bridge knowledge gap;
• The Consulate General action plan to promote Indonesian culinary to Australian through the Indonesia Spice Up the World program including trade missions for spices, gastro diplomacy by strengthening Indonesian restaurants overseas (including in Australia) and to promote Indonesian gastronomic tourist destinations.
• An overview of investment portfolios in Indonesia for Australian investors;
• Visa or Immigration permit and processes for businesses would like to visit Indonesia for business matters during the COVID-19 pandemic.

Our panellists were:

• Mrs Trisari Dyah Paramita, Consul for Economic Affairs, Consulate General of the Republic of Indonesia in Sydney.
• Mr Henry Rombe, Director of Indonesia Investment Promotion Centre of the Republic of Indonesia in Sydney.
• Mr Made Tony Aryana, Immigration Consul, Consulate General of the Republic of Indonesia

It was a fruitful 20-minute discussion with good crowd at the Morning Talk Show session.

SA Luncheon with the Indonesian Ambassador

On Monday 29 March 2021, five members of the committee attended a luncheon which Indonesian Ambassador Kristiarto Legowo hosted with AIBC. Accompanying the Ambassador were Education and Culture Attaché Imran Hanafi; Minister Counsellor (Information, Socio-Cultural Affairs), Ghofar Ismail; Consul for Information, Socio-Cultural Affairs at Indonesian Consulate-General in Sydney, Abdul Nazar; and Indonesia Trading House Australia’s Operations Director Andrew Wanandy.

ACT Update

AIBC ACT welcomed the Australian National University in partnership and the Centre for Indonesian Policy Studies recently kicking off the inaugural Indonesia Policy Dialogue with great insights from HE Muhammad Lutfi, Minister For Trade, Republic of Indonesia. He talked about COVID, Indonesia's growth ambitions and pathways to ensure Indonesia is the 4th largest economy by 2045. Key objectives from the government and President Joko Widodo, are:

• the way out of the COVID pandemic is through a rapid rollout of vaccines, through 415 million vaccines, which is on target, by Q1 2022. This is a key to restore economic growth
• Indonesia needs to reach an equivalent of $29,000 income of GDP per person by 2045, needing a growth trajectory of 6.5% to skip the 'middle income gap'. In 2018, GDP per person was $4,051. The advantages of its demographic bonus which ends in 2038-44 could slow this. Indonesia has been investing in infrastructure and what it calls the ‘transfer of technology' which includes better education.

Looking ahead, the priorities are to:

1. To ramp up investment by 7.3% pa, to 40% of GDP. Barriers need to be removed and Indonesia cannot discriminate between where the investment comes from - China, Australia, Japan etc.
2. To drive manufacturing by opening the economy and encourage both buying imports and selling exports - manufacturing will need to increase to 20% of GDP
3. Push consumption to grow by 5% pa.

Short-term measure to stimulate the economy through COVID has been eg. removing the luxury car tax to address the slump on middle-class cars and motorbikes, which has been very successful in supporting car production.  Car uptake needs to increase to hit middle-income levels. The luxury housing tax has also been removed to stimulate construction. Jewelry and stainless steel has seen strong growth through COVID and the government's policy is to add value, especially for metals.

Export trade has been flat and imports have slumped, impacting the non-oil and gas part of the economy creating industry weaknesses. This constraint flows into consumption.

IACEPA is one of the first CEPA partnerships with countries that allows powerhouse relationships, where partnerships between Indonesia and Australia can be taken to other countries. 

COVID learnings:

1. Indonesia has created sophisticated online platform increasing e-commerce by 384% - digital platforms will expedite trade including by reducing the costs of supply chains
2. elearning has worked in schools - excellence of teaching is important to increase students finishing school (currently only 25%)
3. Healthcare - need to create a better environment for trade.

Panel Discussion - Australian National University's Centre for Asia Pacific Studies Society and ANUs Consulting Service

AIBC ACT is greatly appreciative of being able to participate in a panel discussion for the Australian National University's Centre for Asia Pacific Studies Society and ANU's Consulting Service to discuss employment and other opportunities in the Asia Pacific.

Joining Dominic Nadvillaveetil from HENSOLT, Brendan Hargraves, The Aquaculture Group, Yun Jiang from the Australian Centre of China in the World, Judy Anderson, AIBC ACT Chapter Chair shared the advancements in Australia's relations with Indonesia where it is at with COVID and the opportunities available. There was strong interest in cultural issues, including how we operate differently with great insights and suggestions from the panel.

Celebrating the career of Gary Quinlan AO, Australia's most recent former Ambassador to Indonesia

It was a pleasure for the ACT Chapter to spend a tremendous evening representing the AIBC at the Department of Foreign Affairs and Trade celebrating the career of Gary Quinlan AO, Australia's most recent former Ambassador to Indonesia with new old friends of Indonesia. Gary's contribution to Australia's policy and diplomatic efforts included not only in the most senior diplomatic efforts in our region but also as Ambassador and Permanent Representative to the United Nations, New York; Australia’s Representative on, and President of, the United Nations Security Council;  Deputy Head of Mission, Australian Embassy, Washington; and High Commissioner to Singapore as well as in very senior advisory roles to numerous Ministers and a Prime Minister. It was heartening hearing that his humble ambition to become a diplomat stretched back to when he was the 10-year-old son of a bricklayer in Newcastle. Great stories of his vast and impressive career were shared, including his diplomatic efforts bringing Australia and New Zealand closer through high-impact activities such as bungey jumping! 

AIBC would like to thank Ambassador Quinlan for all his support and efforts over the years and more recently during the challenging COVID period in Indonesia. We wish him well in his future endeavours and welcome staying in contact.

NT Update

On Friday 23 April, the NT Chapter held their networking drinks at the Sandbar, Mindil Beach Resort.  It was a great opportunity to catch up and bring together AIBC Members and others to discuss recent developments in the Australia-Indonesia relationship.

The Forum - Indonesia Rising

Recently the Australia-Indonesia Youth Association - AIYA Victoria and the Indonesian Students Association (PPIA) Melbourne University hosted “The Forum – Indonesia Rising” which took the form of a conference where Indonesian students and Australian students interested in Indonesia came together to discuss contemporary socio-political trends and issues in Indonesia.

As part of this conference, students were given policy issues and were required to come up with practical solutions in response to these issues.

AIBC’s National President, Phil Turtle, was honoured to be invited to share insights with the participants on the state of the Australia-Indonesia Trade and Investment relationship as they prepared their policy briefs.

AIBC congratulates AIYA Victoria and its President Jade Lee (a former AIBC Intern), as well as PPIA Melbourne University and its President Hirzi Putra Laksana, and is delighted to support innovative youth led initiatives that strengthen our important relationship.

Finalists submissions can be read in full here.

Indoview

IIPC and BKPM Newsletters

The Indonesia Investment Promotion Centre (IIPC) has published its March and April newsletters with updates on Indonesia's investment climate and what's happening at IIPC Sydney.

Read the newsletters here and here.

BKPM in Jakarta also published their latest February and March newsletters, which can be viewed here and here.

Renewable Energy – Proposed Pricing Structure

In his recent article, Bill Sullivan of Christian Teo & Partners, looks at feed-in tariff arrangements for renewable energy projects.

"Indonesia’s much anticipated presidential regulation on the purchase of electricity generated from renewable energy sources may now be close to being issued after many delays.

What appears to be a near final version of the presidential regulation indicates that the proposed pricing strategy for electricity generated from renewable energy sources will include a feed-in tariff arrangement. This is something that has long been sought by potential investors in the renewable energy sector.”

To read this article in full, click here.


Indonesia’s Sovereign Wealth Fund

In another article, Bill Sullivan of Christian Teo & Partners, looks at Indonesia’s new Sovereign Wealth Fund.

"The establishment of the Indonesian Sovereign Wealth Fund is one of the most interesting initiatives introduced as part of the 2020 Omnibus Law.

The Indonesian Sovereign Wealth Fund unquestionably has the potential to become a major investment force and help the Government overcome the capital constraints it faces in financing critical infrastructure projects as well as other areas of the economy that the Government wants to prioritize but which areas of the economy sometimes struggle to attract sufficient private sector investment.”

To read this article in full, click here.

Ten ideas to unlock Indonesia’s growth after COVID-19

McKinsey and Company recently released a paper suggesting some key initiatives for Indonesia to surge post Covid-19.

“If Indonesia can quickly return to prepandemic growth rates, the country may become the world’s seventh-largest economy by 2030, from its 16th position in 2019, rising above Italy, Russia, South Korea, and others. To achieve this goal, the country must focus on building productivity and competitiveness once the COVID-19 pandemic subsides, an effort that requires immediate priority.”

Read this article in full here.

PT Pertamina International Shipping Launched

State-Owned Enterprises (SOE) Minister, Erick Thohir, recently unveiled PT Pertamina (Persero)'s first shipping subholding company, PT Pertamina International Shipping (PT PIS). 

“The Minister stated that the inauguration was the first big step for PT PIS to further strengthen its position in the energy and marine logistics sectors.“

Read this article in full here.

Gojek To Go All-Electric By 2030

“Indonesian ride-hailing startup Gojek announced an incredibly ambitious plan called the Three Zeros. By the year 2030, the company defines its goals as achieving zero emissions, zero waste, and zero barriers. To do this, it says it plans to transition its entire rider and driver fleet—all two- and four-wheeled vehicles—to electrics by the end of the decade.”

Read this article in full here.

EV Developments in Indonesia

“Japanese automotive giants Honda, Suzuki, and Mitsubishi Motors have pledged a combined investment of at least $1.2 billion in Indonesia over the next few years to expand their production capacity and make electric vehicles in the country, the companies told Industry Minister Agus Gumiwang Kartasasmita during his visit to Japan this week.

‘Honda has committed to increasing its investment by Rp 5.2 trillion [$361 billion] until 2024. This will include developments on new models in Indonesia,’ Agus said in a virtual press conference.”

Read this article in full here.

Toyota Indonesia considers exports to Australia

“Indonesia's Industry Minister, Agus Gumiwang Kartasasmita, encouraged Japan's Toyota Motor Corporation (TMC) to export vehicles from Indonesia to Australia. TMC may do so by producing in Indonesia the vehicles that Australia needs.

‘We want to open Toyota's export market to Australia, and [Toyota] is considering it,’ Agus said when joining a press conference of the Japan Automobile Manufacturing Association (JAMA) on Thursday, March 11.”

Read this article in full here.

Survey of Indonesian’s attitudes towards Australia

“The 2021 ‘State of Southeast Asia’ survey report by Singapore-based think tank ISEAS – Yusof Ishak Institute reveals some hard realities about Indonesians’ attitudes towards Australia.

The survey exposes the limited impact of Australia’s soft-power efforts in Indonesia and signals the need for a strategic reassessment of our bilateral relationship.”

Read this article in full here.