Debnath Guharoy,
AIBC National President

President's Column

Dear Members and Friends,

The good news: Though the exact dates and cities haven’t been announced, President Joko Widodo will soon be here in Australia for his first official visit since he took office two years ago. The visit to Brisbane for the G20 in 2014 doesn’t really count. In the two years that have gone by, ‘Jokowi’ the ‘People’s President’ has travelled around the world as Chief Salesman, inviting one and all to invest in his country. The problems of the 4th-largest nation and the 17th-largest economy are opportunities for others to exploit, for the mutual benefit of all. From old Agriculture to new Tourism, every sector of Indonesia’s economy presents problems and consequently, opportunities. At the top of the list is the crucial need for Infrastructure.

The bad news: There are probably more Australian companies planning to leave Indonesia today than there are intending to engage. The global slowdown of the resources sector and Indonesia’s focus on value addition is seeing some of our companies withdraw. While we work to re-engineer our own economy and look to new horizons, many of our phobias coalesce to exclude Indonesia from our explorations. There are of course a handful of exceptions, but they prove the rule. Indonesia is just “too hard” for too many of us.

All things considered, introspection will lead to one simple conclusion: We have an unintelligent relationship with our nearest neighbour. Regardless of the extremists on the fringe, the occasional blast of the megaphone, both sides of politics see the relationship with Indonesia as vital to peace and prosperity. Seen through any lens – regional security, bio-security, the environment, the economy – logic says we should use the complementary nature of the two economies to forge partnerships for mutual gain. We could learn from our forces in uniform, their enduring relationships not often open to the public gaze. If ever there was an opportunity to do good and make money, Indonesia is it. Yet we remain uncommitted, happy to export but shy to invest. Contrary to the periodic hype and the occasional photo op, the bilateral relationship is at best awkward. The business ties today leave much to be desired, and that’s putting it mildly.

It is against that backdrop that President Jokowi will come to Australia. He will come with the hope of changing the relationship, from transactional to partnership. At AIBC, we fear he will be disappointed. Captains of industry will pull in favours and seek private audiences, but few will surprise the visitor with a new project, a new joint venture, a new investment. Any effort by the politicians to compensate with yet another announcement of an ‘institute’ or a ‘grant’ will be treated with disdain.  Over the decades, our propensity for ‘research’ has become code for ‘stalling’ in Indonesia. If we haven’t got that message yet it’s because our skills in understanding Javanese are limited.

There is a glimmer of hope. The AIBC-led Infrastructure Initiative is poised for an announcement. In fact, two announcements. One will emerge from Sydney, the other from Perth. Two major maritime infrastructure projects - one in Banten near Jakarta and the other in West Kalimantan near Pontianak - have been selected from a long list. It’s taken a year of discussions, site visits and relationship-building to get to first base. Core teams comprising some of our best names in business, from the two corners of our country, will in days from now take the necessary steps required to move the projects forward. In time, our SMEs will be invited to join in the development. That is the ambition, a seachange, pun intended. I would be delighted to hear from anyone reading this column who may also be interested.

These moves now underway herald the inaugural Australia Indonesia Business Week in Perth, November 11-15. A partnership of the Indonesian Embassy and AIBC, the week will see more Ministers, more Governors, more businesses and more bureaucrats from Indonesia than perhaps ever assembled in any Australian city. Day 1 is the Business Summit, led by the Indonesian Embassy and supported by IIPC and AIBC. Cabinet Ministers, Governors of Provinces, CEOs of companies and senior officials will talk all morning about opportunities for Australian business. Six sectoral roundtable discussions with take place in the afternoon, focused on key industries.  This will be followed by the Indonesia Fair over the November 12-13 weekend, a cultural extravaganza assembled by the Indonesian Embassy from all over the archipelago. Expect a weekend of fun, food, fashion…and shopping! Over 50 small businesses will be showing off their wares in the Perth Exhibition and Convention Centre.


To cap the Week, the AIBC Conference starts with the Welcome Dinner on Sunday November 13. The biennial event in tandem with sister organization IABC, will host a stellar list of speakers from across business, politics and academia. Nothing of this magnitude has ever been attempted before by the Council. I am pleased to inform you that all speakers and moderators have confirmed their participation, with the exception of some Cabinet Ministers from both countries. This is understandable, with diaries kept fluid to accommodate any last-minute changes to the visiting President’s itinerary. If you haven’t signed up, I suggest you hurry up. This is not an event to be missed, if Indonesia is of any interest.  This is the year of the IA CEPA negotiations and pertinent views and opinions will be discussed. It is the over-arching theme of the AIBC Conference.  You can add your voice to the deliberations.



The IA CEPA was also the backdrop to the AIBC Annual General Meeting, held in Canberra on September 15. Following the AGM, members of the AIBC Board assembled from across our country were privileged to listen to DFAT’s First Assistant Secretary Allaster Cox, Lead Negotiator Frances Lisson and Ambassador Nadjib Riphat Kesoema, in order of appearance. The IA CEPA was the common thread. The advice to AIBC from each of the speakers was received warmly, energizing and refocusing your Board to the priorities set by each.

Indonesia’s Ambassador, H.E. Nadjib Riphat Kesoema, Frances Lisson, Lead Negotiator and her Team, Irwan Sinaga, Economic Counsellor and AIBC Board Members.

To read the 2016 National President's Report, please click here. The Minutes of the 2016 AIBC National AGM can be seen here.

The dialogue will continue in Perth. Come join us! Together, we can start changing the relationship with our neighbour.

Warm regards,
Debnath

AIBC Biennial Conference: Perth, November 13-15 2016

Hosted at Crown Perth, one of Western Australia's premier tourist attractions and entertainment precincts, the AIBC 2016 National Conference is designed as an integral part of AIBW, a multi-faceted collaborative event not to be missed.

Please click on the following Crown Hotel links to take advantage of discounted Accommodation which has been arranged for attending Delegates at Crown Metropol and Crown Promenade.

The Opportunity:

No two neighbours are perhaps so different. And no two neighbours are perhaps so compatible as business partners…potentially. In the main, the skills and resources of the two countries are complementary, not competitive. The problems of one are opportunities for the other. Together, they can create a new force for good, creating new jobs, new wealth…simply by taking advantage of each other’s strengths and weaknesses. Australia has the opportunity to use Indonesia’s large domestic market and large workforce. Indonesia has the opportunity to use Australian expertise to address the spectrum of developmental goals. Together, they can work the ASEAN market, the Asian market, the Indian Ocean Rim and the global market.

We are confident you will enjoy the experience. Come take a closer look at what’s in store by clicking here for the detailed agenda.

To register as a participant, please click here for more details.

To take advantage of this unique event as a sponsor, please click here for more details.

Northern Territory Update

AIBC NT continues to take shape after convening our AGM where Eddie Morgan was ratified as Chair of the NT chapter. Linda Reeves stepped down as VC to allow herself more time in other pursuits but will stay on as a committee member. Linda is highly valued for her passion in business and her amazing networking abilities and we are pleased she will continue to support us in developing the AIBC chapter.

Tony Copley has taken up the position of Vice Chair. Kevin Mulvahil is a welcome new committee member. Kevin has a long background in working in the Indonesian / Australian interface and at the moment works in the livestock export industry out of Darwin.

NT has recently had an election which saw the entrance of a new Labour Party. AIBC is working to meet the Chief Minister and the relevant minister for Business.

We attended the second Indonesian consulate / AIBC monthly breakfast meeting hosted by Pak Andre Siregar at the Wisma. A group of some 25 people attended and enjoyed the hospitality of Pak Andre and his team.

A cross section of people from business and Government were represented. As well as emphasising the importance of working together, Pak Andre announced the beginning of a Garuda trial flight from Darwin to Saumlaki in the West Maluku Tenggara Regency which will support the Inpex gas project there. Other messages also included the work being done between high level government parties after Jokowi’s directive to make the cattle trade between the two countries more predictable.

Breakfast meeting at Wisma Indonesia NT

From left ; Tillie Morgan (PT Antara Negera Desain) , Eddie Morgan (AIBC NT Chair) , Consul Pak Andre Siregar , Ibu Woro Sawitri Soedewo , Scott Perkins (Quadrant) , Stewart Kemp (Northern Territory Livestock Exporters Association )
 

AIBC NT held their AGM on 30th August 2016.  Please click here to view the Minutes.


Eddie Morgan,
Chairman-Australia Indonesia Business Council (AIBC) NT NTChair@aibc.com.au

Queensland Update

Federal Business Mission & Market Update

The Australia Indonesia Business Council (AIBC) in conjunction with the Australia Indonesia Youth Association (AIYA) will present their report following a review of the impact and outcomes of the 2015 Australian Business Mission to Indonesia led by the Hon Andrew Robb, specifically in regards to Queensland businesses.

Our special guest, Queensland's Trade & Investment Commissioner to Indonesia, Oka Simanjuntak, will follow-on from this report with a presentation on recommended next steps for Queensland business and related opportunities in the current Indonesian market.

Registrations close on 07 October 2016.  Places are limited, therefore please click here to register for this event.

Annual IndOz Business Networking Dinner

The Australia Indonesia Business Council (AIBC) in Queensland were delighted to host the annual IndOz Business Networking Dinner at Brisbane City Hall. With over 160 guests from across industry, government and the community, the dinner was an opportunity for those with a vested interest in the bilateral relationship between Australia and Indonesia to meet and network.

Among those VIPs in attendance were his Excellency Nadjib Riphat Kesoema, Indonesia's Ambassador to Australia; Adella Raung, Deputy Director, Indonesian Ministry of Tourism; Jennifer Howard, Queensland Deputy Premier’s Assistant Minister for Local Government; Councillor Kim Marx representing the Lord Mayor of Brisbane; Hidehiro Hosaka, Consul General of Japan; Professor Alastair McEwan, Pro-Vice Chancellor (Research), University of Queensland, Alison Carrington, State Director, DFAT; and Cheryl Stanilewicz, State Director, Austrade.

Being always a huge affair in Brisbane, the Lord Mayor of Brisbane, the Hon Graham Quirk, had the Town Hall lit up in red and white colours on the night to mark the evening's gala event as well as to celebrate Indonesia's Independence Day on the 17th. The evening was supplemented with a variety of performances which included the highly acclaimed and colourful Malang Carnival which was performed by dancers especially sent by the Indonesian Ministry of Tourism. In his keynote address, the Indonesian Ambassador personally spoke of his support and admiration of what is quickly becoming a key feature in Brisbane's international business and cultural calendar.

AIBC QLD held their AGM on 12th August 2016.  Please click here to view the Minutes.

Kathleen Turner,
Chairman-Australia Indonesia Business Council (AIBC) QLD
QLDChair@aibc.com.au

ACT Update

AIBC ACT held their AGM on 31st August 2016.  Please click here to view the Minutes.

Tony Mitchener
Chairman - Australia Indonesia Business Council (AIBC) ACT
ACTChair@aibc.com.au
 

Tasmanian Update

AIBC TAS held their inaugural AGM on 19th July 2016.  Please click here to view the Minutes.
 

Richard Lowrie,
Chairman-Australia Indonesia Business Council (AIBC) TAS
TASChair@aibc.com.au

Victorian Update

Indonesia’s Growing Appetite for Victorian Food

The Victorian Government recently welcomed to Victoria 23 Indonesian delegates, representing 15 major Indonesian food buyers, to participate in the 2016 Food and Beverage Trade Week (FBTW). Now in its fourth year, FBTW is a major inbound mission for the food industry which seeks to connect qualified international buyers with export ready food producers from Victoria.

This year, FBTW ran from Wednesday 14 September - Friday 16 September, to coincide with Australia’s leading food trade show, the Fine Foods Trade Exhibition, hosted in Melbourne and featuring more than 100 exporting Victorian companies.   To read the complete article, please click here.
 

Victorian Exporters Discover Indonesia’s Growth Exceeds Expectations.

In August, Victorian Government Minister for Small Business, Innovation and Trade, The Hon. Philip Dalidakis discussed prospects for the Indonesian economy with H.E. Professor Bambang Brodjonegoro. Professor Bambang is Indonesia’s Minister for National Development Planning, reporting directly to Indonesia’s President. He is also Head of Indonesia’s National Development Planning Agency (BAPPENAS), Indonesia’s Presidential think tank, charged with translating the programs he conveyed during his presidential campaign into actual policies.

Having served until recently as President Joko Widodo's Minister of Finance, with many years’ distinguished service in the Ministry of Finance and as the Dean of Faculty of Economics at the University of Indonesia, Professor Bambang is a highly-respected expert in macro-economics. So having him address an industry roundtable, co-hosted by the Victorian Government and the University of Melbourne’s Asia Institute, was a remarkable opportunity - in particular given Indonesia's second-quarter (Q2) economic growth beat so many analysts' expectations. 

Business leaders at the event discussed the drivers of Indonesia’s recent performance, including strong domestic household consumption, government spending and investment growth. And Minister Bambang was able to provide an overview of Indonesia’s new monetary policy regime, including the central government’s Tax Amnesty Program which is expected to generate significant capital inflows, boosting bank lending and driving continued strong growth.

This was welcome news for Victorian exporters, particularly given the growing appetite in Indonesia for our high quality food, and the country’s growing need for vocational education and infrastructure development.

For more information on Victorian Government initiatives to connect the State's businesses to opportunities in Southeast Asia, please contact Amelia Fyfield, Regional Specialist ASEAN amelia.fyfield@ecodev.vic.gov.au.
 

AIBC VIC held their AGM on 16th August 2016.  Please click here to view the Minutes.
 

Murli Thadani,
Chairman-Australia Indonesia Business Council (AIBC) VIC
VICChair@aibc.com.au

South Australia Update

On Monday 26 September AIBC South Australia held a premier event “The Indonesia Food Sector and Food Security” which explored the changing patterns in Indonesian food purchase behaviour; specific problems such as food loss and waste, and the role the meat and livestock trade will play between Australia and Indonesia.

The Indonesian Consul General for South Australia Pak Yayan Mulyana was in attendance as well as 50 other industry representatives from the South Australian food sector, including small business, large exporters and government.

I would like to thank PwC for providing their facilities and the catering service and being such generous hosts. As national corporate members their support is warmly appreciated.
Our speakers were:

Professor Wendy Umberger, Executive Director of the Centre for Global Food and Resources (GFAR) at the University of Adelaide. Wendy presented and unpacked for the audience her recent research about the drivers of consumer and producer behaviour in Indonesia and the implications of changing behaviours as a result of urbanisation, modern retail transformation and consumption patterns. Questions from the audience delved into the demand for safety and quality assurances and how and where consumers shop for food and food-related services. We looked at increasing modern retail penetration in both urban and rural areas through hypermarkets, supermarkets, mini-markets and the trend in Indonesian consumer behaviour to focus on health and convenience attributes in food.

Our second speaker was Steve Lapidge, Director of Science Partnerships at SARDI, PIRSA’s research and development division. Steve presented his research on the contrasting challenges for food security in Australia and Indonesia and some of the more specific problems such as food loss and waste and the vital role that Australia can play in regional food security. Questions from the audience explored some of the contrasting food security challenges between Australia and Indonesia, such as infrastructure and cold chain logistics, diet diversification and increasing protein quality, reducing food loss on farm and post-farm gate, and in Indonesia increasing public expenditure on R&D.

Our third speaker was Jack Gleeson, Co-Founder of Magnetic Alliance. Jack was responsible for creating and managing the largest and first fully integrated Global Meat and Livestock supply chain with Elders Ltd and has over 30 years of experience in Agribusiness. Jack unpacked for the audience why the Australian Supply Chain is the most cost effective in cattle production, and how the Indonesian Supply Chain is the most cost effective in value adding & conversion to finished product for cattle. Questions from the audience highlighted the serious decline in local Indonesian cattle populations and what this meant for local production and Government of Indonesia targets of self-sufficiency and the complimentary competitive advantage that the meat and livestock trade will play in the relationship between Australia and Indonesia.

All presentations have kindly been made available by the speakers and are uploaded to the Members Only page on the AIBC Website.

Future of Food Speakers and Moderators

Jack Gleeson addressing the Audience

Wendy Umberger presenting to the Audience

AIBC SA held their AGM on 16th August 2016.  Please click here to view the Minutes.
 

Steven Baker,
Chairman-Australia Indonesia Business Council (AIBC) SA
SAChair@aibc.com.au

Western Australia Update

AIBC WA held their AGM on 31st August 2016.  Please click here to view the Minutes.

WA Committee
WAChair@aibc.com.au

Indoview

2016 ASPIRE AWARDS

PwC’s Private Clients’ are delighted to partner with The Australian Financial Review for the 2016 Aspire Awards. This is the second year we are involved with these iconic awards, which recognise the best of Australia’s private and family business.

There are seven award categories, covering the diverse range of innovation and value that private and family businesses deliver to the Australian economy. One of our key awards celebrates the success of private businesses operating across Asian markets. The Asian Success Award highlights business that have built, and are benefitting from the strong business relationships they have developed across Asia. This could include importing, exporting, and joint ventures within the region.

Last year’s winner was the Craig Mostyn Group, who have cornered 60% of the pork market in Singapore with their winning export strategy. Liquid Snow Tours were also highlighted for their success operating ski and snowboarding tours throughout Japan.

If you, or someone you know has a great story to share, visit PwC's website to learn more about the awards or to submit your entry. Entries close September 30. Good luck.
 

Brexit: What does it mean for Indonesia?

The recent decision by the United Kingdom (UK) to exit the European Union (EU) (commonly referred to as ‘Brexit’) took the world by shock, and created a dramatic and immediate ripple effect across the globe. In this article, we briefly cover why we consider that the Brexit decision should only have a limited effect on direct trade relations between the UK and Indonesia, while noting that the indirect effects of the decision – those that pertain more to the world as a whole - still have the potential to cause disruption to both the British and Indonesian economies. Click here to read the full article.

Indonesia and the revolution in Asian energy markets

China has made remarkable advances in the global effort to mitigate climate change, through reducing its huge reliance on coal and improving overall energy efficiency. But a broader look across the Asian region offers a much more mixed picture of the decarbonisation of energy production. Click here to read the full article.

Trade Expo 2016 Indonesia

The 31st Trade Expo Indonesia 2016 is set to open on 12 - 16 October 2016. Following its previous shows, Trade Expo Indonesia 2016 will showcase best Indonesian export products ranging from industrial, mining, agricultural to Craft sectors. Click here to find more information about the Expo.

Australian companies risk missing ASEAN opportunity

Australian companies need to change their mindset if they are to capitalise on the significant opportunities offered by the fast-growing ASEAN market, according to a new report from HSBC Australia and the Export Council of Australia. Click here to read the full report.


Indonesia Ends Oil Exploration Taxes in Bid to Revive Investment

Indonesia said on Thursday (22/09) it will eliminate taxes on oil and gas exploration this week in an effort to bolster investment in the country's flagging oil and gas sector. Oil and gas director general Wiratmaja puja said the government was aiming to remove all taxes on exploration, including a value-added tax on imported goods and a land tax that had been a deterrent to investment since it was introduced in 2010. Click here to read the full article.

IA-CEPA BPG Submissions

The Government accords high priority to the views and expertise of all stakeholders with interests in Australia’s commercial relationship with Indonesia. As part of the process of determining positions for the negotiations, the Department of Foreign Affairs and Trade (DFAT) is inviting further public submissions. In particular, information is sought on specific interests and issues in relation to Australia’s trade, investment and economic cooperation with Indonesia, including barriers to trade and investment faced by Australian goods and services exporters and investors in Indonesia as well as experiences with economic cooperation activities.
 
Parties who have previously made submissions on IA-CEPA are encouraged to review and update their proposals to reflect any developments.
 
Interested parties are invited to lodge their submission as soon as possible. Submissions may be lodged electronically to
ia-cepa@dfat.gov.au or by post to:
 
Free Trade Agreement Division
Department of Foreign Affairs and Trade
RG Casey Building
John McEwen Crescent
BARTON ACT 0221
 
All submissions will be made publicly available on the DFAT website unless the author specifies otherwise. More background information can be found on the DFAT website by clicking here.