CATHERINE MCGRATH, REPORTER: Near neighbours and close friends, the talks spanned defence cooperation and trade. To the asylum seeker issue along with the problem of Indonesian minors in Australian prisons who are caught up in the asylum debate.
JULIA GILLARD, AUSTRALIAN PRIME MINISTER: It's a very great honour for us to welcome you to Australia and particularly to Darwin.
Mr President, we have a very strong interest in each other's prosperity and I've appreciated our discussion on how we can work together to strengthen the prosperity of both of our nations.
SUSILO BAMBANG YUDHOYONO, INDONESIAN PRESIDENT: Thank you.
CATHERINE MCGRATH: There was much to discuss and some healing required. On the issue of the live export beef trade, suspended by Australia last year, now there's a promise of Australian support for the Indonesian industry.
SUSILO BAMBANG YUDHOYONO (translation): For the medium to long-term we could consider cooperation in the field of investment and in cattle and beef in Indonesia, which no doubt will bring benefit, real benefit, for both our countries.
CATHERINE MCGRATH: Darwin is the city that hosts the US Marines now on training rotation in Australia. It's been a sensitive subject but perhaps not any more.
ANDREW MACINTYRE, AUSTRALIAN NATIONAL UNIVERSITY: I think Indonesia is signalling between the lines that it's comfortable with what's going on. This meeting would not have taken place in Darwin if the president was uncomfortable with the cooperation that's emerging between the United States and Australia.
CATHERINE MCGRATH: And the hope from the Australian side is for more defence cooperation.
Defence Minister Stephen Smith has signalled plan something under way for three-way Indonesian, Australian, US defence exercises early in 2013 and that China has been asked to send an observer.
ANDREW MACINTYRE: If that comes to pass, that's a significant development. That shows Indonesia wanting to engage in a more strategic way in regional defence planning.
CATHERINE MCGRATH: The handover of four C130s is an important step in defence cooperation and president Yudhoyono indicated they would be put quickly to use.
SUSILO BAMBANG YUDHOYONO (translation): I wish to say thank you for the transfer of the Hercules C130 which was signed yesterday by both our defence ministers. And also these aeroplanes will be very important for Indonesia to develop and implement its role in humanitarian issues and missions and also emergency missions in national disasters.
CATHERINE MCGRATH: Two years ago when Kevin Rudd was Prime Minister, president Yudhoyono addressed the Australian Parliament and called on Australians to update their image of their northern neighbour.
SUSILO BAMBANG YUDHOYONO: The most persistent problem in our relation is the persistence of age old stereotypes, misleading, simplistic caricatures that debases the other side in a bad light.
CATHERINE MCGRATH: That visit resulted in a pledge for the leaders to meet annually, and Prime Minister Gillard and president Yudhoyono have met also at meetings like the G20.
But according to Indonesian expert, professor Andrew MacIntyre, bilateral images need further updating.
ANDREW MACINTYRE: It's interesting to see the main thing that's been picked up in the visit so far is the gift by Australia of the four C130s, this traditional notion of Australia giving things to help poor Indonesia.
That's true but it doesn't capture the deeper reality. The deeper reality is Australia needs Indonesia's cooperation. We need it for defence purposes, we need it for managing the flows of people, and we need it for economic purposes.
CATHERINE MCGRATH: Indonesia's a huge and growing economy. It got through the Global Financial Crisis and it wants more Australian investment. Australia is currently the 14th largest investor in Indonesia. President Yudhoyono wants it to move into the top 10.
SUSILO BAMBANG YUDHOYONO: Make Indonesia your hub for production and innovation, having plants, factories and business centres in Indonesia will opener bigger market for your businesses.
CATHERINE MCGRATH: On asylum seekers and people smuggling both sides pledged support for the Bali process. And Indonesia wants more young crew members picked up on asylum boats released from Australian prisons.
SUSILO BAMBANG YUDHOYONO (translation): We hope that the repatriation of the remaining underage seafarers can be accelerated.
CATHERINE MCGRATH: Indonesia wants another 54 young people released from jail.