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Domestic issues test relations between Australia and Indonesia
The relationship between Australia and Indonesia is increasingly important, but often tested as a result of differing domestic priorities and expectations.

While trade and business links are strong, there's disagreement over issues such as East Timor, asylum seekers and beef exports.

Political editor Catherine McGrath reports.
JIM MIDDLETON, PRESENTER: After decades of difficult relations, the governments of Australia and Indonesia are now on a much firmer footing.

However, real tensions do remain as a result of differing domestic priorities and expectations.

But with a past that includes disagreement over East Timor and the ongoing debate over issues like asylum seekers and beef exports, the relationship remains complex.

In a moment, Indonesia's vice-president Boediono

But first, political editor Catherine McGrath explores the state of the bilateral relationship.

CATHERINE MCGRATH, REPORTER: For average Australians, Indonesia is often seen through the prism of the asylum seeker issue and as a holiday destination.

AUSTRALIAN WOMAN: Third world, and Bali (laughs).

AUSTRALIAN WOMAN 2: The main thing on the political scheme isn't it with Indonesia are the boats coming across.

AUSTRALIAN MAN: A dominant government over there their people, and I think the Australian Government treats them with a lot of sensitivity.

CATHERINE MCGRATH: But there's a lot more to the relationship than that. This week in Melbourne, former Australian ambassador to Indonesia, Bill Farmer, told an international affairs audience Australia had better take close notice of Indonesia or be left behind.

BILL FARMER, FORMER AMBASSADOR TO INDONESIA: So here it is on our doorstep, the world's fourth largest country, the world's largest Muslim population, the world's third largest democracy, a country of enormous strategic importance to Australia, a looming economic power.

No wonder it gets our attention.

But the bigger question, though, is really how we can continue to get Indonesia's attention.

CATHERINE MCGRATH: The leaders of Indonesia and Australia, who have worked together for decades, through the Whitlam years, through to John Howard's 11 years in power and since 2007 with Kevin Rudd as PM and then Julia Gillard.

Australian leaders have insisted that the Indonesian relationship is an important one. Prime Minister Gillard made Jakarta a top priority and her initial journey there as Prime Minister was in 2010.

JULIA GILLARD, AUSTRALIAN PRIME MINISTER (2010): I determined to travel to Indonesia early during my prime ministership because of the importance of this relationship to Australia.

CATHERINE MCGRATH: Three years ago, Indonesian president Susilo Bambang Yudhoyono became the first Indonesian leader to address the Australian Parliament.

SUSILO BAMBANG YUDHOYONO, INDONESIAN PRESIDENT (Speaking in Australian Parliament, 2010): I am great greatly honour and privileged to be given this rare opportunity to address this awe gust chamber.

CATHERINE MCGRATH: But the president also had a message for Australia in 2010: please update your image of Indonesia.

SUSILO BAMBANG YUDHOYONO (speaking in Australian Parliament, 2010): There are Australians who still see Indonesia as an authoritarian country or as a military dictatorship.

PROFESSOR GREG BARTON, MONASH UNIVERSITY: The average Australian, the average Indonesian doesn't really understand their counterpart. So there is a sense of working with a mental picture which is 15 years out of date.

CATHERINE MCGRATH: The modern relationship is dynamic. Trade and business links are strong, two way trade stands at $11 billion, Australian investment is nearly $7 billion. Indonesia is Australia's greatest recipient of international development aid, the two police forces have worked together since the Bali bombers. On asylum seekers, Australia and Indonesia are co-chairs of the regional response known as the Bali Process.

Indonesia's economy is booming and it sees itself as a future significant global power.

On one level, ties between two countries are strong and growing but there are some ongoing irritants in the bilateral relationship, specifically the live beef exports controversy tested the friendship and created strains between the two governments.

BILL FARMER: In 2011, with the flimsiest fig leaf of consultation, our government announced the suspension of the live cattle trade to Indonesia.

This ill conceived decision adversely affected Australian trading interests and the livelihood of thousands of Australian families. It undermined Australia's claims to be a reliable food supply for the huge Indonesian populace. It played into the hands of elements in Indonesia hostile to our commercial interests and it caused political difficulties for the Indonesian government.

I think 10 out of 10 as a case study in how not to deal with Indonesia.

CATHERINE MCGRATH: Tensions on that issue remain.

PROFESSOR GREG FEALY, AUSTRALIAN NATIONAL UNIVERSITY: We only need to look at things like live cattle exports, boat people, Australians on trial in Indonesia, to see the way in which Australian politicians are shaping their responses based as much, if not more on what the Australian electorate is thinking about these matters rather than what might necessarily be best for the bilateral relationship.

CATHERINE MCGRATH: In 2013, like it has in recent years, the asylum seeker issue plays a big part in the Indonesian Australian relationship.

PROFESSOR GREG BARTON: The obvious elephant in the room is the question of asylum seekers coming by boat. The fact that in Australia we have this conversation amongst ourselves as if no one’s listening and as if the problem was our problem and not everyone else's problem. The reason that people travel by boat to South East Asia and certainly try and leave South East Asia by boat to come to Australia is the hope of getting asylum in Australia. They don't go to Indonesia because they think it's a good place to settle long term.

CATHERINE MCGRATH: Currently, Indonesia deals with the Australian Government on asylum seekers with mixed success. If there's a change in government, it will be a different dynamic altogether.

Opposition Leader Tony Abbott is campaigning strongly on the asylum seeker issue, saying if elected he would stop the boats. His plan is to turn vessels around where it's safe to do so, even though that plan has been publicly rejected many times by the Indonesian government.


CATHERINE MCGRATH: Tony Abbott says he can and will work with Indonesia.

TONY ABBOTT: The Howard government faced a very serious problem in 2000 and 2001, but by 2002 the boats had been stopped.

CATHERINE MCGRATH: With elections due in both countries, there are plenty of challenges ahead.
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