Australian leader's visit affirms deeper ties to Indonesia

Australian Prime Minister Anthony Albanese on Monday looked to move beyond regional issues that have been a key part of his trips abroad by promoting the importance of building stronger economic ties with neighboring Indonesia.

The visit was only Albanese's second overseas trip since his inauguration two weeks ago and underscores the importance that Australia places on its sometimes fractious relationship with Indonesia, its closest major neighbor.

Albanese talked about the importance of expanding the two countries' trade and investment relationship, highlighting their ambition to better utilize the Indonesia-Australia Comprehensive Economic Partnership Agreement. They also discussed Australia’s proposed $200 million climate and infrastructure fund with Indonesia.

After meeting with Widodo, Albanese said in a joint news conference that Indonesia is on track to be one of the world's five largest economies.

“Realizing our investment relationship is a priority for my government," Albanese said, “and it’s why we plan to work with Indonesia to realize the potential of the Indonesia Australia Comprehensive Economic Partnership Agreement.”

He also offered Australian assistance to help with the design and construction of Indonesia’s capital — which is being relocated from Jakarta to the island of Borneo — and pledged to deliver an additional $470 million within four years to support bilateral and regional development assistance programs in Southeast Asia.

But he did not bring up the thorny issue in which his Indonesian counterpart President Joko Widodo at a virtual meeting with leaders of the Association of Southeast Asian Nations last October expressed concern after Australia, the United Kingdom and the United States announced a trilateral security agreement, dubbed AUKUS, under which Australia would acquire nuclear-powered submarines. Widodo said the deal could spark an arms race.

Some ASEAN nations fear the pact could escalate tensions in hot spots such as the South China Sea. The U.S. nuclear submarine deal with Australia and the U.K. has also angered China, which claims most of the disputed South China Sea and warned the pact would threaten regional stability.

Quad group countries Australia, Japan, the U.S., and India said in March that they opposed any unilateral use of force to change the status quo in their region as Russia’s invasion of Ukraine brought renewed concerns over China’s assertiveness in the Indo-Pacific.

Asked if AUKUS would be discussed during Albanese’s visit, Santo Darmosumarto, director of East Asia and Pacific Affairs for Indonesia's Foreign Ministry, said the country is aiming to diversify its relationship with Australia by focusing on different topics than those raised previously.

Previously focused on defense and security, Darmosumarto said in a briefing ahead of the visit that his government recognizes the range of its partnership with Australia, including economic cooperation and people-to-people relations, which “appear to dominate cooperation between the two countries.”

“IA-CEPA, which came into force in 2020, had not been implemented effectively due to the COVID-19 pandemic despite trade between the countries increasing by around 70% last year,” Darmosumarto said.

Albanese arrived in Jakarta on Sunday and is accompanied on the three-day trip by Foreign Minister Penny Wong, Trade Minister Don Farrell, Industry Minister Ed Husic and several business leaders.

Indonesia is the chair of the Group of 20 biggest economies this year and ASEAN next year. Albanese said he will attend the G-20 summit in November in Bali. People questioned whether he would after Russian President Vladimir Putin announced he will be in attendance.

“I did so because the work of G-20 is critical at this time of global economic uncertainty,” Albanese said. “I will work closely with President Widodo to help deliver a successful summit.”

During the visit, Albanese is scheduled to meet with ASEAN Secretary General Lim Jock Hoi on Monday to discuss Australia’s commitment to Southeast Asia and ASEAN centrality. Before returning to Canberra on Tuesday, Albanese plans to visit Makassar, the capital city of Indonesia's South Sulawesi province.

Although Indonesia, a vast archipelago nation of 270 million people, is often presented as one of Australia’s most important neighbors and strategic allies, the relationship has undergone various ups and downs. Recent disagreements around key issues include allegations of wiretapping by Australian Signals Directorate to monitor the private phone calls of then-Indonesian President Susilo Bambang Yudhoyono, his wife and other senior officials, Indonesia's use of capital punishment on Australian drug smugglers, and cases of people smuggling.