Australia and Indonesia: A tense but pragmatic relationship

http://www.bbc.co.uk/news/world-australia-33144739

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In the wake of last week's allegations that the Australian government paid people smugglers to return asylum seekers to Indonesia, the relationship between the two countries is once again under strain.

If media headlines were the only barometer, it might appear ever thus.

Over the years, the execution of Australian drug traffickers, territorial breaches of Indonesian waters by the Australian Navy, spying revelations and the cruel treatment by Indonesia of live cattle imported from Australia have hit the headlines in both countries.

But a closer look at the links between Indonesia and Australia tells a more complicated story - one involving billions of dollars worth of two-way trade and tourism, co-operation on counter-terrorism and people smuggling, and strong educational and cultural links.

For all the political bluster emanating from Canberra and Jakarta, the two countries need each other. With a population of 253 million (to Australia's 23.5 million), Indonesia is Australia's nearest major neighbour, and its status as the world's largest Muslim population is an important consideration for Australia's counter-terrorism strategies.

It's no surprise then that Australia's Department of Foreign Affairs and Trade (DFAT) describes the relationship with Indonesia as "one of Australia's most important".

Travel

The Indonesian island of Bali is a major tourist destination for Australians, with as many as one million visiting the island every year, according to the Bali Tourism Board.

It is not a two-way trade but Indonesia's growing middle class of about 50 million people represents a major opportunity for Australian tourism.

Australia's very high visa charges for Indonesians - about A$564 ($438, £280) for a family of four compared with A$100 for an Australian family going to Bali - doesn't help.

Trade

Australia's two-way trade with Indonesia was worth A$14.9bn in 2013, according to DFAT, making Indonesia Australia's 12th-largest trade partner.

Most of that was in goods including wheat, sugar, cotton and aluminium.

Despite controversy around Australia's live cattle exports, Indonesia remains Australia's key market in that sector.

Trade in services is growing - almost A$3.7bn in 2013 - with Australia exporting education and importing travel services.

Bilateral relations

The two countries elevated their relationship to a "strategic partnership" in 2010.

There is a treaty-level framework for addressing traditional and non-traditional security challenges and intelligence sharing, while a Defence Cooperation Arrangement was signed in 2012.

Counter terrorism

This week, experts warned that if the boat people bribery scandal was true, Indonesia might become reluctant to continue cracking down on criminal networks smuggling asylum seekers to Australia via Indonesia.

Currently, Australian and Indonesia agencies work together in law enforcement, criminal justice, transport and border security, intelligence, and the security of chemical, biological, radiological, nuclear and explosive materials.

Political visits

Prime Minister Tony Abbott has made three official visits to Indonesia since he entered office in September 2013.

Former President Yudhoyono visited Australia four times during his presidency, more than any of his predecessors.

In 2010, he was accorded the honour of addressing a joint sitting of Parliament - the first by any visiting Indonesian.

Mr Abbott attended the inauguration of President Joko Widodo in October 2014 and President Widodo attended the G20 Leaders' Meeting in Brisbane a month later.

But relations became strained in April when the Indonesian leader ignored pleas from Australia to grant clemency to convicted drug traffickers Andrew Chan and Myuran Sukumaran.

Foreign aid

Much has been made of a 40% cut in foreign aid to Indonesia in Australia's most recent budget (down to A$323m) but that came along with a broader aid cut and the government has argued poorer countries needed the assistance more than Indonesia.

Education has been a key target for aid in recent years, fostering a broader relationship that has led to a flow of Indonesian students to Australian universities o the one side, and Australian graduates gaining experience in Indonesia.