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Trade with Indonesia vital for Australia

“Our relationship with Indonesia has survived the Bali bombings and tensions over boat arrivals. It will survive the executions. Despite our horror, it should do so for the Indonesian people’s sake,” says UNSW Business School’s Tim Harcourt.

Published on the 29 Apr 2015

“Our relationship with Indonesia has survived the Bali bombings and tensions over boat arrivals. It will survive the executions. Despite our horror, it should do so for the Indonesian people’s sake,” says UNSW Business School’s Tim Harcourt. "Indonesia is a huge trade partner for Australia. It is important that Australia strongly condemns these abhorrent executions. However we must also ensure that the Indonesian people are not economically disadvantaged by action we take to protest at action taken by their government and judiciary.”


He notes that relations between Indonesia and Australia are expected to suffer now that Australia has withdrawn its ambassador to Indonesia in the wake of the execution of two members of the Bali Nine.

“However many Australian's seem unaware of how trade, jobs and the economy could be put at risk if we rock the boat from Indonesia,” says Tim Harcourt, the J. W. Nevile Fellow in Economics at the UNSW Business School.

Australia has a vital trading relationship with Indonesia. There is $11.1 billion in good trade, and $3.3 billion in services, along with a strong performance in agribusiness, infrastructure, and construction. 

“Don’t forget education professional services, and big firms like ANZ, Comm Bank, Leightons, Orica, plus the TAFE sector. You don't want to turn that boat back to Indonesia," he adds, having travelled extensively in the country.
There are 2584 Australian companies exporting to Indonesia, a number that has remained largely unchanged over the past 5 years despite several diplomatic incidents. There are also 150 Australian companies based in Indonesia despite the archipelago averaging 4-6 per cent growth over the past 10 years.

“Any suspension of aid or trade sanctions would only hurt Indonesian people. Any action should be carefully thought through,” he argues. “After all many Indonesians are against capital punishment themselves, therefore we shouldn’t be punishing the country as a whole. If possible we should avoid direct economic harm to the poorer workers in Indonesia.”
For further comment call Tim Harcourt  02 9385 3816, 0408 485 479,

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