Australian companies cannot afford to miss out on the Indonesian juggernaut
There’s a saying that Indonesia is Australia’s neighbour by geography and its partner by choice.
So, it’s crucial that our Prime Minister, Anthony Albanese, make his first visit after the federal election to Indonesia. It is correct that this visit be both strategic and economic.
In my view, Indonesia is one of the most, if not the most, important strategic economic partners for Australia in a time of great economic turbulence and uncertainty.
Indonesia is projected to be one of the world’s top five economies by 2040 and it will have five times as many households with a disposable income over $US15,000 than Australia.
Its economy is growing at about 5 per cent, with an ambitious plan from Indonesian President Prabowo Subianto to grow to 8 per cent.
There are huge opportunities for Australian companies to invest in Indonesia and for Indonesian companies to invest in Australia, strengthening our cultural, economic and strategic ties.
I am very proud to be Australia’s Business Champion for Indonesia and to promote the importance of doing business in Indonesia and for Indonesian companies to invest in Australia.
There has never been a more important time for Australian companies, large and small, to identify and work through the opportunities that Indonesia presents.
Key growth areas include industries such as agriculture, where the President has a commitment to give free and nutritious meals to 83 million people a day; and in resources such as lithium as Indonesia grows its electric vehicle battery industry.
Indonesia also has strong demand for our information and communications technology and digital services to support the rapid digitisation of its economy; a bold commitment to net-zero emissions by 2060 or sooner; and huge opportunities in energy transition.
Its commitment to education is apparent, with Australian universities welcome to invest, and its health system is modernising as the country’s middle class grows.
Australian companies cannot afford to miss out on this, and this is why Nicholas Moore’s report Invested: Australia’s Southeast Asia Economic Strategy to 2040 is a game changer for our relationship with Southeast Asia. It sets out many ambitious targets.
The two most important anchors for that strategy are Australia’s commitment of substantial resources, including a $2bn Southeast Asia Investment Financing Facility and the creation of specialised deal teams, to help Australian and Indonesian companies find the right pathways and investment channels.
One of my jobs is to break down the perception that it’s too hard to do business in Indonesia.
All jurisdictions have complexities, including ours, but this should not stop Australian companies pursuing the huge economic opportunities that exist in Indonesia.
When I’m in Indonesia, I see many companies from Japan, the US, Europe and around the world investing heavily there.
I don’t want to see Australian companies miss out on these growth opportunities.
At the same time, it’s great to see Australian companies, large and small, really stepping up.
We’ve seen a 30 per cent increase in foreign investment in 2024 and three successful trade and investment missions, including our last one, the largest trade mission of investors to Indonesia.
I see many Australian companies, such as Aspen Medical, leading the charge and investing heavily in Indonesia to seize the opportunities that are before them.
Also, in my role as the chancellor of Western Sydney University, we have proudly set up the first foreign undergraduate campus in Indonesia.
With dedication, the right people and commitment, and the incredible support from our embassy, we broke through the regulatory processes to establish a university from start to finish in two years – a very fast process to establish a university.
So, my message to Australians and Australian companies is a simple one: the Prime Minister is in Jakarta this week because he understands that for Australia to succeed, we must have a successful economic and strategic relationship with Indonesia.
Together, we must complement the ambitions of the Indonesian people and the Indonesian government, because when we grow together, when we complement each other’s mutual interests, our countries and our people will be the better for it.
Jennifer Westacott is the Australian government’s Business Champion for Indonesia.
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