New Zealand’s little known partner

Indonesia is New Zealand’s nearest Asian neighbour, the world’s fourth most populous country, and has a rapidly growing economy. But a new Asia New Zealand Foundation (Asia:NZ) report highlights the gap between its significance to New Zealand and our engagement with it.

In the report Indonesia and its Significance for New Zealand, author Frank Wilson writes that Indonesia has a positive outlook for sustained economic growth; a rapidly growing middle class; and a crop-based agricultural sector that is complementary to – rather than competitive with – New Zealand’s.

But Indonesia is “very foreign” to most New Zealanders. “As New Zealand’s nearest neighbour in Asia, Indonesia is surprisingly little known by most New Zealanders.” Awareness of New Zealand is also low in Indonesia.

People-to-people links between the two countries are weak. “Levels of tourism and education exchanges are under-developed relative to other comparable Asian countries. The Indonesian community in New Zealand is small and Indonesian studies programmes are non-existent.”

Indonesia is among New Zealand’s top 10 trading partners. Frank writes that bilateral trade in primary products is expected to grow, and trade in services such as tourism, education, engineering, consulting and IT is also “ripe for attention and expansion”.

“There seems to be such a natural complementary between our economy and the Indonesian economy, which is certainly agriculture – but cereals, rice and so on – and minerals.

“In the traditional areas of trade there are obviously tremendous opportunities, as well as new areas.”

Asia:NZ’s director of policy and research Dr Andrew Butcher says a quick succession of announcements made in recent months show Indonesia’s growing significance to New Zealand.

In February, Air New Zealand announced the introduction of direct flights between Auckland and Bali, starting later this month. During his visit to Jakarta in April, Prime Minister John Key announced four cooperation agreements with Indonesia covering agriculture, environment, labour and geothermal energy. He also announced New Zealand would be appointing a new trade commissioner to the region.

“These are good steps in the right direction,” Andrew says. “But there is more to be done. Our interest in Indonesia should not be limited to its benefit to New Zealand’s trade.

“Indonesia is a key regional player in groupings like ASEAN and the G20. New Zealand needs to pay attention to what Indonesia is doing in the region, particularly at a time of shifting power balances.

“This has to be a two-way relationship. While New Zealand needs to see that Indonesia is indeed a significant partner, it also needs to offer its own valuable contributions to Indonesia and to the region.”