Bolstering Indonesia–Australia Economic Dialogue – OpEd
By Eko NM Saputro*
The 2018 Comprehensive Strategic Partnership (CSP) between Indonesia and Australia expressed a shared commitment to improving bilateral relations. Indonesia and Australia have attempted to boost cooperation by promoting economic dialogue. While the benefits of economic dialogue are obvious, they should also introduce a consultative forum with non-state actors that focuses on economic–financial affairs to enhance inclusiveness.
Historically, Indonesia and Australia have maintained several economic–financial dialogues. In 2007, the High-Level Policy Dialogue (HLPD) was established in response to the global financial crisis. This forum serves as an excellent platform for both countries to discuss mutually relevant economic topics, share policy developments, and contribute to policy frameworks. The HLPD includes not only policymakers but also academics from Indonesia and Australia.
Indonesia and Australia have also held the Economic Policy Dialogue (EPD). The EPD is a forum between the Indonesian Ministry of Finance and the Australian Treasury for discussing financial issues of mutual concern at policy and technical levels. This forum has existed since 2013 and focuses mainly on macroeconomic policies, although various technical topics are also discussed.
In the most recent arrangement, both governments inaugurated the Economic, Trade, and Investment Ministers’ Meeting (ETIMM) on 6 July 2021. It was instituted to fulfil the mandate of the 2020 Annual Leaders’ Meeting to establish senior and ministerial levels meetings to enhance bilateral and global economic cooperation. The ETIMM is expected to translate shared commitments into concrete steps for improving economic relations, identifying potential areas of future cooperation and exchanging views and experiences in responding to global challenges. Before conducting the ETIMM, a Senior Economic Official Meeting (SEOM) was also held in September 2020 to discuss mutual issues.
Indonesia and Australia are keen to increase dialogue on economic and financial matters. These dialogues help build trust by providing opportunities for frank communication and stimulate policy learning and innovation. Both sides also learn about their counterpart’s responses on particular issues.
The dialogues are also a medium for policy coordination between relevant Australian and Indonesian authorities to overcome collective problems. Transnational policy coordination is particularly suitable for developing crisis responses to global economic challenges like COVID-19. With economic interdependence ever-increasing, understanding the overall world economy is critical. More importantly, knowing a neighbouring country’s view on specific issues helps to formulate an understanding of its position and assists in setting a policy response. Clearly, bilateral dialogue maintains its function of promoting cross-border policy coordination.
But current economic dialogues between Indonesia and Australia seem to be officials-heavy forums that lack inclusivity. Except for academics, the participation of non-state actors remains scant. There are still many non-government economic actors that could enhance bilateral relations between the two countries yet remain excluded.
Introducing a consultative forum with non-state actors will capitalise on a wider range of perspectives from diverse economic players. Their inputs, feedback and recommendations are essential to promoting economic relations between Indonesia and Australia. They know the problems on the ground, understand market expectations, and have plenty of fresh ideas. This arrangement will result in a broader perspective that leads to a more comprehensive set of considerations for policymakers.
It may be difficult to encourage the participation of non-state actors in the consultative forum, especially if they see no incentive to join. Therefore, the consultative forum should provide enough room for actors to express their views, no matter how critical. At the same time, non-state actors should make competent and constructive inputs during the dialogue. This will create open discussion, allowing the forum to find the best alternative solutions for challenges faced by economic actors from both countries.
The greater involvement of non-state actors in economic dialogues between Indonesia and Australia does not mean omitting the role of the state in bilateral processes. Officials have an undeniably crucial role, especially in the transformation of national frameworks. Therefore, the participation of non-state actors should be viewed as complementing the existing participation of state actors.
The future model of Indonesia–Australia economic dialogue may become an intersection of various interests, including government, business communities, and intellectuals from Indonesia and Australia. This will engender public, private and academic collaboration for stronger economic ties between the two neighbouring countries.
*About the author: Eko NM Saputro is a Senior Policy Analyst in the Fiscal Policy Agency, Ministry of Finance, Republic of Indonesia.
Source: This article was published by East Asia Forum. The views and opinions expressed in this article are solely those of the author, and do not necessarily reflect the affiliated institutions.