1. Australia and Indonesia

Size: px

Start display at page:

Download "1. Australia and Indonesia"

Melanie Payne
5 years ago
Views:

1 Jokowi s Indonesia: Australian perceptions, challenges and opportunities Greg Barton Herb Feith Research Professor for the Study of Indonesia Australian International Education Conference 9 October Australia and Indonesia 1

2 Population Size Landmass (km 2 ) Map of Indonesia overlaid on Australia. Illustration: Nick Evershed for the Guardian 2

3 Military Spending (US$) How warm towards Indonesia? 3

4 Perceptions of Indonesia Policy concerns 4

5 Knowledge about Indonesia Correct knowledge of Indonesia 5

6 Trust in Indonesia Top of mind breakdown 6

7 Sentiment drivers good/bad Perceptions vs Facts 7

8 Views of each other Close relations 8

9 Importance of building ties Improving ties? 9

10 Countries most important 2. Economic takeoff Indonesia has returned to the economic takeoff that was interrupted by the 1997 financial crisis Indonesia s takeoff is reinforced by the rise of Asia and the other large emerging markets The current level of political stability and openness is substantially better than the 1990s Regime change no longer looms on the horizon 10

11 McKinsey Global Institute Sep

12 Stable Growth A decade of stable growth 12

The E7 and the Rise of Asia Indonesia s economic takeoff is linked to the general rise of Asia In particular, the rise of China and India China and India are key because of the absolute size of

13 The E7 and the Rise of Asia Indonesia s economic takeoff is linked to the general rise of Asia In particular, the rise of China and India China and India are key because of the absolute size of their economies Together with China and India, Indonesia joins the other large emerging markets of Russia, Brazil, Turkey, Mexico: the Emerging Seven (E7) World Economic Expansion 13

3. Urban middle class era The rapid rise of the E7 is accompanied by sharp reductions in poverty Most people in Indonesia are poor but over the next decade the majority of people will move out of

14 3. Urban middle class era The rapid rise of the E7 is accompanied by sharp reductions in poverty Most people in Indonesia are poor but over the next decade the majority of people will move out of poverty New entrants to the middle class / consuming class will still have modest incomes By 2030 around 2/3 of all people in Indonesia ( m out of 280m) will be middle class By 2030 around 2/3 of all middle class people will be living in Asia Rise of the global middle class 14

15 Urbanisation % of Indonesians live in cities 2030 more than 70% will live in cities % of GDP generated in cities % of GDP generated in cities Jakarta will remain constant at 20% but midsize cities (2-10m) will contribute 25% of GDP in 2030 Small cities (0.15 2m) contribute 31% of GDP growing to 38% in 2030 Indonesia (and the Philippines) are more urbanized than the rest of Asia E7 - Urbanisation 15

16 Urbanization: China, India Urbanization: SEA 16

17 Economic Density Not just Java 17

18 4. Sectorial Opportunities Ag-fisheries growth potential (MGI) 18

19 Low hanging fruit Ag-fisheries (MGI) Crop production gains 19

20 Barriers to growth Ag-fisheries (MGI) Horticulture underdeveloped (MGI) 20

21 Export crop potential (MGI) Water security (MGI) 21

22 Energy demand (MGI) Oil & Gas trade deficit 22

23 Energy market growth trends (MGI) Energy productivity barriers (MGI) 23

24 Energy efficiency opportunities (MGI) Oil and coal dependence (MGI) 24

25 Poverty reduction targets (WB) Double Burden of Malnutrition (DBM) 25

26 Rapid rise in obesity Hypertension 26

27 iv.) Infrastructure Infrastructure and FDI - Whilst Indonesia s economic performance has been impressive growth is still lower than it could and should be - Foreign Direct Invest stopped for a decade after the 97/98 Economic Crisis it remains too low - Investment is held back by lack of ease in doing business - Growth continues to held back by poor infrastructure particularly logistics & transport - Internet use remains below par 27

28 Indonesia s urban advantage Lagging infrastructure investment 28

29 Investment in Infrastructure SEA Internet Usage 29

30 Global Social Network Usage FDI growing but lagging 30

31 Education demand (MGI) Education deficit (MGI) 31

32 Higher Ed Closing Gender Gap Labour productivity 32

33 Growth in Wages China - Indonesia Asia Research and Development 33

Global Working Age Pops to 2050 About the AIC The AIC has a vision of establishing greater engagement between Australia and Indonesia through a culture of friendship, trust, respect and

34 Global Working Age Pops to 2050 About the AIC The AIC has a vision of establishing greater engagement between Australia and Indonesia through a culture of friendship, trust, respect and co-development of investments in research with shared benefits. The AIC will pursue this vision through three Goals Increasing understanding in the Australian community of contemporary Indonesia and its growing importance to Australia Building high-impact networks to strengthen relationships and leverage opportunities between governments, business, education and communities Addressing shared national challenges through highly collaborative research programs that create and share information, knowledge and skills. 34

35 About the AIC Our founding institutional partners About the AIC Our founding institutional partners 35

36 Health Challenges Indonesia is in the midst of a health transition, represented by the double burden of disease, with existing problems of Infectious Diseases (IDs), such as malaria and HIV, now coupled with the rising tide of Non-Communicable Diseases (NCDs), such as heart disease and diabetes. Maternal mortality is increasing despite high rates of ANC coverage and increasing hospital facility based birth; A priority remains to move the health care system to better support prevention and primary care A collaborative research hub could be built around the collective strengths AIC s participating partners have in various but integrative aspects of health; The researchable topics would include nutrition (both under and overnutrition/lifestyle changes), infectious diseases (including hepatitis & emerging infections), and maternal-child and adolescent health (including a focus on prevention of the above & excessive maternal deaths); In addition to supporting research, the AIC could use a unique convening power to facilitate sharing of evidence around smoking and healthy nutrition regulation, especially in the context of primary prevention, and build Indonesian health research capacity. Energy Challenges Population and GDP increase are leading to enormous increases the energy demand in Indonesia. In Australia demand is decreasing but price is increasing; Indonesia is largely dependent on fossil fuel (mostly domestic) leading to growing greenhouse gas emissions. Indonesia s current oil & gas subsidy policies may impact on the uptake and implementation of new and renewable energy sources; Gas infrastructure in Indonesia is currently poor and mechanisms to integrate new & renewable energy into the overall energy supply is low. A collaborative research hub could be built around a mix of high impact policy and technical research; Policy research could initially focus around analysing the best energy mix suitable to Indonesia s unique circumstances and resources; Technical research could focus around the role of energy as an integrative component connecting agriculture, infrastructure and health, and on means to enhance the equitable access to energy (infrastructure) to remote communities i.e. across outlying islands. 36

37 Food and Agriculture Challenges Pressures: demography/population growth, economic growth, energy use, climate change, agricultural commodity markets & trade, smallholder farmers, devolution and demand for more transparency; Needs: on-farm innovation, aquaculture to replace marine wild catch, biosecurity and relationships between food, health and wellbeing. AIC s unique role was identified as helping to bridge a divide between research and policy and between supply and demand through bringing academia and government closer, including by helping to overcome administrative barriers; The identification of the need for an AIC research hub was less distinct than for other topics given the large investment already made by others in agriculture. The call for adding to existing investments in way which would deal with the previous point (i.e.bridging divides) emerged more clearly; A priority area for thinking lies around research opportunities that link agricultural production to supply chains, consumers, infrastructure and health. Infrastructure Challenges High population growth, particularly with the highest density in Java, accompanied by a very high growth in vehicle use, especially motorcycles, over the last decade; There is a lack of convenient public transport; Geographically, the very high rainfall during rainy season presents specific issues for certain infrastructure, as do frequent volcanic eruptions and earthquakes; The demand for infrastructure expenditure far exceeds available funds for both capital projects (necessary to create a quantum change) and ongoing maintenance; Immediate issues include limited government budgets, perceived high investment risk, poor project initiation processes, land acquisition issues; There is a need for integration across government, Government Business Enterprises and private infrastructure activity; Local and international finance market needs development in the context of Indonesian infrastructure. As with energy, a collaborative hub could be built around a mix of policy and technical research; Priorities for a hub include energy telecommunications, disaster management, water and transport; Across these priorities would thematic research considering the regulatory environment, investment management, safety, accessibility, climate adaptation and user behaviour. 37

38 Conclusion Indonesia s political and social stability represents a great asset and must be safeguarded Growth stable but damage from 97/98 crisis remains Indonesia is part of the E7 for better or worse Growth of the middle class is key Urbanization presents challenges and opportunities Demographics present a limited window of opportunity Manufacturing needs to innovate and grow Infrastructure needs massive investment The development of human capital is the key to going from good to great Human capital The development of human capital is the key to going from good to great Good leadership is key to good governance and sustained growth and development New leadership 9 April; 9 July Waiting for Number 7! Indonesia s 7 th president will likely serve until 2024 Jokowi is represents the focus of hope for many The parliament is powerful but the president is seen to be more important 38

Alianza del Pacífico. October, Germán Ríos May 2012

Alianza del Pacífico. October, Germán Ríos May 2012 Alianza del Pacífico October, 2011 Germán Ríos May 2012 Table of Contents The integration process in Latin America The future is Asia Latin America and Alianza del Pacífico The integration process in Latin