The Prime Minister of New Zealand, John Key, plans to visit Indonesia from 15 to 18 April 2012. The visit is important for Indonesia for at least two reasons.
Firstly, this is the first official visit in which a number of prominent businesspersons will accompany the Prime Minister. Secondly, it raises the possibility of increasing exports, improving human resources, and opening up employment opportunities for our workers.
Increasing bilateral trade is a pressing priority given that the political, security and socio-cultural relationship is practically problem-free. Now is the time for the two countries to tap the potential each country offers. The almost 55 year diplomatic relationship is a valuable foundation for embracing a better future together.
The volume of Indonesia – New Zealand trade over the past five years has amounted to over US$7.5 billion, rising by an average of 15 percent per year. The value of Indonesia’s exports to New Zealand in 2011 was $US580 million, a rise of 12 percent on 2010. Indonesia’s leading exports include oil, rubber, paper, furniture, electronic goods and food. It is New Zealand’s tenth largest trading partner.
Having ratified the ASEAN-Australia and New Zealand Free Trade Area (AANZFTA) last year, Indonesia’s exports are projected to rise. It is estimated that 78.79 percent of Indonesia’s exports to New Zealand, amounting to $US325 million, will soon incur no import tariffs, while $US335 million will be tariff-free by 2013.
Import tariffs on 263 textile and apparel products will be removed faster, being brought forward from 2020 to 2017. The possible obstacles are competition from similar products from China, which entered into a free trade agreement with New Zealand in 2008.
From an ideological perspective, alignment with the principles of free trade is not without its challenges. The choice to liberalise trade tends to give rise to protectionism or subsidies. Regardless of this tension, the people of Indonesia must obtain the maximum benefits on offer.
In the New Zealand Prime Minister’s upcoming visit, both governments will sign a number of agreements on agriculture, the environment, and employment. From the aspect of Indonesia’s interests these agreements have dual benefits. Besides offering an opportunity to develop the quality of its human resources through capacity building, there are employment opportunities for skilled workers.
With regards to the development of human resources, agricultural cooperation is aimed at the upskilling of Indonesia’s agriculture through tertiary education by means of scholarships offered by the New Zealand Government. The home of the All Blacks is known to excel in agricultural and livestock knowledge and technology. It is anticipated that Indonesia’s farmers, including cattle and dairy farmers, will gain direct benefits from this cooperation.
The government needs to tread carefully with regards to meat and dairy products. In any event cattle and dairy farmers need to receive protection and incentives from the government to improve their livelihood. The government’s commitments to other nations need to be cleverly balanced by commitments to lift the welfare of its own citizens.
For the environment, the cooperation prioritises the development of environmental management systems and the mitigation of climate change. New Zealand is an expert in the field of climate change and Indonesia can gain a lot from sharing its experiences with it. Going forward, the agreements need to be expanded and sharpened so that sustainable development can be materialised.
In terms of employment opportunities, New Zealand will offer employment for halal slaughtermen, chefs, and Indonesian teachers. 100 potential jobs will be allocated for halal slaughtermen, 20 for chefs and 20 for teachers of Bahasa Indonesia.
A person can be accepted for employment in these fields if they have been declared to have passed the Australian and New Zealand Standard Classification of Occupations (ANZSCO) at the required level. This standard involves certain conditions relating to whether the work is needed, and ability to speak English. This is an opportunity but also a challenge for Indonesian workers.
The opportunities above are additional to the available allocations currently in force. Presently there are more than 400 skilled and semi-skilled Indonesian workers employed in New Zealand. Besides that, there were almost 1000 Indonesians employed on foreign vessels operating in New Zealand waters in 2011.
In the midst of the increasingly conducive political climate for bilateral cooperation, Indonesia must maximise the usefulness of PM Key’s visit. Through the cooperation it will initiate, it is anticipated that stakeholders will be able to create a more competitive business climate, higher quality human resources, and workers with a greater skill set. This is how the benefits of the bilateral cooperation will be reaped.
A AGUS SRIYONO
Indonesian Ambassador to
New Zealand, Samoa and Tonga