Address to New Zealand Indonesia Business Seminar - Jakarta

Selamat pagi. Tena koe. Good morning.

It’s a great pleasure to be here in Indonesia and it’s a great pleasure to be addressing this distinguished gathering of Indonesian and New Zealand business.

This is my first visit to Indonesia as Prime Minister. But like the rest of the world I have been watching your country with admiration.

Your progress in the 21st Century has been extraordinary.

You are emerging as an economic powerhouse – already one of the 20 biggest economies in the world and growing at over six per cent a year, despite the global financial crisis.

I noted earlier this year that Moody’s had restored Indonesian debt to investment grade, which is a tremendous stamp of approval for your economy, and will be very positive for investment.

Democracy is flourishing here in Indonesia. Your political and economic transformation over the last decade has made many millions of Indonesians better off.

And you are playing a very important leadership role in ASEAN and in the wider Asian region, which we in New Zealand greatly value.

I think it is the right time for New Zealand and Indonesia to develop even closer and deeper ties.

The opportunity is certainly there.

Economically, our relationship can only grow. At the beginning of this year, Indonesia ratified the ASEAN–Australia–New Zealand Free Trade Agreement – an FTA of the highest quality.

Politically, our countries have a great deal of contact at the highest level through forums such as APEC and the East Asia Summit. I have met President Yudhoyono a number of times and in fact the first formal bilateral meeting I ever had as Prime Minister was with your President at APEC in Peru in 2008.

And our countries are building off a strong history.

New Zealand was one of the first countries to recognise the independent Republic of Indonesia. Next year will mark the 50th anniversary of formal diplomatic relations between our two countries.

The early years of that relationship were marked by development assistance. Even now, the New Zealand development programme in Indonesia is our biggest outside the Pacific.

More recently, our countries’ relationship has featured a shared response to natural disasters. New Zealand was a strong supporter of post-tsunami recovery efforts in Aceh, and has contributed to recovery efforts after the more recent earthquakes in Jogjakarta, Padang and Mentawai.

Last year, the Indonesian Government made a generous contribution to the Christchurch Earthquake Appeal, for which we are very grateful.

The earthquake off the coast of Aceh last week was a sobering reminder of the threat both our countries live under. All New Zealanders were greatly relieved that this event caused minimal damage.

Looking ahead, my Government is committed to strengthening New Zealand’s links with Indonesia.

Indonesia is central to the stability and prosperity of Southeast Asia, and to the economic well-being of Asia more generally.

We welcome Indonesia’s growing influence in the region and in global forums like the G20.

As economies, we have complementary strengths.

There are huge opportunities for New Zealand and Indonesia to increase our two-way trade and to do a great deal more business together.

In no small part, that starts with awareness. For many New Zealanders, Indonesia is still one of the great unknowns of Asia. It’s an amazingly complex and diverse country.

I want to see New Zealanders and Indonesians becoming more familiar with each other’s countries and with the opportunities to travel and do business.

After all, Indonesia is New Zealand’s nearest Asian neighbour.

Increasing awareness is one of the main reasons I have brought New Zealand business leaders here with me, accompanied by Trade Minister Tim Groser, who as you probably know was New Zealand’s Ambassador here in the 1990s.

Our free trade agreement offers the prospect of greater commerce between our two countries.

By way of example, New Zealand has had an FTA with China since 2008, and since that time we have seen two-way trade increase by 50 per cent. China has now leapfrogged the United States to become our second-biggest trading partner.

I would be delighted to see a similar expansion in trade between New Zealand and Indonesia, on the back of our own FTA.

I congratulate Indonesia, and the other members of ASEAN, for having the courage and foresight to sign up to such an ambitious deal.

New Zealand’s experience is that FTAs are mutually beneficial and lead to increased prosperity for all the countries involved.

They do so in many ways.

New Zealand is interested in more than just Indonesia’s rapidly-expanding consumer market. We see the FTA as a means of developing, for example, business partnerships, two-way investment, and a vibrant trade in services.

New Zealand has a lot to offer Indonesia.

We are a reliable, competitive and high-quality source of food.

We have technical knowledge and expertise that can help your country develop, build infrastructure and add value to the natural resources you have in such abundance.

We can continue to work with you, for example, in harnessing your large geothermal energy resources.

We can contribute in other niche areas like air services.

We can be a high-quality, cost-effective partner in educating the next generation of Indonesian leaders.

And we are a great place to visit, see our wonderful scenery and play a few rounds of golf.

In our business delegation are people who can help Indonesia in all those different ways.

A number of the delegation are from the food and beverage sector.

Indonesia has a rapidly growing population that wants to be fed and, increasingly, wants to be fed well.

We see food security in Indonesia, as in most countries, as having two elements – increasing domestic agriculture production, and securing a reliable and complementary supply of imports.

New Zealand can contribute to both these objectives.

Indonesia’s consumption of protein is set to increase strongly in coming years, as incomes continue to rise.

I understand that per capita consumption of dairy products in Indonesia is around 11 kilograms a year. That’s where China was 10 years ago, and the Chinese now consume around 25 kilograms per capita per year and rising.

Meeting such demand calls for an increase in domestic dairy production, alongside an increase in dairy imports.

New Zealand can assist Indonesia with both these things.

Similarly, I have seen Minister Wirjawan’s comments about the beef sector in Indonesia, and his desire to see Indonesian per capita beef consumption rise to 20 kilograms a year. It’s currently around two kilograms a year.

As Prime Minister of a country that efficiently produces delicious grass-fed beef, I am of course delighted with that objective.

Imports of New Zealand’s high-quality beef will always complement, not challenge, Indonesia’s own beef production.

The same applies to other food products.

Even if all New Zealand was turned into farmland, we could only supply a small fraction of the rapidly-expanding demand from markets in East and Southeast Asia.

So there are significant business opportunities in meeting Indonesia’s food security goals and in particular for new partnerships between New Zealand and Indonesian business.

The same can be said in the energy sector.

New Zealand sees itself as the natural partner for Indonesia in geothermal development.

We have a strong history in this area. Together, using New Zealand development funding, we built the first commercial geothermal plant in Indonesia, at Kamojang.

Many of your leading geothermal engineers have been educated at the University of Auckland.

Currently, 12 Indonesian students each year study for postgraduate geothermal qualifications in New Zealand, under the New Zealand-ASEAN Scholars scheme.

A new industry group – Geothermal New Zealand – has been established to better position New Zealand as a leading international provider of geothermal energy products and services.

So New Zealand geothermal producers are ready to work with Indonesia to develop your vast resources.

As Indonesia scales up its infrastructure, it is also looking to increase the skills of its population.

New Zealand has a lot to offer.

Our Governments last year signed a cooperation agreement in education.

New Zealand universities and other institutions offer Indonesian students qualifications that are highly-valued and transferable throughout the world. We are relatively close to Indonesia and we offer a safe and welcoming environment.

We would like to see more Indonesian students come to New Zealand and our new government agency, Education New Zealand, is increasing its focus on Indonesia.

New Zealand can also assist Indonesia in raising the quality of its own institutions.

Educational institutions in New Zealand and Indonesia have been working together more and more as partners and several MOUs have been signed between tertiary institutions in the past couple of years.

Finally, I want to mention air services.

New Zealand has a great deal of expertise in this field. We’re a long way from our neighbours, and tourism is one of our major industries. So we know a lot about running airports and airlines, and we depend on connectivity as much as any country in the world.

New Zealand can help Indonesia build and run airports, and in general to improve its air connectivity.

That includes connectivity with New Zealand.

Air links encourage people-to-people contacts. These in turn encourage understanding between different countries and encourage trade.

For this reason I was pleased to learn that Air New Zealand will be restarting a service between Auckland and Bali this year. And I’m delighted to hear that Air New Zealand is exploring options for collaboration with Garuda Indonesia, on which I flew from Singapore to Jakarta yesterday.

As well as being Prime Minister, I am also the Minister of Tourism in New Zealand, so I am very keen to encourage further direct flights from Indonesia to New Zealand.

In conclusion, I want to urge the New Zealand and Indonesian businesses here today to make the best use of this seminar and focus on how you can work together.

For New Zealand business, this means you should see Indonesia as more than simply a growing consumer market. Look at how you could form productive partnerships with Indonesian business – here, in New Zealand or together in other countries. Invest in understanding more about Indonesia.

In turn, for Indonesia, it means being open to competition and making the most of our free trade agreement. Ensure that the environment is right for trade to flourish. And ensure that domestic producers can respond to market signals.

New Zealand’s experience has been that these measures work. Our farmers are the most efficient in the world in large part because, unshackled from government support, they have been able to respond to market forces.

The same goes for the other sectors represented here.

Indonesia has everything going for it – climate, resources, demographics and location.

It is an exciting time to work with Indonesia and to do business with Indonesia.

Because of that, I think the relationship between New Zealand and Indonesia will only get deeper and more important to both countries over time.

I wish you an enjoyable and profitable seminar.

Thank you.