Albanese calls for deeper economic ties with Indonesia on first visit since re-election

Australia Broadcast Center

15-05-2025

Anthony Albanese has backed Indonesia's bid to join a key regional trade agreement after being given a spectacular official welcome to Jakarta's Presidential Palance and holding high levels talks with Prabowo Subianto.
The prime minister urged Australian businesses to show greater "ambition" when dealing with the emerging South-East Asian economy, while brushing aside questions about Indonesia's growing military ties with Russia.
Mr Prabowo and Mr Albanese both talked up the bilateral relationship in the wake of the meeting, with Mr Albanese saying "no relationship is more important to Australia than this one."
Mr Prabowo said Australia and Indonesia were "destined to be neighbours" and that "good neighbours are the ones who will help us in rough times."
"Family may be far away, but neighbours are always there for us. Therefore, I am determined to maintain the best relationship with our neighbour," he said.
Mr Albanese extolled Indonesia's economic rise over recent decades but warned Australia risked missing out on the boom.
"To convert extraordinary potential into concrete progress, then all of us — government, business, civil society — need to demonstrate greater engagement and ambition."
The Albanese government has launched a new strategy to boost Australian economic engagement with South-East Asia, but investment from Australia still lags, and trade between the two countries has actually contracted slightly in recent months.
Mr Prabowo stressed during his remarks that he had "invited … Australia to participate more in our economy."
The prime minister also declared that he'd back Indonesia's bid to join the OECD and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CP-TPP).
Multiple other countries — including China and Taiwan — have also been angling to join the sprawling trade pact, which has more than a dozen members.
Susannah Paton from the Lowy Institute said it was a "no-brainer" for Australia to support Indonesia's CP-TPP accession, "both politically and practically."
"If Indonesia were to join either OECD or CP-TPP it would also promote the kind of economic reforms that could help drive investment from Australia, too," she said.
The prime minister and the president also discussed defence and security cooperation in the wake of a major defence pact signed by both countries last year and the controversy over a reported Russian approach to base military aircraft in Indonesia's Papua province.
When asked about the story during a press conference ahead of the meeting, Mr Albanese pointed out that Indonesia had ruled out giving Russia any basing rights.
But he avoided questions on whether Australia had intelligence confirming Russia had made such a request, simply saying Indonesia had "made its position clear."
"Russia, of course, will try to increase its influence," he said.
"It is not for me to comment on what occurred between countries that are not Australia. What is important is Australia's position."
He also wouldn't be drawn on whether he'd raise the issue with Mr Prabowo during the official talks.
The two leaders discussed expanding defence and security cooperation under a major security agreement signed by both countries last year.
Mr Albanese said it represented "the most significant step in the Australia and Indonesia security partnership for three decades."
"But let me be very clear — I do not see this agreement as the last step," he said.
For his part, the Indonesian president simply said Indonesia was still committed to ratifying the agreement and would continue to "discuss the possibilities to improve cooperation in the defence sector."
Australia has also committed $15 million to "enhance bilateral maritime cooperation" between the countries.
Susannah Patton, director of the South-East Asia Program at the Lowy Institute, said initiatives like that would help with "maintaining momentum and capitalising on Mr Prabowo's goodwill to Australia.
"However, the DCA still hasn't been ratified by either parliament, so these initiatives are separate, rather than breakthroughs enabled as a result of the agreement being in force," she said.
"Australia has similar maritime cooperation programs with other South-East Asian countries, especially the Philippines and Vietnam, so the question with Indonesia will really be how receptive and engaged it is with what Australia is offering."
The government has talked up Mr Prabowo's warm attitude to Mr Albanese, pointing to his decision to pay a rare visit to the prime minister's hotel for an informal meeting last night before today's official talks.
It also believes this visit will help cement the prime minister's relationship with the president, who is taking a far firmer hand on key strategic decisions than his predecessor Joko Widodo.
But Mr Prabowo has also held firmly to Indonesia's long commitment to non-alignment, with Mr Patton suggesting Australian officials would also be realistic about how far the strategic relationship could go.
"Prabowo's warmth and positive disposition is certainly valuable," she told the ABC.
"However, he has also been keen to strengthen ties with many other countries, including China and Russia, so strategic limits will remain firmly in place."