After COVID: Indonesia-Australia Catalysing Recovery
Paul Bartlett, Katalis Director
Hello and welcome to IA-CEPA ECP Katalis (Katalis). We’re proud and excited to launch this unique bilateral program that helps realise the vast opportunities within IA-CEPA for Indonesian and Australian businesses. We set out on our mission at a time of great global challenge. COVID-19 has done immense economic damage to all economies. The IMF estimates that the global economy shrank by 3.5% in 2020—the sharpest drop in output for more than 70 years. The Australian and Indonesian economies both fell into recession for the first time in many years as restrictions to slow the spread of the virus caused businesses to scale back operations or shut down altogether. The volume of world trade in goods and services declined by around 10.4% in 2020.
Yet the pandemic has also underlined the imperative of close international cooperation, between neighbours especially. Just as it proved impossible for individual countries to control the virus on their own, so cooperation has been the surest way to secure recovery and support inclusive growth. Which speaks to the unique role and timing of Katalis – a joint investment of the governments of Indonesia and Australia to strengthen economic partnership.
IA-CEPA presents exciting trade and investment opportunities for enterprising Australian and Indonesian businesses ready to develop existing partnerships, create new ones and support economic recovery. Indeed, although bilateral trade dropped off steeply between both countries with the onset of the pandemic, we have seen pockets of resilience and growth. Exports of wood products from Indonesia to Australia actually increased over 2020 and the decline in Indonesians studying in Australia was partially offset by a more than 100% increase in Indonesian registrations for Australian online education. As vaccines are rolled out in both countries, the challenge now is to build resilience and facilitate the business-to-business partnerships that will restore, and then surpass the promising bilateral trade and investment relationships that existed pre-COVID-19.
Strategically situated in the world economy’s fastest-growing region, Australia and Indonesia are well placed for new and developing partnerships. With its young population and fast-developing economy of over US$1 trillion, Indonesia is a country of tremendous opportunity. Australia is a developed high-income economy with world-class services and skills. There are countless commercial complementarities across Katalis’s target sectors: agriculture/agribusiness, advanced manufacturing and professional services, and we look forward to working with businesses and governments in both countries to realise these opportunities.
Governments can only prop up economies for so long, as both governments did admirably through the pandemic. The business community —from the smallest enterprises to largest corporations—will have to power a more enduring recovery. As COVID-19 is steadily brought under control and the flow of goods, services, capital and people starts to resume, the Australia-Indonesia partnership has a pivotal part to play.
And that is the offering of Katalis. To work with the business community in both Indonesia and Australia, and be a catalyst for new bilateral commercial partnerships, addressing trade regulations, investing in upskilling workforces and companies and the people of Indonesia and Australia together.
Paul Barlett is Director of IA-CEPA ECP Katalis and has over 20 years’ experience advising on private sector development, trade, investment and competitiveness in Indonesia, Asia Pacific, Africa, the Middle East and Europe.