Prime Minister Abbott delivered a short speech at a business breakfast in Jakarta this morning which contained these striking words:
At present, Indonesia’s annual GDP per person is less than $4000 – or a tenth of Australia’s – but it’s growing at about 6 per cent a year. It may be many years before individual Indonesians’ standard of living equals that of Australians but it probably won’t be very long before Indonesia’s total GDP dwarfs ours.
Yes, 'dwarfs' is what he said. And just to reinforce the point: 'on present trends, Indonesia will be the number four economy in the world by mid-century.'
I don't think Australians are in any way prepared for this reality. If they think about Indonesia at all, it is in relation to illegal immigration, natural disasters, terrorism or as a holiday destination (that is, unless you belong to the 30% of Australians who don't know that Bali is part of Indonesia). We haven't, as a nation, given much thought to what it will be like to have a friendly but not allied and occasionally prickly global economic power as our near neighbour. Tony Abbott clearly recognises the urgency of the problem:
From Australia’s perspective there should be an urgency to building this relationship while there’s still so much that Australia has to give and that Indonesia is keen to receive.
But there's also a sense of fatalism about Abbott's tone. It suggests that there will come a time when Australia has nothing to offer Indonesia. [fold]
In economic terms, I doubt that's true, because it's not a zero-sum equation. As Abbott himself implied in the speech, a growing Indonesian middle class ought to be a boon for Australian business.
But in security terms? I doubt that a more powerful Indonesia will ever be a threat to Australia, but we will matter less and less to Jakarta; our voice will be smaller. That may not be a big deal if the regional security environment remains reasonably benign. But here's the thing: that future won't be ours to determine. As Australia grows relatively smaller compared to Indonesia, we will get less of a say in shaping the regional order.
We can turn this around or at least arrest our relative decline if we want to, but it would probably mean a lot more investment in diplomacy and defence spending, and a larger population. Those are huge and confronting conversations, and they can only start with an honest appraisal of Australia's position in the region. So is Prime Minister Abbott prepared to tell Australians what he just told Jakarta?
Photo courtesy of the Prime Minister's Office.