Retired Brigadier Gary Hogan has been Australia’s Defence Attaché in both Papua New Guinea and the Republic of Indonesia.

In March 1964, the 'Year of Living Dangerously', Indonesian President Sukarno, speaking at a public rally, told the US ambassador in attendance to 'go to hell with your aid!'

Aid programs with Indonesia, even ones as massive as ours, at over half a billion dollars annually, have never been an effective means to garner support from, exercise influence over, or curry favour with its leaders. If there are Australians who presume otherwise, tell 'em they're dreaming.

In sharp contrast, last week's announcement of the 'Papua New Guinea Solution' to illegal boat arrivals by Prime Minister Rudd was a direct offshoot of the tens of billions of aid dollars Australia has poured into that country since its independence in 1975. A cargo cult mentality is alive and well in PNG and this afforded the necessary levers for the Australian prime minister to pull so deftly in his game-changing policy statement, which will almost certainly stem boat arrivals in the near term, until people smugglers and Australian activists are able to find paths around the absolutist decree that even legitimate asylum-seekers will now not find sanctuary in Australia.

Only the passage of time will tell whether the policy is a masterstroke or too cute by half. With an Australian election due very soon, it is at least a short-term masterstroke. For it will take at least that long for the wheels to fall off and the gloss to fade from the toughest statement yet of Australian resolve to foil the peddlers of hope and merchants of death operating between Java and Christmas Island.

At a press conference on the eve of his visit to Jakarta earlier this month, Prime Minister Rudd was careful to hose down hopes of any breakthrough agreement with Indonesia on the ongoing people-smuggling cancer, which threatened to infect our healthy bilateral relationship. Mr Rudd said he anticipated little real progress and was keeping his expectations modest. He was not disappointed.

The joint announcement by Prime Minister Rudd and President Yudhoyono of a regional conference on people-smuggling was about as underwhelming a response to a clear and present humanitarian disaster as one could imagine — like holding a seminar on vulcanology during the Mount Merapi disaster of 2010 or convening a climate change symposium in the middle of the 2011 Queensland floods.

What's more, the Bali Process already provides a forum for relevant nations to discuss solutions to, among other things, the illegal movement of people around our region. It is still unclear if and how the conference announced by the two leaders will complement, differ from or build on the Bali Process. It is likely the principal outcome of this newest mechanism for discussing people-smuggling will be the recognition that a mechanism already exists for discussing people-smuggling.

The more recent move by Indonesia to withhold visa-on-arrival privileges from Iranian tourists is a welcome development, and a sign that Jakarta recognises the sensitivity of the boats issue in Australia. Politically, it is also relatively low-cost for the Indonesian Government. The overwhelming majority of Indonesia's Muslims profess the Sunni tradition. Getting tough with a few Iranian Shi'ites will lose no votes, nor incur the ire of Indonesia's influential religiously-affiliated political movements.

And Foreign Minister Marty Natalegawa's recent announcement that Jakarta was prepared to discuss 'turning back the boats' with the Australian Opposition is further indication that Indonesia understands fully the volatility of the asylum-seeker issue across the breadth of our political spectrum, especially in an election year.

Meanwhile, there is a real possibility that the people-smuggling trade through the Indonesian archipelago is about to run afoul of a perfect storm. After last week, potential customers will likely remain in their current way stations, deferring passage until the effectiveness of the PNG Solution' can be properly gauged. By the time chinks in the armour can be assessed over the next few months, the monsoon season will be approaching, with only the most desperate and foolhardy hazarding the lethal storms in seas south of Java.

Along with public notice of Australia's hardline new policy, the harsh reality of monsoonal dangers should be broadcast in the Government's media campaign in countries like Sri Lanka, Afghanistan, Iran, Iraq and Pakistan.

Australia seeks to stop boats. Indonesia offers to hold discussions. PNG offers to hold people. The two responses are telling reminders of the diverse dynamics across our immediate neighbourhood and revealing case studies in the use of aid to achieve our regional diplomatic objectives.

The formula is relatively simple: PNG is small and we are large. It is unlikely Prime Minister Peter O'Neill would ever tell Prime Minister Kevin Rudd to 'go to hell with your aid!', though much has yet to play out in PNG. By contrast, we are small and Indonesia is large. Neither boats nor aid should ever distract our government from the main game with Jakarta: securing preferential access for Australian goods, services and companies into the 50 million-strong consumerist middle class on our doorstep.

Paul Keating used to say Indonesia was the country Australians fly over on their way to Europe*. Nowadays, Indonesia is the country Australian businesses look beyond as they eye markets in China and India. At some stage, this needs to stop.

The Kevin Rudd approach to discouraging and diverting overloaded boats sailing to Christmas Island, even if only a politically inspired quick fix, incorporates the best of all outcomes. Australia gets a considerable return on its aid investment in PNG. People-smugglers face a sharp downturn in profits and need to consider a radically new business model. Indonesia continues its masterful inactivity and convenes a regional forum, appearing concerned and involved. Australia maintains its primary focus on market access and commercial ties with Indonesia, unencumbered by sidebar issues. Fewer asylum-seekers drown.

The art of the possible doesn't get much better than that.

* Correction, 10.40am: the quote 'Asia is the place you fly over on your way to Europe' is often attributed to Keating, though we can find no reliable sources to suggest he ever said it. (Ed.) UPDATE FROM A READER.

Photo courtesy of the Defence Department.