Yet, he observed that Indonesia may not always place Australia at the same level of strategic priority.
This raises a critical question: Are Australian leaders setting expectations too high, or is Indonesia simply managing a far broader foreign policy agenda?
With Jakarta’s focus spread across its economic engagement with major powers, and its expanding global role through platforms such as the G20, BRICS, and its ongoing OECD accession process, Australia, despite its geographic closeness and deepening economic ties must navigate a relationship where Indonesia’s diplomatic bandwidth is increasingly global in scope.
However, does Indonesia really need to designate Australia as its “most strategic partner” in order to enhance trade and investment ties? I would argue not.
Such a label, while symbolically important, should not define or limit the way we capitalize on the many modalities of cooperation already available between our two nations. What matters is not the title of the relationship, but the substance of what we do together.
In my view, there are several key modalities to continue strengthening Indonesia–Australia ties:
First, to meet its ambitious national growth targets, Indonesia is diversifying its partnerships to attract inward investment, mobilize capital for domestic priorities, and reduce geopolitical risks in sectors vulnerable to great-power competition.
Take the down streaming of critical minerals as an example. Indonesia is actively engaging multiple partners to participate in value-added industries built around its vast reserves of nickel, bauxite, and extended to other key commodities.
Australia, despite being a fellow resource powerhouse with overlapping critical mineral assets remains an important collaborator.
Recent discussions between the two governments since Indonesia’s G20 chairmanship year in 2022 have focused on complementarity in value chains, particularly in battery production and renewable-energy supply, where Indonesia’s processing capacity and Australia’s high-grade raw materials can form a natural synergy.
Second, Australia itself is recalibrating its foreign policy to deepen engagement with Asia, with a sharper focus on Southeast Asia.
Under Prime Minister Anthony Albanese, Canberra released the landmark Southeast Asia Economic Strategy to 2040 (authored by Special Envoy Nicholas Moore), a blueprint that identifies Indonesia as a priority partner and lays out pathways to dramatically expand trade, investment, and business-to-business links.
Foreign Minister Penny Wong has repeatedly emphasized that Australia’s economic resilience depends on stronger ties with its neighbourhood, describing Southeast Asia as central to Australia’s future prosperity.
At the Australian Financial Review Asia Summit in September 2025, Australian key business leaders and experts reiterated that sustained engagement with fast-growing Asian markets including Indonesia will be critical to Australia’s long-term economic growth and strategic stability.
Third, Indonesia and Australia have progressively developed a suite of formal instruments to deepen economic cooperation.
The landmark Indonesia–Australia Comprehensive Economic Partnership Agreement (IA-CEPA), which came into force in July 2020, stands at the core of this framework.
To accelerate the implementation of IA-CEPA, the two governments established Katalis, a flagship economic cooperation program that drives sectoral opportunities across agriculture, food and beverages, advanced manufacturing, critical minerals, education, and health services, among others.
Katalis operates as a catalytic fund and technical facility, supporting projects that strengthen value chains, promote inclusive trade, and open new market access for businesses in both countries.
Other key mechanisms include KINETIK (Kemitraan Iklim, Energi Terbarukan dan Infrastruktur Australia-Indonesia), a joint initiative to foster collaboration in fair energy transition; and KIAT (Kemitraan Indonesia–Australia untuk Infrastruktur), which supports infrastructure planning, financing, and policy reform to improve connectivity.
All of these mechanisms are treated as living instruments regularly reviewed and upgraded under the Plan of Action for the Indonesia–Australia Comprehensive Strategic Partnership 2025–2029 to keep pace with shifting regional trade dynamics, emerging technologies, and the evolving national priorities of both Indonesia and Australia.
Fourth, perhaps the most fundamental pillar is the people-to-people relationship, which remains dynamic and deeply interwoven.
Indonesia sends the largest number of Southeast Asian students to Australia, taking advantage of its world-class universities and vocational training institutions.
Australian universities are also increasing their presence in Indonesia, Monash University opened its Jakarta campus in 2021 (the first foreign university in Indonesia), while others such as Western Sydney University and Deakin University are doing similar ventures.
On the workforce side, opportunities are growing for Indonesian workers in Australia, particularly in sectors facing acute shortages, including aged care, nursing, hospitality, agriculture, and construction.
The Mobility Visa Arrangement under IA-CEPA provides additional pathways for skilled Indonesian workers to participate in Australia’s labor market.
Yet, there are persistent concerns that many Australians no longer study Bahasa Indonesia in significant numbers, Australian high schools offering Indonesian language courses have declined by more than 60 percent since the early 1990s and with that eventually, misperceptions about Indonesia’s low economic development progress continue to deter some Australian investors.
While bilateral business councils such as Australia-Indonesia Business Council (AIBC) provide valuable knowledge platforms, private-sector engagement must broaden and deepen to unlock the next phase of partnership.
Fortunately, the active role of Australia’s Business Champion to Indonesia is widely recognized as a key effort to advance this agenda.
However, Indonesian Business Council (IBC) observes that market perception and confidence must catch up with the existing formal frameworks.
Some Australians may lack current knowledge or interest in Indonesia’s economic reforms and opportunities.
Negative news about Indonesia’s regulatory complexity and political dynamics remain barriers. Expanding the base of private sector actors, enhancing transparency, and better showcasing bilateral successes may help overcome these.
Finally, youth engagement is critical to reshaping perceptions and driving demand.
Bringing together young entrepreneurs, creative industry leaders, and next-generation business icons from both nations whether through professional exchanges, joint advocacy, or high-profile events like the Indonesia Economic Summit (IES) can create fresh energy in the relationship.
After all, geography should not be a barrier: Australia and Indonesia already collaborate more effectively with partners far more distant. A stronger market-driven narrative can help convert proximity into genuine economic and social advantage.
*) The author is a VP for International Affairs, Indonesian Business Council (IBC)
The views and opinions expressed on this page are those of the author and do not necessarily reflect the official policy or position of the ANTARA News Agency.
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