In­done­sia’s beef with Aus­tralia is beef

The China Post - - COMMENTARY - BY PIERRE MARTHI­NUS

Live cat­tle, boxed beef and wheat im­ports from Aus­tralia are detri­men­tal to In­done­sian in­ter­ests in en­sur­ing greater food se­cu­rity and es­tab­lish­ing high-value strate­gic part­ner­ships in Asia.

In­done­sia must phase out its de­pen­dence on Aus­tralia in fa­vor of al­ter­na­tive trad­ing part­ners — such as In­dia or Rus­sia — that can of­fer a more se­cure and re­li­able food sup­ply, pro­vide greater strate­gic ben­e­fits and con­fide in com­ple­men­tary goals with In­done­sian as­pi­ra­tions as a ris­ing power.

Achiev­ing food se­cu­rity through trade is a more promis­ing strat­egy than food self-suf­fi­ciency.

Through­out history, well­strate­gized, pur­pose­ful and se­lec­tive trad­ing has trans­formed quiet fish­ing vil­lages into bustling com­mer­cial cen­ters and global hubs of mar­itime power.

Na­tions that trade from “handto-mouth,” how­ever, suf­fer an op­po­site fate.

China traded its way into Bri­tish opium ad­dic­tion, In­done­sia sold it­self into a Dutch spice mo­nop­oly and the Mid­dle East traded away its oil for per­pet­ual Western wars.

De­spite hic­cups, Jakarta’s cur­rent pol­icy on beef self-suf­fi­ciency re­mains fea­si­ble due to its lim­ited scope and should not be equated with full-spec­trum food self-suf­fi­ciency.

Aus­tralian crit­ics, how­ever, are also cor­rect in point­ing out that beef self-suf­fi­ciency is an ex­tremely chal­leng­ing ven­ture that can­not be achieved overnight and, in the short run, might un­der­mine food se­cu­rity in terms of beef avail­abil­ity and af­ford­abil­ity.

In re­cent years, In­done­sian public sen­ti­ment, pol­icy-mak­ing cir­cles and po­lit­i­cal elites have grown in­creas­ingly sup­port­ive of pro­tec­tion­ist mea­sures.

Although I strongly ob­ject to blank- check pro­tec­tion­ism, the trade in live cat­tle, boxed beef and wheat with Aus­tralia is an ex­cel­lent ex­am­ple of un­think­ing handto-mouth trad­ing.

First, de­pen­dence on Aus­tralian live cat­tle, boxed beef and wheat im­ports greatly un­der­mines In­done­sia’s food se­cu­rity.

Bi­lat­eral trade in this area rests on a frag­ile foun­da­tion. In­done­sia con­tin­ues to find it­self held hostage to Can­berra’s quasi-tribal do­mes­tic pol­i­tics.

In­done­sia is of­ten treated merely as a rhetor­i­cal de­vice whose in­ter­ests and inse­cu­ri­ties de­serve nei­ther con­sid­er­a­tion nor con­sul­ta­tion.

Jakarta’s grow­ing re­luc­tance to steadily con­tinue, let alone ex­pand, its trade with Can­berra is the re­sult of nu­mer­ous prece­dents of per­ceived Aus­tralian un­fair­ness to­ward In­done­sia.

In 2011, Aus­tralia uni­lat­er­ally im­posed a live cat­tle ex­port ban ahead of Ra­mad­han against the coun­try that pre­vi­ously bought 45 per­cent of its live cat­tle ex­ports.

In 2013, Can­berra was re­vealed to have given il­le­gally ob­tained in­for­ma­tion to the U.S. to use against In­done­sia in a trade dis­pute con­cern­ing shrimps and clove cig­a­rettes.

Aus­tralia’s plain pack­ag­ing pol­icy was seen as yet another tech­ni­cal trade bar­rier aimed at to­bacco prod­ucts, a la­bor-in­ten­sive in­dus­try that con­trib­utes US$670 mil­lion to In­done­sia’s an­nual ex­ports.

In 2015, Aus­tralia’s abuse of “boy­cott” rhetoric, the can­cel­ing of trade del­e­ga­tions, the re­call­ing of its am­bas­sador and halt­ing of min­is­te­rial-level con­tact fur­ther dam­aged con­fi­dence within In­done­sian busi­ness cir­cles and im­porters, fos­ter­ing per­cep­tions that eco­nomic and trade re­la­tions be­tween In­done­sia and Aus­tralia were as shaky as its pol­i­tics.

Aus­tralian wheat comes with a note of cau­tion. Un­til 2005, Aus­tralia abused the U.N. Oil-for-Food pro­gram and bribed its way into con­trol­ling 90 per­cent of Iraq’s wheat mar­ket, re­sult­ing in the U.N. Volker In­quiry and Aus­tralia’s Cole In­quiry.

Se­cur­ing Aus­tralia’s wheat trade be­came an im­por­tant agenda in the lead-up to the 2003 in­va­sion of Iraq, in which Can­berra re­peat­edly sought as­sur­ance from Washington that its near mo­nop­oly would be left un­harmed in re­turn for Aus­tralian sup­port of the war.

Fur­ther­more, com­mon as­sump­tions that trad­ing more with Aus­tralia lessens the pos­si­bil­ity of in­ter­ven­tion and armed con­flict are as mis­lead­ing as they are his­tor­i­cally in­cor­rect.

Redi­rect­ing the bulk of live cat­tle, boxed beef and wheat trade away from Aus­tralia will di­ver­sify In­done­sia’s food sources and im­prove over­all food se­cu­rity by an­tic­i­pat­ing po­ten­tial droughts, crop and live cat­tle dis­eases, non-tar­iff bar­rier as well as fu­ture po­lit­i­cal fall­outs with Aus­tralia.

In­done­sia should pri­or­i­tize high­value part­ner­ships in Asia that could of­fer ad­di­tional strate­gic ben­e­fits over of low-value un­sus­tain­able trade re­la­tions with Aus­tralia.

Aus­tralia’s rel­a­tive de­cline and In­done­sia’s sus­tained rise means that, over time, both will grow fur­ther apart in terms of their re­gional weight and global out­look.

The two coun­tries will in­evitably de­vel­op­ing di­ver­gent — and per­haps ir­rec­on­cil­able — in­ter­ests.

The op­por­tu­nity costs of trad­ing with Aus­tralia will soon out­weigh any fu­ture strate­gic ben­e­fits.

In­sist­ing on un­sus­tain­able trade with Aus­tralia rep­re­sents false in­tu­ition, an un­in­formed knee-jerk re­flex to per­pet­u­ate the fa­mil­iar, some­thing that is un­abashedly pro­moted by those who have a di­rect in­ter­est in Aus­tralian trans­ac­tions and hand­outs.

Those who have an in­ti­mate in­ter­est in the Aus­tralian re­la­tion­ship mas­quer­ade un­der the pre­tense that their nar­row in­ter­ests rep­re­sent and con­sti­tute the in­ter­ests of the greater In­done­sian public.

Redi­rect­ing our beef de­mands to neigh­bor­ing In­dia, in con­trast, would in­crease In­done­sia’s ex­po­sure to the In­dian Ocean, fur­ther fa­mil­iar­iz­ing Jakarta with the neigh­bor­ing Asian gi­ant that will con­tinue to grow in eco­nomic power and geopo­lit­i­cal im­por­tance.

Over time, this will help foster a com­mon in­ter­est in se­cur­ing bi­lat­eral trade routes in ad­di­tion to re­spond­ing to the sim­i­lar per­ceived threat of main­land Chi­nese ex­pan­sion­ism that might im­pact re­gional sta­bil­ity.

Sim­i­larly, im­port­ing wheat from far­away Rus­sia of­fers con­sid­er­able strate­gic spillover and is not as counter-in­tu­itive as it might seem.

Hav­ing to freight our wheat from the Black Sea will force In­done­sia to bar­gain for bet­ter deals, con­tin­u­ously rene­go­ti­ate our terms of trade, in­cen­tivize a more cost­ef­fi­cient com­mer­cial fleet, find suit­able ex­ports to fill re­turn­ing car­gos at a profit and, even­tu­ally, de­ploy the nec­es­sary naval as­sets needed to jointly pro­tect our bi­lat­eral trade from dis­rup­tions at sea.

As the sec­ond largest arms ex­porter world­wide, re­la­tions with Rus­sia could grow im­mensely in strate­gic value, es­pe­cially once In­done­sia achieves its Min­i­mum Es­sen­tial Forces in 2024.

Strate­gic spillovers, how­ever, do not hap­pen au­to­mat­i­cally. In­done­sia must strive to en­sure that our trade to­day is aimed at win­ning fu­ture strate­gic ben­e­fits and not merely de­signed to sus­tain a coolie’s hand-to-mouth ex­is­tence.

In­done­sia faces the dilemma of de­pen­dence mixed in with dis­re­spect when deal­ing with Aus­tralia.

In­done­sia must now se­cure a “food bowl” for its cit­i­zens be­cause a “beg­ging bowl” made in Aus­tralia will not suf­fice.

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