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Our future with the young tigers: Australia's scientific and technological capabilities could hold the key to beneficial economic relationships with countries in our region

ROBYN WILLIAMS: This is the Science Show coming today mainly from Indonesia, but it's a program very much about us, about Australia in the 1990s, and where we think we're going.

Let's just set the scene with two events from this week. The first is the announcement by the Minister for Science, Ross Free, that an Australian team working in coal research has won the second ever Australia Prize worth a quarter of a million dollars. It went to John Watt, Dr Brian Sowerby and Dr Nicholas Cutmore of the CSIRO Division of Mineral Process Engineering at Lucas Heights; and to Dr Jim Howarth, Managing Director of the Adelaide firm, Mineral Control Instruments. And it's the second time in a row that Adelaide scored, I notice. Their achievement is the rapid analysis of coal to test quality, the export and international value of the process is, of course, enormous. And the other event of the week was a speech by another Federal Minister, our Treasurer John Dawkins, speaking at the summer school at the University of Western Australia in Perth, where he urged Australians to join the tigers of the region - the nations which are surging ahead because they're involved in using their brain power to enrich their peoples' lives and prosperity. This is part of what he had to say.

JOHN DAWKINS: So as we emerge from industrial protectionism, into the world of international trade, our future success is linked closely to the fortunes of our neighbours. To put it one way: we can run with the tigers and grow strong with them.

ROBYN WILLIAMS: The Treasurer, John Dawkins, speaking in Perth this week. And so, if we decide to get with the strength of the Pacific, the young tigers so to speak, perhaps we shall have to see the nations who are our near neighbours as more than a set of obvious conventional images, cliches even. This might be what immediately springs to mind if I say Indonesia, for example, apart from Bali, that is.

PRESIDENT SUHARTO: I am the President of the Republic of Indonesia. I know they call me nice chap, oh, very charming president, but sometimes they call me bad man, trouble maker, and seducer of women and of nations. Okay, I don't care about that.

UNIDENTIFIED: He used to say 'Not long ago, history was made in Washington, London and Moscow, now it is made in Washington, Moscow, Peking and Jakarta'. And because he believed it, millions of people in Indonesia believed him.

PRESIDENT SUHARTO: Freedom of speech; freedom of religion; freedom from want; freedom from fear. Uh? Roosevelt's four freedoms, and we Indonesians, we are also living for that, but those four freedoms are not enough for us. We want to have freedom number five, I think, the freedom to be free.

EXTRACT (Timor massacre):

JOURNALIST: With us, they beat us into a corner, and sitting on the ground the only thing we could say was 'Please, we're from America'. And they kept beating us and then they went with the guns toward us and we just pleaded and said 'We're from America', and I could only think that the guns that were pointed on us, the M-16s, were also from America because the United States provides the weapons for the Indonesian army in East Timor.

ROBYN WILLIAMS: But there's more to a country like Indonesia than just that. The same obviously applies to Malaysia, Thailand, China and the rest of our partners in trade and development that, perhaps, too few Australians know about. They, as John Dawkins implied this week, are likely to be the key to our prosperity, and this is how it may proceed. Today's Science Show is a special report recorded by John Merson in Indonesia and Australia.

JOHN MERSON: Late last year, I came across a fascinating exhibition of photographs while attending a seminar at the University of Indonesia, in Jakarta. These pictures documented the role of Australia in supporting the nationalist struggle for independence in Indonesia, after the Japanese withdrawal in 1944. The exhibition had been collected from the archives of local newspapers, and had been put on to celebrate the 10th anniversary of the establishment of a centre for Australian studies by the University and the Australia-Indonesia Institute.

There were photographs of a youthful Sukarno, with Australian military and diplomatic officials; there were shots of dock workers refusing to handle Dutch cargo; students both Australian and Indonesian marching along Sydney streets, demonstrating against attempts to re-establish Dutch colonial rule - ironic, perhaps, in the light of recent events in East Timor. Yet, most people of my generation have little awareness of these events, or of the support many Australians gave to independence and anti-colonial movements throughout Asia in the late '40s. For this we are fondly remembered by an older generation. However, the intervention of the Cold War, Korea and Vietnam, the emergence of repressive regimes, and four decades of relative affluence and economic complacency in this country has kept us insular and remote from the economic dynamism of the region. Our economic ties in the past have been superficial mainly because of a common perception that we had little to offer each other. We were essentially in the same boat: competitors in supplying raw materials for the industrial markets of Europe and the United States.

In recent years with the demand for our traditional agricultural and mining products continuing to decline, the vulnerability of our resource-based economy has become all too painfully obvious. We're also confronted by a post-Cold War world which seems to be dividing into large Orwellian trading blocs of Asia, the EEC, and the Americas. We're now being told by our old trading partners that our future lies with the Asian tigers. Yet, apart from the occasional holiday in Bali, most of us have little contact and even less understanding of the region's diverse economic and political cultures. A minor event in the United States will rate more attention on televison here, than a political revolution in Asia. But this ignorance or prejudice is not just one-sided. An influential Indonesian commentator at the Jakarta seminar described Australia as the appendix of Asia, an often irritating organ, the role of which no one quite understands.

So what future do we have in the region, and what benefits could we expect from a closer relationship? During my short stay in Indonesia, I was lucky to meet a number of people who have given considerable thought to the issue. From these discussions, it had become clear to me that our scientific and technological capabilities represent an asset of enormous value in building a more mature relationship with our Asian neighbours, despite the fact that most of our economic pundits have consistently failed to take our human and intellectual resources seriously. It's a view also shared by Professor Stephen Hill, the Director of the Centre for Research Policy at the University of Wollongong, who is also chairman of STEPAN - the United Nations' Science and Technology Policy Asia Network.

STEPHEN HILL: There's no question that our relationship to Asia is changing quite radically at the moment. Politically, it's changing; and in terms of general consciousness, it's changing; in educational strategies, it's changing. I suppose some of the earlier stimuli for this development came from the Whitlam years of government in the 1970s, but I think they probably really took off during the 1980s, since the Labor Government of about '83, with a number of initiatives seeking to establish a close relationship between Australia and Asia, most basically of course on economic and trade grounds more than anything else.

What's been happening during this time in Asia, itself, is extraordinary, because if you look around the different countries, there is such a consistency of commitment to science and technology as the tools for future development. The case of Korea is a classic, outside Japan, which is a case we all know. In the case of Korea, they started in the early '50s with a per capita income very similar to that of India, a level of poverty that was crippling, a number of graduates in the country that I think after Japan left which was a total number of 40. From that base, by steadily using science and technology effectively, they are now in a position whereby this year, this year, they expect to have a higher level of information-based employment than any other kind of employment. But by the year 2000, they expect to be a developed country.

Korea has been another major model as well as Japan. But you look beyond that, you look at China, there's extraordinary power that's developing, even though there has been limitation on political democracy, there's been extraordinary enterprise in technology development over the course of the last three or four years, particularly in China. In the case of Malaysia, the Prime Minister's plan which is called the 20-20 plan - in other words, implying vision as well as an actual 30-year timescale - is a plan that has evoked tremendous commitment in the development of science and technology. And they have very recently, for example, taken out an Asian Development Bank loan of $A50-60 million, specifically to upgrade their training programs.

Take the case of Indonesia - the same thing. Related to the 25 years of the President's tenure, Indonesia is now looking forward to the next 25 years, claiming that they have already built at least the basic platform for this development, and now putting an extraordinary amount of money into real commitment for science and technology development. From the World Bank and Japan alone, there are three programs which together totalled something like $250 million for training people and building up their basic infrastructure of science and technology; in other words, what you find behind the power of Asia, is an extraordinary evolving commitment to science and technology.

Now, if Australia doesn't pay attention to this, it's crazy, because in Australia we have an extraordinarily good scientific establishment and, therefore, it seems to me that where Australia's relationships are starting to go and can go very much further in our relationships to Asia, our linking what we are good at - namely our ability to add value to science and to knowledge - to the ability and the commitment of the countries, to add extraordinary value and into the markets that they're already penetrating.

JOHN MERSON: Throughout the 1980s, while the media entertained us with the spectacle of local entrepreneurs, with the business ethic of the Beagle Boys, strutting the world stage and losing large amounts of other people's money, a small number of innovative Australian companies decided to embark on a revolutionary course of tapping our scientific and technological research to make things people need and to sell them internationally. Soon sales of Australian medical and industrial technology were notching up levels as high as our grain sales to the Asian region, of over a billion dollars a year. Companies like Nucleus which pioneered the development of the pacemaker and the cochlea implant; Solahart which applied photovoltaic research for heating and electricity; and the CSIRO's Interscan landing system which has become the standard at airports throughout the world. These achievements rarely got a mention in the financial press which seemed far more interested in the contributions to the Australian economy of the likes of Bond, Skase, Elliott, and Connell.

Few Australians and even fewer politicians seem to be aware of the international standing of our scientific and technological research. A recent OECD survey provides some interesting insights. Australia with a quarter of one per cent of the world's population ranks fifth in the world in terms of its contribution to agricultural and veterinary sciences; equal seventh with Italy in its contribution to engineering and technology; and sixth in the world, ahead of Japan, in its contribution to environmental and earth sciences, and oceanography.

If one then looks at citation indices which provide a qualitative measure of just whose research is being used around the world, then the levels are even higher. For instance, Australia outperforms Germany, France and Japan in clinical medicine; the United States, Germany and France in biology; and in chemistry, earth and space sciences, Australia outperforms Britain, West Germany, France and Japan. Now while the Australian business community has shown little interest in the commercial benefits that might flow from this research, there is considerable interest overseas, particularly in Asia. Monitoring the industrial and technological development of the ASEAN countries is Dr Jurgen Hillick, the Director of UNESCO's science and technology office in Jakarta.

JURGEN HILLICK: All these South-East Asian countries which we are serving and, in particular, the ASEAN countries - the Philippines, Malaysia, Indonesia and Thailand - they want to industrialise through massive application of technology, and that's what we call the technology-led development with science playing an important role, but only, I would say, as a support service. But science will be developed better and put at a more of a sizeable base as resources become available. But the Asian countries will not do like, for example, the East European countries have tried to do, that is, develop science and technology and then look how that would eventually penetrate the economies; so that we call the science push. The science push theory, I think, has proven not to be as effective as what we call the technology-led development.

JOHN MERSON: The problem with this strategy is that it relies on the ability of ASEAN countries to offer cheap labour, low environmental standards, and special economic zones to attract multinational corporations to set up their production bases. In this way, government planners hope to get access to advanced industrial technology, capital, and the expertise to develop their own manufacturing industries, like Korea and Taiwan.

But the economic, environmental and social costs of this form of export-oriented industrialisation has not always been properly represented, despite the fact that it's been widely promoted by the International Monetary Fund and the World Bank. Dr Walden Bello from the Philippines is Director of the Food and Development Institute in the United States, and the author of 'Dragons in Distress' - a new study of the development strategies pursued by South Korea and Taiwan, countries often regarded as a model for the rest of South-East Asia.

WALDEN BELLO: Basically, the idea or the ideal or the dream of technocrats in those countries that they would shift from cheap labour to more high-tech production processes producing high-tech commodities, because they would have the capability of developing high technology just has not come to pass. And it has not come to pass for two things: one is that the Japanese have been extremely reluctant to share technology, and if they have transferred technology, they have transferred mainly obsolete technology, and they have transferred technology in its package form, not in the form in which people can in fact learn, to take apart the technology and reproduce it. The second thing is that those countries haven't really developed their RD structures, you know, the levels of investment in RD are very, very low in both Taiwan and Korea.

In Korea, the conglomerates have preferred to reinvest their profits, not in RD, but in real estate and in playing the stockmarket. So, Koreans now talk about the 1980s, although it was a decade of high growth rates, it's also the lost decade because they never really reinvested their profits in research and development which would have led to a self-sustaining technological base. So the fact then is that you have basically Korea and Taiwan not having graduated from being assembly sites for Japanese components using Japanese technology. Just to take a few examples: the Hyundai Excel, which is one of the best selling cars in the United States, its engine is designed by Mitsubishi, and its engine and its transmission is Mitsubishi manufactured, and the body styling is Italian. Sure, Hyundai integrated those different things, but that's not what we call technological innovation. More than 95 per cent of the value of a Korean lap-top computer is accounted for by Japanese components, and even Korean colour television sets - 85 per cent of their value goes back to Japan. Korea being the fifth larger exporter of personal computers, and yet only the computer cabinet is actually manufactured in Korea. So, you have a situation in which the technological dependence on Japan has increased rather than decreased over time.

The other element that makes it really fragile is that they've lost the cheap labour advantage to South-East Asian countries. A textile operator in Taiwan is about $US3.87 an hour compared to one in Indonesia who makes about 25 cents, or to one in Vietnam who probably makes even less than 25 cents an hour. So clearly what they are beginning to confront is that not only Japanese and American multinationals but local entrepreneurs are moving many of their labour intensive industries out of Taiwan and Korea towards more 'hospitable' sites in terms of cheap labour.

JOHN MERSON: An example of what Walden Bello is talking about is shown in a recent study carried out at the Bandung Institute of Technology in Indonesia. They surveyed the contractual conditions that apply to the transfer of technology by Japanese, American and European multinationals who had recently established manufacturing bases in the country. Dr Amanda Katili is a Director of the Science and Technology Policy Unit at BBPT, the powerful research and planning agency that advises Indonesia's Minister for Technology and Research.

AMANDA KATILI: They did research in Bandung on the requirements from the multinational corporation. So these are the requirements that the Indonesian company has to fulfil. They cannot export their production to other countries, except decided by the principal. And then they have to guard the technology, they have to keep the technology secret until after the agreement finished, and then of course it would be outdated. And then this is the most important thing: the local company cannot make the similar products, and then to modify a product they have to have agreement from the principal company. And the local company cannot use their own trademark or their own brand. For example, Toyota, you cannot build a car and not use Toyota's name. And then this is interesting: if they modify it or if they find a technology that is really applicable, they have to give it to the principal company.

JOHN MERSON: Any innovation that takes place essentially benefits the parent company. How many agreements from this survey fitted into this sort of category?

AMANDA KATILI: The biggest percentage is to keep the technology secret - 62 per cent is to keep the technology secret. I don't know how many company they did survey on - maybe most MNCs.

JOHN MERSON: Dr Amanda Katili and some of her colleagues at BBPT. A good example of the problems faced by countries trying to develop their manufacturing industries is that of the Astra, one of the most popular cars produced in Indonesia, and made by Toyota. Now while the Indonesian Government wants Toyota to do more than just assemble cars from parts made elsewhere, Toyota quite reasonably argues that even if it were economically feasible, there is not the skill level or the industrial base in the country to support such a venture. It's a bit of a double bind and is reflected in the industrial work force employed by Toyota and other multinationals - it's primarily unskilled and female. Highly trained science graduates and engineers are not much in demand in these sectors.

We've had a similar problem here, in Australia, where until quite recently creatively talented people had to go overseas to find satisfying careers at the centre of industrial innovation, in Europe or the United States. Stephen Hill again.

STEPHEN HILL: One of the biggest dangers for small countries of being involved in something like a world car production, for example, is that whilst it's fine for that country to produce the clutch system for that world car, if the company that's actually controlling the rest of the car around that clutch system, decides not to purchase your clutches because, in fact, they've got you in their clutches and they've decided to move somewhere else, then, quite frankly, you have no-one else to sell it to. You are caught as a country. If no technology is transferred, if no other industries are built up by that country around its clutch-base system that it's operating, it is entirely and continuously dependent on the multinational that controls.

Multinationals have an ability that economic trading blocs never have, and that is that they have an organisation structure which can be immensely efficient across national boundaries, where it can transfer people very easily. They do not require visas to go from the New York to the Jakarta office of General Motors, for example. They simply go there on an aeroplane. It requires, therefore, no visas to cross national boundaries with the very latest of technological thinking. It requires no visas of scientific knowledge for those companies to be able to build up capabilities very fast, in a new enterprise elsewhere, and to take them back home again exactly when they want.

JOHN MERSON: Or shift them to a cheaper market, say, from Indonesia to Vietnam if the price is better.

STEPHEN HILL: Precisely. And what that suggests to me is a strategy that any country, quite frankly, that's involved in international global economic or technological development must follow, and it is a technological strategy. It's one that says whatever technologies are imported into this country or whatever capabilities or knowledges are built up, that we must add value to those things and develop industries around them that are equally able to develop those capabilities if, for example, that multinational goes away.

JOHN MERSON: To counter the vulnerability of becoming just a high technology assembly site, both Indonesia and Malaysia have set up strategic industries funded by government. In Malaysia, it's car production, and in Indonesia - transportation, which even includes an aerospace industry.

Indonesia's aircraft industry was the brainchild of Dr B.J. Habibie, a brilliant engineer who gave up a senior executive position in the West German aerospace giant Messerschmitt, to become the Minister for Technology and Research in 1974. In 1976 under his sponsorship, the state-owned factory, IPTN, won a contract to assemble small helicopters for a number of European manufacturers. However, the first major move into full-scale production came in 1979 when IPTN signed an agreement with a Spanish aircraft company, CASA, to produce a 30 to 40 seat aircraft to be manufactured in both countries. Since then, IPTN has gone on to win the approval from Boeing to bid for its component manufacturing contracts. The aircraft industry now employs 12,000 skilled workers, 2,000 of them are graduates. However, many economists looking at the costs of setting up an indigenous aerospace industry in a relatively underdeveloped country like Indonesia, regard Habibie's approach as economic lunacy.

STEPHEN HILL: Dr Habibie's strategy had a number of components in it, and I think they're very important ones. One of the first reasons he developed the aerospace industry in Indonesia is, of course, it's economically practical for Indonesia. It has many islands; it's very efficient for it to develop its own aeronautical capability to get around the islands. Secondly, it's a strategic capability, and this provides both political as well as economic benefit for developing a strategy which includes aerospace and other areas as well within the country. But thirdly, and this is very important, Dr Habibie regards it as symbolically important. In other words, if he can demonstrate through Indonesia developing an aerospace industry that Indonesians can produce aeroplanes, then it provides a very important symbolic boost to the drive of Indonesian scientists and technologists and employed people to believe that they can do what any other country can do; in other words, it removes the inferiority complex. And finally, and this is perhaps, I suppose, ultimately the most important, the sort of strategy of developing aerospace industries and communication and transport industries and more sophisticated energy-based industries, for example, in Indonesia, is that they are seen to be key vehicles for industrial transformation in the development of Indonesia.

Now, my personal view is then there is still other work that needs to be done. Indonesia is working, I think, very effectively on developing its scientific and technical skills. It's investing at least 270 to 300 and more million dollars in training of highly sophisticated scientific and technological people. Where in Australia are we putting that kind of boost into faith in our scientific infrastructure? Indonesia has enormous faith in that sort of capability and its importance for its development; that's important.

But in many developing countries, and Indonesia is no exception, there is often a real problem in linking the very highly sophisticated technical sectors with the very low-level, unsophisticated technical sectors. And it's a linkage that is very often technical and technological and is often forgotten in the development strategies, so that there is always a danger in many countries - and Indonesia may have to confront this stage unless it is careful - of the development of sophisticated industries which increasingly displace the unsophisticated industries rather than link with them. Very often the problem is quite specific. It is that the capability or the quality of the less sophisticated industry products will not fit into the highly sophisticated industry's product inputs, and the result of that is they must import them, as opposed to use or upgrade the low-level technical abilities.

JOHN MERSON: This has already surfaced as a key problem for Indonesia's aircraft industry, for while the state-owned factory IPTN is able to produce at a level acceptable to the most stringent of international standards, local subcontractors are not. Dr Joko Horudie is a leading consultant on science and technology to the Indonesian Government, and believes that the dispersal of skills from state-owned industries to such subcontractors, can begin to bridge the gap between the advanced and local sectors of industry.

JOKO HORUDIE: If this industry could have what you call subcontracting activities so that other small or medium industry could supply parts to the aircraft industry, what I can see it will happen if people who have been working at these companies, will leave in a good manner, in a positive manner, will leave these companies and setting up the companies knowing exactly what is needed and what kind of qualifications have to be met because the difference is of standard quality assurance of this company, you know, is very much different. From one side, if you are talking about aircraft, you have to produce according to the standard internationally, and subcontractor that supply it, should also having the same standard. And this is agreed that one of the problem that we are now facing.

JOHN MERSON: Yes, you're not getting that quality in the subcontracting.

JOKO HORUDIE: Not in that state yet, no.

JURGEN HILLICK: You mention two cases, you mention car production, the Proton Saga in Malaysia, and you mentioned the kraft industry here, in Indonesia. While maybe there are similar motivations behind, I think what the Malaysians did was perhaps a more down to earth, practical and more accessible experiment which has become extremely successful, because the Proton Saga is now the most widely produced and driven car in Malaysia, with waiting times of up to four or five months; and it has even been exported now, to several countries. So, one can consider this to be a rather successful experiment which is largely built on our own development, as far as the body of the car is concerned. They are not yet advanced enough to develop the engine through. The engine comes from Japan.

Now in the case of Indonesia, it's a little bit more complex, and aircraft industry is really high-tech at its best, if you want to be competitive, and it's perhaps too early to say whether it will succeed, to which extent this experience can reach out other sectors. Economically speaking, it certainly hasn't shown any signs of pay-off, and it will be a little bit like, perhaps, the Concorde in France - take a long time until one can even think of pay-offs. But if Indonesia succeeds to commercialise these planes, the pay-off may be of an indirect nature and may be very important, and if it was only due to the fact that the country could say 'We have shown that we are capable', and that means we can repeat this experience in other fields.

Certainly, the massive training and education of thousands of highly qualified engineers will perhaps be a useful input when you want to generalise this experience throughout the economy. So, I would be moderately optimistic, but at the same time, it is true such initiatives, of course, absorb enormous amount of capital.

ROBYN WILLIAMS: Dr Jurgen Hillick, and you're listening to a Science Show special on our future with the young tigers. Your presenter is John Merson and your network is Radio National from Jakarta to Hobart.

JOHN MERSON: As Indonesia and the other countries of the ASEAN region expand their industrial base, the demand for scientific expertise and technological resources will also rise. In this respect, we in Australia have an enormous opportunity to capitalise on our intellectual resources and research experience that's been built up in the CSIRO, university research institutes and the private sector. But if we are to be effective in this regard, there are going to have to be some changes in the way in which we approach the marketing of our scientific and technological capabilities.

STEPHEN HILL: What has often tended to happen is that Australian scientists have had a view that they connect into the international scientific fraternity or sorority by going to other places, by visiting laboratories, particularly of Britain and the United States, and effectively sharing in a pool of ideas, rather than being concerned about the commercial enterprise that follows from those ideas.

In the case of Asia, many, many cases we keep coming across, we find scientists, as it were, wandering into laboratories and giving it all away, rather than developing any kind of understanding of the commercial implications of what they're actually doing. Now, I'm not saying we should be secretive; that's increasingly becoming the character of world science, that it is becoming secretive. It's becoming international through multinational organisations rather than a general pool of knowledge. We have to be aware of that, but we can seek strategic alliances and we can do that effectively, if we know what we're doing. To give you one example: I was recently on a mission with Australia to China to look at the establishment of scientific relations in a number of areas. Now one area where we have sought and established at least the start of scientific relations, is in the area of rare earth development. Now between us, Australia and China control 90 per cent of the rare earths that are produced in the world. Rare earths are extremely and increasingly useful in new materials, in the manufacture of aeroplanes, in the manufacture of a whole range of new technologies which are being developed. Now, if we control 90 per cent, we should well control the majority of value added to these raw materials, but we don't - China nor Australia. That's controlled far more in Japan and in France.

Now therefore, what we found we were good at and the alliance which we hope we can establish or continue to establish is one where we found China was very good at the technology development of basic material manufacture in rare earths. They were very innovative and they were very capable and quite straightforward but very well developed technologies. Australia, on the other hand, was very good at new products using rare earths. And so what we're trying to do is to form an alliance where Australia's ability to do the research at the basic front end of potential product development and China's pragmatic, innovative capabilities come together with a resource which is really a strong resource for both our countries where we actually form an economic and scientific alliance. Now that's the kind of program we should look at.

JOHN MERSON: It's also what other countries in the region are looking at. To avoid being one step behind industrially, with largely redundant technology being transferred by the multinational corporations, then they must find access to a source of research and development. Now as Stephen Hill mentioned, most of the countries are spending large amounts of money on education and training, but this investment will take a generation to pay off, in terms of establishing a research culture that can deliver original products or processes. In the meantime, they will continue to have to look abroad, as they have done traditionally, to find technological expertise, or enter into joint research and development projects.

Jurgen Hillick has noticed a significant change in attitude taking place towards greater regional interdependence.

JURGEN HILLICK: Whenever I go to meetings and so on, there is one general way of thinking, and that is the region should much more than hitherto use the resources available from within the region, and not only capital, but also the intellectual resources. And it is felt by many people who are very knowledgeable about this, that, indeed, the region has more, perhaps, than enough to deal with its problems, and it does not have to have recourse systematically to Americans or to the Europeans and, of course, the Japanese are a special case, but we would still think they are part of the region and a very strong partner there. Now, Australia has, I think, a very good position in this. From my own experience and work I can say that the ASEAN countries, for example, are very keen to be more closely connected with Australia, with Australian universities in particular, because they feel that they offer training facilities and research facilities which are very well adapted to the needs of the countries here. Perhaps the Australian scientific institutions and also the Government are not pursuing all these possibilities vigorously enough. I understand that there have been quite dramatic changes in the way in which Government wants universities and scientific institutions in Australia to operate. I wonder whether this strong emphasis on economic aspects, on contract hunting, is necessarily enabling the Australian scientific institutions in universities to be as receptive and as generous as the developing countries in the regions would perhaps expect. But that being said, I know, personally, that the volume of interaction between Australia and countries in the region is already very great. We in UNESCO try to involve Australian scientists wherever we can, and many major initiatives which we are now pursuing here, one, for example, for the development of a humid tropics program with particular emphasis on the hydrology of humid tropics, has originated from a big meeting in Townsville, a year ago, where Australian scientists are playing a leading role in shaping the basic [...]. So, we are trying now to develop new initiatives with Australia, so I would think that, yes, Australia can and should play a major role, and its role will be quite different from the role of Japan. Australia is perceived in a different way than Japan has been perceived in the region, and this difference in perception, I think, makes it easier for Australia to be co-operating with other countries.

JOHN MERSON: It's perhaps because we are not an economic superpower like Japan, that we're able to relate as an equal partner in development projects. Also because of our strength in the service sector, in education and in research and development, there is a growing awareness of the compatibility of our skills and resources, as Stephen Hill has pointed out in the case of China.

In relation to Indonesia, there are growing areas for collaboration. While most people know about the massacre that happened in Dili a few months ago, few are aware of the environmental devastation that has been going on in the whole eastern region of the Indonesian archipelago. Population growth and the clearing of timber on marginal land has led to immensely damaging erosion, the siltation of rivers and the destruction of coral reef systems and fish populations. Because of the similar ecosystems in the north of Australia, we have the scientific knowledge and skill in environmental management needed to establish some sort of sustainable development in the region. That at least is the view of Dr Emil Salim, Indonesia's Minister for the Environment, who has recently approached the Australian Government for scientific and educational support in dealing with this problem.

EMIL SALIM: What I like to see is making optimum use of the Australian comparative advantage, and I feel we share a common dry land ecosystem: Northern Territory and Western Australia with the west Nusu Tenggara Island, east Nusu Tenggara Island - then East Timor. Now if that is the case, then the problem is how can we raise food production and the welfare of the people by making use of the skill of the Australian in a dry land ecosystem environment?

JOHN MERSON: You mentioned that the problem was erosion.

EMIL SALIM: Yes.

JOHN MERSON: What has been the cause of that? Is it population pressure or the agricultural practices, people have been forced to try and get more from the land in conditions that really didn't sustain it? Is that the problem?

EMIL SALIM: One, there is pressure of the population, pressure of the cattle, and the fact that there is a short rainfall and, therefore, people cannot make use of the land, have only one season during the wet season, and it is very short and, therefore, there's a pressure to over exploit the land resource, plus the fact that we have cattle that is over grazing, and thirdly is that the soil itself is highly erodible. So the question is: how can you have a development in that eastern part of Indonesia which is under pressure of erosion and, of course, also poverty and shortage of water. Now, I have, therefore, a proposal of a kind two-prong approach. One approach is that an expertise is provided having experience in this dry land ecosystem to be attached, one, in my office in the central government, but also an expert attached to the regional government, and that regional government translate this overall policy in a regional context. And then it goes also to identify those Indonesians who need to be trained to take over the job that initially is being done by these Australian experts. This is one.

The second strategy is how to provide training for those Indonesian officials, informal leaders, NGOs at the district level. In the three province, I'm toying with the idea that we have in Mataram and in Kupang and perhaps also in Dili, a kind of a course in which expertise from Australia will train the Indonesians at the district level of how to develop dry land ecosystem, agricultural plantation, animal husbandry, as well as fishery.

JOHN MERSON: It would seem logical if Australia wants to extend its commercial influence in the region, that grassroots projects like that outlined by Dr Salim are also greatly needed. In the last couple of years, the number of collaborative projects with Indonesia and the Asian countries has increased. The Australian Institute of Marine Sciences in Townsville, is engaged in a joint ASEAN study of mangroves which play an important role in sustaining fish populations in the region. The joint Timor Gap exploration agreement on oil and natural gas could be of enormous commercial importance. DITAC and BBPT - Indonesia's technology ministry - late last year reached an agreement on commercial exploitation of Australian products and research. Telecom has become involved in software systems for telecommunications, and OTC for satellite systems.

One of the most controversial issues that links Australia to the ASEAN region is the management of dwindling tropical forests. In Queensland, Malaysia, Indonesia, the Philippines and Thailand, there have been acrimonious and often violent disputes over the exploitation of timber and other forest resources. As has been demonstrated in the case of the South American forests, the potential resource in terms of new products, drugs and chemical agents, locked within the biological diversity of these tropical forests are immense. How they can be developed in a sustainable manner is of great economic, environmental and political significance to the region. Dr Emil Salim again.

EMIL SALIM: The proposition is that tropical forest is a renewable resource, so the crucial issue is how can we exploit forest resource on a sustained yield basis. So what ever research that is needed is how to improve the possibility of exploiting the forest resource sustainably. This is one line that we must always explore and improve. When this is being done, recognising that forest is a renewable resource, then we don't need to worry about this. There's another point that exploiting forest resource, even on a sustained yield, will still affect the ecosystem and, therefore, affecting the bio-diversity. Therefore, you set aside region for not to be exploited for whatever reason - mining, forest, plywood, and so on - it need not be exploited. But if it's not being exploited for the sake of conservation, for the sake of bio-diversity, the next question will be: what do you use this for? So while you make use of this unexploited forest for research in order to develop this genetic resource into pharmaceuticals, into food, into whatever other purposes now. This is needed.

We have set aside out of the 144 million hectare of tropical forest, 48 million hectare of protected forest, of forest that is not to be exploited, but I understand the questions raised by the governors in the region, what do you do with this tropical forest? It has genetic resource; it has flora; it has fauna. So what is the benefit for the local people? And here I feel that we should co-operate with advanced developed countries in order that the capacity of bio-diversity is to be combined with the capacity of research in developing, transforming this gene resource into pharmaceuticals, foods and so on. So all this, my worry is that the world is looking to environment independent of development and, therefore, I like to draw attention that even the United Nations is now preparing a United Nations conference on environment and development. So we should not separate these two: environment and development. We should have both together. So how to make use of tropical forest? - by exploiting it for development on a sustained yield, meaning you combine environment and development.

JOHN MERSON: Dr Emil Salim, Indonesia's Minister for Population and the Environment. Apart from obvious historical and cultural differences which separate Australia from Asia, we do have a far wider range of common interests than we realise. Australia is the only genuinely liberal and pluralistic political culture in the region, and as Gareth Evans has demonstrated in Cambodia and in the APEC negotiations, the irritating appendix of Asia may have its use after all. Equally, if we have the wit to apply our scientific and technological capabilities, then we will also be the beneficiaries of the economic development that is occurring throughout the region. The 1990s has been described as the decade of the Asia-Pacific; however, rather than continually congratulating ourselves in advance for being a lucky or the clever country, of being in the right place at the right time, we could well be advised to get off our collective butts and do something about the opportunities that are staring us in the face. For as O'Brien in Orwell's 1984 comments about destiny, the fates lead the willing, the unwilling they drag.

ROBYN WILLIAMS: So let's make sure we don't have to be dragged; it doesn't look good.