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Thursday, 14 November 2002
Page: 6410

Senator McGAURAN (4:13 PM) —by leave—I present the report of the parliamentary delegation to Indonesia and the 23rd AIPO General Assembly, which was held in Vietnam from 1 to 13 September 2002. I seek leave to incorporate a tabling statement in Hansard.

Leave granted.

The statement read as follows—

The delegation visited Indonesia between 1 and 6 September. The broad objective of the visit was to promote and foster relations between Australia and Indonesia and to examine the challenges that confront Indonesia over the short to medium term. The delegation met with a range of Indonesian government, private sector representatives and individuals to discuss:

· Islam, politics and security;

· poverty reduction;

· decentralisation;

· economic and trade reform; and

· electoral and constitutional reform.

Mr President, as part of the visit, the delegation met with Islamic leaders and visited Muslim educational institutions. The purpose was to gain a clearer understanding of the role and influence of Islam in contemporary Indonesia. In particular, it was possible to discuss the impact and response by Islamic leaders to the events of 9-11, and the role of Islam in politics.

The Islamic leaders indicated their opposition to violent conflict and suggested that their religion placed emphasis on developing moral values and spiritual well-being. In particular, they were opposed to the creation of conflict on the basis of religion and extremism.

In relation to the role of Islam in politics, representatives of the Muhammadiyah University commented that `Islam is not Indonesia'. Instead, Indonesians should focus on justice and the virtues of education. Background information suggests that Islamist political parties had yet to attract widespread political support.

Mr President, there are an estimated 40 million people in Indonesia living in poverty. There are more than 1 million internally displaced people (IDPs) who are now competing with a growing urban underclass for survival. The United Nations World Food Programme (WFP) operating from 1 July to 31 December 2003 will help 2.1 million Indonesians who face the highest risk of hunger and malnutrition.

As part of the itinerary, the delegation visited an AusAid sponsored United Nations World Food Programme Project in North Jakarta providing food aid to the urban poor. Mr President, the level of poverty and deprivation suffered by these people is profound.

It is estimated that the poor survive on no more than US$2 a day. They go without adequate food, water and shelter, and the provision of essential infrastructure such as running water and sewerage. The site that was visited consisted of about 2000 people living in small corrugated iron dwellings that were joined and tracked along a river bank. These people were occupying the area illegally. The WFP explained that these people have no access to government social support because they are `illegal settlers in a shadow existence on the fringes of the economy.'

The visit formed an essential part of the delegation's itinerary by clearly demonstrating the significant challenges confronting Indonesia. If possible, all Australian delegations to Indonesia should seek to visit a World Food Programme in order to better understand the extent of the problem and the valuable role played by the poverty reduction programmes.

Mr President, the policy of decentralisation is about the devolution of government functions away from Jakarta to the regions. Key decentralisation laws came into affect in January 2001, and devolve to district level governments most government functions, with the exception of foreign policy, defence, the judiciary, national planning and religion, to be assigned to the districts. The central government transfers 25% of its revenue to district level governments with some modulation to ensure equity across all districts.

The delegation explored some of the implementation issues and the possible impact of decentralisation upon the delivery of government services and investment. For example, regional administrations have the challenge of delivering programs and services. The Central government needs to develop systems and processes to ensure that services are being delivered according to agreed national standards, especially in the areas of health and education.

Mr President, Indonesia's growth rate is currently around the 3% mark. This is considered to be inadequate to generate sufficient levels of employment growth and help in the reduction of poverty. Some market economists suggest that growth rates of at least 6 to 7% are required to achieve sufficient employment growth. It is estimated that the current growth rate of 3% will result in almost 1 million people joining the ranks of the unemployed every year.

Some of the key issues affecting economic recovery include the level of government debt, decentralisation, and issues influencing investor confidence.

The delegation met with the Coordinating Minister for People's Welfare, Mr Yusuf Kalla, the Minister for National Development Planning Kwik Gian Gie and the Minister for State Owned Enterprises, Mr Laksaman Sukardi. One of the major themes during these discussions was economic recovery and Government debt.

The key problem with high levels of government debt is that it diverts revenue away from public programs designed to stimulate the economy. In addition to this are concerns about falling levels of private sector investment.

A key concern affecting investor confidence is the credibility of key public institutions and the impact of corruption, collusion and nepotism which Indonesians call KKN.

The delegation was advised that reporting and transparency in Indonesia has improved. The newspaper media seemed prompt in its reporting of alleged or proven cases of corruption. For example, the Jakarta Post of 5 September 2002 reported on the sentencing of the Speaker of the House of Representatives, Mr Akbar Tanjung to three years imprisonment for corruption. The court said that Akbar was convicted of misusing US$4.44 million in State Logistics Agency funds that were supposed to be earmarked for a poverty alleviation program, when he was minister/state secretary in 1999 under President Habibie.

Mr Tanjung has decided not to stand down while he appeals the decision with the Jakarta High Court.

Mr Tanjung attended the 23rd ASEAN Interparliamentary Organisation (AIPO) General Assembly in Hanoi, Vietnam between 8-13 September 2002. The 24th AIPO General Assembly will be held in Indonesia in September 2003. Under the AIPO statutes, Mr Tanjung became President of AIPO at the conclusion of the 23rd General Assembly.

Mr President, the final issue that was examined during the delegation's visit was constitutional and electoral reform. The recent annual session of the MPR held in August 2002 finalised a series of constitutional reforms. These reforms are due to take effect before the 2004 elections. The key reforms include:

· the creation of a two chamber legislature comprising the House of Representatives (DPR) and the Regional Representative Council (DPD) which will function like a Senate. The DPR and DPD sitting together will form the MPR with the power to amend the constitution;

· removal of 38 seats reserved for the military and police who will under the reforms have the right to vote; and

· direct election of the President.

The DPR now has the responsibility of framing legislation to implement these changes. The DPR's Legislation Committee has indicated that the DPR will give priority to the bills directly relevant to the elections in 2004, on political parties and on general elections. Bills on direct Presidential elections and the new structure of parliament which have yet to be drafted will be fast tracked.

Mr President, in concluding this section, the Parliamentary delegation to Indonesia fulfilled its primary objective of promoting parliamentary relations between the two countries. A range of meetings were held with key parliamentarians, parliamentary committees and Government Ministers. Through these meetings it was possible to discuss some of the key issues facing Indonesia during the short to medium term.

Mr President, Australia's interests are linked to Indonesia's stability and prosperity. In support of this goal, Australia provides aid assistance to Indonesia which is currently estimated at $121 million in 2001-02.

Mr President, the 23rd AIPO General Assembly was held in Vietnam between 8 and 13 September 2002. Parliamentary representatives of eight ASEAN countries, two special observer countries, and eight observer countries attended the Assembly. The Assembly provided a forum from which to examine, discuss, and propose solutions to issues of common interest throughout the Asia-Pacific region.

One of the major features of the General Assembly was the Dialogue Session during which representatives of the ASEAN member countries discussed issues with the observer countries. During Australia's Dialogue Session, the key issues examined included:

· regional and political matters;

· trade and investment issues;

· educational and cultural cooperation; and

· scientific and technology cooperation.

Regional and political matters

Mr President, the key discussion issue raised during this part of the dialogue session focused on Australia's level of integration with Asia as opposed to Australia's ties with Europe. The Australian delegation explained that Australia's commitment and integration with Asia is substantial and growing. On a trade basis, North Asia and South and South East Asia combined, account for almost 60% of Australia's merchandise exports. Trade with Europe only accounts for 13%. In relation to aid, Australia committed an estimated $376 million to ASEAN in 2001-02.

The Lao delegation highly appreciated Australia for maintaining good relationships and being a strong supporter of ASEAN and AIPO especially in the area of strengthening economic integration, particularly with new ASEAN members

The Cambodian delegation requested Australia to continue to send observer teams to Cambodia to observe the national elections to be held in July 2003.

Trade and investment

The member countries of AIPO expressed their appreciation at Australia's level of trade and investment in ASEAN countries. Representatives of Singapore, Vietnam and Indonesia suggested that Australia should seek to increase the level of trade and investment where possible.

Educational and cultural co-operation

Mr President, it was acknowledged that Australia and ASEAN have good cooperation in education and cultural issues. During 2001, for example, there were about 70 000 ASEAN students studying in Australia. In August 2001 the Australian Government and the World Bank launched the virtual Colombo Plan with an Australian contribution of $200 million over five years. This joint initiative seeks to use information communication technologies to address the causes of poverty.

Scientific and technology cooperation

Developments and innovations in the area of science and technology, particularly information communication technologies, can contribute to development through enhancing education and training. These aspects of science and technology were understood by all delegates. The delegation suggested that Australia should enhance its technology transfer to ASEAN countries. In particular, the Vietnam delegation suggested that as Australia's farm practices are sophisticated, it should share its agricultural knowledge with ASEAN countries.

Meetings and inspections

Mr President, because Australia is an observer country to AIPO it does not have to attend all sessions of the conference. In view of this, the Delegation, with the assistance of the Australian Embassy, Hanoi, Vietnam, attended a series of meetings and inspections.

The majority of these meetings were with non-government aid organisations which were receiving aid money through AusAid. These meetings provided an opportunity to appreciate at first hand some of the aid projects that are supported by Australia. The focus was on their effectiveness and their contribution in assisting with development objectives.

Mr President, in conclusion, the Australian Delegation's attendance at the 23rd AIPO General Assembly was very successful, and the Australian Parliament was ably represented. In addition to attending the General Assembly, the delegation attended 29 meetings during its visit to Indonesia and Vietnam.

I would like to express the Delegation's appreciation to staff of the Australian Embassies in Indonesia and Vietnam. In particular, the then Ambassador to Indonesia, HE Mr Rick Smith provided the delegation with comprehensive policy advice. In addition, Ms Kate Callaghan deserves praise for developing an effective itinerary which more than met the needs of the delegation. On arrival in Hanoi, Vietnam, the delegation was provided with excellent support from HE Mr Joe Thwaites and his staff. In particular, Ms Sandra Henderson deserves praise for supporting the delegation and developing a time effective itinerary.

Mr President, I commend the Report to the Senate.