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OUTCOME 1: Australia's national interests protected and advanced through contributions to international security, national economic and trade performance and global cooperation

Output 1.1:
Protection and advancement of Australia’s international interests through the diplomatic network and Canberra-based activity

Output 1.2:
Provision of policy advice and analysis to portfolio ministers

1.1.2 & 1.2.2 SOUTH AND SOUTH-EAST ASIA

EFFECTIVENESS INDICATORS

Transition process to a stable and more democratic Indonesia supported following the national elections and good lines of communication maintained with the key political players.
Significant Australian contribution made to developments in the East Timor issue, including through ongoing dialogue with Indonesia and the East Timorese.
Stronger partnerships developed with emerging South-East Asian powers including Thailand, The Philippines and Vietnam through expanding bilateral trade, investment and strategic relationships, and cooperation in regional forums.
Bilateral relationship with Malaysia managed effectively, while building on a successful Joint Trade Committee meeting to reinforce the bilateral economic relationship.
Australia’s economic and regional security interests advanced in South Asia in partnership with countries of the region, particularly India; steps taken to normalise relations with India and Pakistan in support of these interests, consistent with positive movement by these countries in relation to nuclear testing.
Support provided to regional efforts aimed at enhancing the effectiveness of Association of Southeast Asian Nations as a forum for open discussion and debate on transnational and regional economic, political and security issues.
Contribution made to international efforts to promote human rights, democracy, economic reform and development in Burma and Cambodia.

Overview

Historic developments in Indonesia and East Timor dominated the department’s South and South-East Asia agenda over the year. The high level of public and parliamentary interest in these issues reflected their importance for Australia, and the department was extremely active in pursuing Australian objectives and interests.

The resolution of the East Timor issue was the Government’s most prominent foreign policy priority in the latter half of 1999. The department devoted considerable resources to assisting the ballot on East Timor’s future on 30 August 1999. In the wake of the violence that followed, we supported ministers in galvanising international support for the International Force in East Timor (INTERFET). We also coordinated a major Australian effort to support the UN Transitional Administration in East Timor (UNTAET) process and East Timor’s progress towards independence following the clear choice of the East Timorese people.

Indonesia experienced the most profound political change since independence, including the election of President Abdurrahman Wahid and significant progress in the transition to a more democratic, less centralised political system. Australia’s involvement in the East Timor crisis caused strains in the bilateral relationship with Indonesia. The department maintained and developed links with key players in Indonesia with a view to rebuilding a constructive relationship based on mutual respect.

Although indications of economic recovery in South-East Asia were mixed, the department focused on further developing bilateral relations to advance Australia’s strategic, political and commercial interests in the region. We maintained an effective dialogue with the Association of Southeast Asian Nations (ASEAN), recognising its role in building a more cohesive, prosperous and stable region.

In South Asia, we made a key contribution to the normalisation of relations with India in line with Government policy. Visits by ministers and senior departmental officials helped develop momentum in the bilateral relationship. The military take-over in Pakistan created challenges for the management of important bilateral trade and immigration issues in that relationship.

Australia’s Ambassador to Thailand, Mr William Fisher, and the Governor of Samut Sonkram province, Mr Kongsag Lewmanomont, lead officials from the Australian Embassy in planting seedlings in Tambon Klong Kone to help restore mangrove forests.

Indonesia

The department built on our support for the June 1999 Indonesian general election by establishing early and strong contacts with leaders of the successful political parties. Consequently, at the time of the presidential election in October, lines of communication were well established with all the leading contenders. Once a government was established we quickly made, and have maintained, contact with the President, Vice-President and cabinet ministers. Despite anti-Australian sentiment in the wake of events in East Timor, this approach enabled a pragmatic continuation of major planks of the relationship and helped pave the way for Mr Downer’s visit to Jakarta in January 2000. It also helped to encourage Indonesian cooperation with Australia on people-smuggling issues and to minimise threats of trade sanctions against Australia that were being advocated by some in Indonesia.

The department worked closely with Indonesian importers, Australian exporters and the ACTU to minimise the risk of trade boycotts immediately following the East Timor ballot. Despite the threats, there was no significant disruption of bilateral trade. We also supported ministerial efforts to maintain strong trade ties with Indonesia, including Mr Vaile’s early meetings with members of the new Indonesian Government. Mr Vaile met the Minister for Trade and Industry, Mr Yusuf Kalla, at the World Trade Organization (WTO) meeting in Seattle in December 1999, and Mr Kalla’s replacement, Mr Luhut Panjaitan, in Darwin in June 2000.

The department supported visits to Indonesia by Mr Downer in January 2000 and Mr Ruddock in February 2000, which helped Australia re-engage with Indonesia following the strains over East Timor.

East Timor

The department made a major contribution to the resolution of the East Timor issue. We played a pivotal role in coordinating Australia’s support to the UN Mission in East Timor (UNAMET), which organised the August ballot. Australian assistance comprised $10 million to the UNAMET Trust Fund and $11.5 million in in-kind contributions through the aid program. We encouraged international engagement in the UN’s efforts in East Timor, including urging donor contributions to UNAMET.

We also managed the official Australian observer delegation to the ballot, providing logistical arrangements and briefings. The ten-member delegation, led by the Hon Tim Fischer MP, and including other members of parliament, government officials and non-government organisation representatives, contributed to international efforts to ensure a free and fair ballot.

On 15 September 1999, the United Nations Security Council votes unanimously in favour of the establishment of a multinational force under a unified command structure to restore peace and security in East Timor. The force (INTERFET) was led by Australia. UN/DPI Photo by Eskinder Debebe.

Following the violence and destruction after the ballot, the department provided strong support to the Government’s efforts to forge the broad coalition of countries that became the UN-mandated INTERFET and to ensure an appropriate mandate for the force in the UN Security Council.

Our involvement in establishing UNTAET included coordinating Australia’s significant financial contribution, lobbying other donors for support, and working to ensure its administration was appropriately staffed. The Australian Consulate, later Mission, in Dili was central to maintaining Australia’s close dialogue with both the Indonesians and the East Timorese, in often very difficult circumstances, as developments unfolded. We have continued to engage actively with UNTAET and key East Timorese leaders on East Timor’s path to eventual independence.

The department, particularly Australia’s network of overseas posts, played a crucial role in conveying to international and domestic audiences a clear understanding of Australian policy and objectives in East Timor. This was particularly important in the wake of some negative regional media reporting. We organised the visits to East Timor of several regional media representatives, ensuring high-level access to a range of interlocutors, which resulted in more balanced coverage of developments in East Timor.

Members of the East Timor Task Force receive the Secretary’s Australia Day citation for dedicated service in exceptional circumstances. Secretary’s citations recognise work units or groups of staff who have performed with distinction either on a sustained basis or during times of crisis. Pictured with the Secretary are (from left) Mr Adam McCarthy, Ms Michelle Chan, Ms Anne Witheford, Ms Carolyn Bull, Mr Simon Merrifield and Mr Paul Myler. Photo by Michael Jensen.

Partnerships with South-East Asia

With some signs that South-East Asia was beginning to emerge from its economic crisis, the department continued efforts to strengthen partnerships with the countries of the region.

Australia’s relationship with Thailand was marked by close cooperation and a commonality of views on many political and security issues. This was reflected in cooperation over East Timor and exchanges on regional security, both of which contributed to strengthening the relationship.

The department provided support for a number of successful ministerial visits to and from Thailand, including visits by Mr Downer and Mr Vaile to Thailand for a meeting of the Joint Ministerial Economic Commission. Our sustained efforts to secure better market access were rewarded with Thai tariff reductions on some products of direct commercial interest to Australia, including lupins and cotton. However, continued effort will be required to break down other goods and services barriers and to achieve liberalisation of foreign investment laws.

More information on the department’s analytical work on Thailand can be found in output 3.1, page 166.

We contributed to the Philippine–Australia Dialogue in November 1999, which articulated a vision statement for the future development of the bilateral relationship. In addition to reinforcing business and academic links between the two countries, the dialogue helped develop relationships between senior ministers. The disruption of Australian exports to the Philippines in early 2000 over differences on agricultural trade was a setback. We mobilised resources in Canberra and at post in support of the Government’s efforts to tackle the dispute, and Mr Vaile was able to announce on 26 June that agreement had been reached on a resolution to the problem.

The strength of our relationship with Singapore was underlined by the extensive ministerial and business contacts facilitated by the department. Visits to Singapore by the Prime Minister and other Federal and State government ministers contributed to the development of a network of contacts. We also facilitated the visit to Australia of leaders such as the Singaporean Deputy Prime Minister, Lee Hsien Loong.

In promoting business links, we concentrated on adding value to developing relationships, including in the information technology, finance, education and food sectors. As part of the Singapore Government’s liberalisation of the telecommunications sector, which the department has encouraged, two Australian firms, in conjunction with Singaporean partners, won new telecommunications licences. Singapore was a major contributor to the considerable expansion in Australia’s exports of pork during the year, the Singapore market taking pork products worth $93 million, up from just $9 million the previous year.

We provided substantial secretariat support and advice to the private sector Singapore Australia Business Alliance Forum. Seed funding from the department helped launch a Young Business Ambassador program that will strengthen business networks between young entrepreneurs in both countries and further enhance broad bilateral people-to-people links.

The department led efforts to consolidate and deepen Australia’s relations with Vietnam. Although Vietnam’s slowed economic reform process had consequences for Australian commercial prospects, we supported several successful commercial deals, including the granting of a life insurance license and a financial leasing licence to Australian companies. RMIT University was licensed to operate Vietnam’s first fully foreign-owned campus during Mr Downer’s visit in May 2000. The embassy in Hanoi was also instrumental in the settlement of the Vietcombank debt to the Export Finance and Insurance Corporation (EFIC).

In addition to our efforts on economic and commercial relations, we provided support for Mr Downer’s visit to Vietnam in May 2000. The primary purpose of the visit was to open Australia’s largest ever infrastructure development assistance project, the My Thuan Bridge over the Mekong River, but Mr Downer also discussed human rights, regional issues and trade and economic reform with the Vietnamese Prime Minister and other senior Vietnamese officials.

In Malaysia, our efforts contributed to the development of new areas of cooperation, including combating people trafficking and the management of cultural institutions. The Joint Trade Committee focused attention on barriers to bilateral trade and, while progress on bilateral market access issues was slow, Malaysia announced a range of global tariff reductions during the year—including on seafood, dairy products, and fresh and canned fruit—that will benefit Australian exporters. At the political level, good links were developed with the emerging generation of political thinkers and leaders. We also worked to strengthen practical cooperation over a range of areas in the bilateral relationship, supporting visits by Malaysian officials involved in the legal, education and trade sectors.

To complement this work and promote understanding of Australia’s engagement in South-East Asia, departmental officials gave public presentations of Australian foreign and trade policies to business, academic and public audiences at events such as the Australia–Malaysia Business Council meeting and the Malaysia Australia Conference.

The department also cooperated closely with the Department of Immigration and Multicultural Affairs (DIMA) in promoting cooperation with South-East Asian countries, including Indonesia, Malaysia, Thailand and Vietnam, to counter people-smuggling.

ASEAN and regional issues

The department supported Australia’s engagement with South-East Asia through improving region-wide links. Our efforts to remain closely engaged with ASEAN were rewarded with a revamped senior officials dialogue with ASEAN countries, the ASEAN–Australia Forum. We were instrumental in designing a new format for the forum, giving it a sharper focus on major political, economic and security issues. The meeting in June 2000 revitalised what had risked becoming a moribund institution limiting, in one important respect, Australia’s capacity to interact with ASEAN.

We also organised the Coolum Forum, an informal meeting of leaders from East Asian countries initiated by Mr Downer and jointly chaired by him and his Thai counterpart, Dr Surin Pitsuwan. The discussion focused on the impact of the East Asian financial crisis and gave participants an opportunity to exchange views fully and privately.

We continued to provide support for Australia’s participation in key regional forums, such as the ASEAN Post-Ministerial Conference and the East Asia–Latin America Forum. The forum is a valuable emerging process, reinforcing our regional credentials in East Asia and adding to our links with Latin America. Consistent with Australia’s engagement with the region, we closely monitored developments in the ASEAN plus Three dialogue (the ‘Three’ being Japan, China and the Republic of Korea), a process still in its formative phase but with the potential to improve regional cooperation. We have made clear that Australia welcomed the emergence of the ASEAN plus Three grouping and that we would be happy to join it at some later stage if invited to do so.

We sought to enhance regional economic linkages, including the promotion of initiatives to develop closer economic integration between the ASEAN countries and Australia and New Zealand.

Figure 10. Australia’s merchandise trade with ASEAN

Burma and Cambodia

We continued a carefully judged approach to Burma, enabling Mr Downer’s Human Rights Institution initiative to proceed to the point where the first human rights training workshops could be held in July, with another one to follow in October 2000. The workshops expose middle-ranking Burmese civil servants to international human rights concepts, instruments and standards. At the same time as implementing this innovative approach, we took care to keep Daw Aung San Suu Kyi and the Burmese opposition fully informed.

The department complemented the human rights initiative through direct representations to the Burmese Government about arrests and harassment of members of opposition groups, and other human rights violations. We supported human rights resolutions on Burma at the UN General Assembly and the UN Commission on Human Rights and a resolution on the use of forced labour in Burma at the International Labour Conference.

In Cambodia, the department gave priority to the consular case arising from the kidnapping and murder of Australian tourist David Wilson in 1994. We made regular representations urging the Cambodian authorities to bring to justice all those responsible for the murder of David Wilson, including joint representations with the British and French Governments to the Cambodian Prime Minister. Following the conviction last year of one individual in relation to the killings, another of the suspects was arrested in January 2000 and was scheduled to stand trial in July 2000. We kept the Wilson family informed of developments in the judicial processes in Cambodia and funded a transcript of the trial and conviction of the earlier accused, providing copies to the Wilson family, the Victorian State Coroner and the British, French and Cambodian Governments. We also cooperated closely with the Victorian State Coroner in the latter’s inquiry into the circumstances surrounding the death of David Wilson.

The department encouraged progress in Cambodia’s negotiations with the United Nations on the structure and modalities of a Khmer Rouge tribunal. We supported the reform process in Cambodia, focusing particularly on institution-building and economic management.

South Asia

The department played a key role in restoring strong relations between Australia and India, with agreement reached to restore defence relations and resume the full range of aid activities with India. We continued to urge early Indian signature of the Comprehensive Nuclear Test-Ban Treaty, while welcoming India’s continuing moratorium on nuclear testing and efforts to build a consensus in support of treaty signature. The first round of senior officials talks since the May 1998 Indian nuclear tests were successfully held and laid the groundwork for Mr Downer’s and the Prime Minister’s visits.

Mr Downer and Mr Singh

Mr Downer meets Indian External Affairs Minister, Mr Jaswant Singh, during his visit to India from 21 to 24 March 2000. The Australian High Commissioner, Mr Rob Laurie, AM, is in the background.

Bilateral trade with India declined from $2.50 billion in 1998–99 to $2.31 billion in 1999–2000, largely the result of depressed global commodity prices, particularly coal, and a decline in non-monetary gold exports. However, our efforts led to the successful convening of the Joint Ministerial Commission meeting, chaired by Mr Vaile, on bilateral trade with India and the Joint Working Group on Minerals and Energy in April 2000 and the Joint Business Group on Natural Fibres and Textiles in May 2000. The department contributed to a good result for the Australian wool industry in March 2000, which saw India substantially reduce its tariffs on wool tops and yarn. We fostered cooperation in the information technology and telecommunications sectors and provided support to the trade-related visit to India by the Deputy Premier of Queensland.

Relations with Pakistan were set back as a result of the military takeover in October 1999. The department supported Australian business efforts in Pakistan and, despite the political difficulties and continuing economic hardships in Pakistan, bilateral trade continued to improve.

Our support for business in developing trade links with parts of South Asia other than India was reflected in the continuing healthy trend growth in bilateral trade, although trade increased only marginally between 1998–99 and 1999–2000, from $1.31 billion to $1.35 billion. We worked closely with Austrade to ensure the visit to Australia of the Bangladesh Prime Minister in October 1999 highlighted the opportunities for Australian business. We sponsored visits by rising Nepalese and Bangladeshi politicians under our Special Visits Program, contributing to strengthening Australian interests in these countries.

The department supported DIMA in developing cooperative links with Pakistan to tackle people-smuggling issues, particularly relating to the large case-load of illegal Afghan arrivals.

Table 2. Australia’s regional trade with South and South-East Asia

	EXPORTS			IMPORTS
	1998–99 ($M)	1999–00 ($M)	TREND GROWTH 1994–95 TO 1999–00	1998–99 ($M)	1999–00 ($M)	TREND GROWTH 1994–95 TO 1999–00
ASEAN
Indonesia	2 199	2 401	–0.5	3 275	2 701	21.4
Malaysia	1 859	2 138	–1.4	2 845	3 768	21.4
Philippines	1 207	1 304	7.4	405	457	13.9
Singapore	3 417	4 860	4.1	2 944	4 358	11.1
Thailand	1 306	1 703	–1.9	1 902	2 422	21.1
Vietnam	349	385	21.6	972	1 726	42.9
Other ASEAN	80	71	–11.0	25	230	49.6
Total ASEAN	10 416	12 862	1.8	12 368	15 663	19.5
India	1 837	1 595	12.0	666	715	6.6
Other South Asia	1 027	1 063	19.0	281	288	7.5
Total South Asia	2 864	2 657	14.4	947	1 003	6.8
Total	13 281	15 519	3.7	13 315	16 666	18.5

Source: Compiled by DFAT from ABS data.

Reporting against quality and quantity indicators and administered items commences on page 100.