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Indonesia, East Timor and Australia: New Challenges, Enduring Interests
Speech by the Hon Alexander Downer MP, Minister for Foreign Affairs, to the National Press Club
Canberra, 31 March 1999

(Check Against Delivery)


Thank you Laurie, ladies and gentlemen.

It is a pleasure to be at the National Press Club once again, especially to address it on a topic as important to Australia's interests as Indonesia. While it could be said that foreign affairs ministers worldwide are forever poised between a cliche and an indiscretion, today I will attempt to avoid both as I set out Australia's position on an issue of vital national and international importance.

When in 1997 the Government released its Foreign and Trade Policy White Paper we took the long view. We took a fifteen year perspective identifying both the trends and the relationships which guide Australian policy. We identified globalization and the economic rise of Asia as defining trends. Despite the Asian economic crisis, we have no reason to change those medium- to long-term assessments.

We also identified four key relationships at the heart of Australian foreign policy: the United States, China, Japan and Indonesia. We were right to place our focus on those countries. Since then, Indonesia has encountered enormous domestic difficulties and embarked on a program of reform unprecedented in half a century. The very fact that Indonesia - and East Timor - are going through such a transition is good enough reason for me to talk to you today.

But there is another reason for the close attention I and the Government as a whole pay to what is occurring in Indonesia and East Timor, a reason that all too often gets overlooked as we get caught up in the flow of events from day to day. It is that what happens in those places, on our very doorstep, engages the fundamental interests of our own nation.

Now, it is true that a significant impetus for our involvement in Indonesia and East Timor is purely altruistic. No one should belittle the great humanitarianism, the sense of justice (or as we would express it, the desire for everyone to get a "fair go") that Australians possess. But we are also involved - must also be involved - because what happens there will have direct consequences for Australia's security and, to a lesser extent, our economy. So I want also to touch on a few of those issues today.

I will speak first, therefore, about Indonesia before turning to developments in East Timor.

Indonesia - focus of Australia's abiding interests

1999 marks fifty years since the Netherlands transferred sovereignty to the Republic of Indonesia. Many in this country are, sadly, unaware of the major role Australia played during the four years of diplomatic negotiation and at times bitter fighting that led to that day. Indeed, it was Australia in 1947 that had taken the crucial diplomatic step of referring the conflict in Indonesia to the United Nations Security Council as a breach of the peace under Article 39 of the UN Charter.

Australia's anti-colonialist stance was quite revolutionary for a country that might have been expected to side automatically with a European ally of World War II. Actually, this illustrates a point I have made many times in the past: that Australia did not "discover" Asia when Paul Keating discovered Asia. We have a long history of active involvement there. Or as one 1948 government document put it, Australia's "security and prosperity is bound up with the security and prosperity of all Asian countries, and this depends on mutual co-operation and respect in the area". It is a telling fact that on the very day the Netherlands transferred sovereignty to the Republic of the United States of Indonesia, 27 December 1949, the Australian Government led by Robert Menzies recognised the new State de jure.

As I go around the country and meet Australians in all walks of life I am often struck by the number of people who wonder why Australia puts so much effort into its relations with Indonesia. Now, for practitioners of foreign policy the answer may be self-evident. But many people's perceptions of Indonesia are shaped solely by what they see on the television each night. And with the greatest of respect to my friends from that media, television does not often have the luxury of being able to explain all the detail of the issues they cover, nor place them in the wider context of Australia's interests.

The fundamental importance of Indonesia to Australia was, I think, summed up well in the White Paper. The White Paper spoke of Indonesia's strategic location, astride our northern approaches through which more than half our exports pass, and its size, both geographically and in terms of population. For the same reasons Indonesia plays a long-term leadership role in South East Asia, and is acquiring a broader influence in East Asia and beyond.

The White Paper also explained how Australia has benefited over the past three decades from Indonesian policies and actions that have advanced regional cooperation and stability in South East Asia and the wider Asia Pacific region. Put simply, a stable and prosperous Indonesia has added immeasurably both to our own economic well-being and our national security.

To those who mindlessly complain about Australia's relationship with Indonesia I say that if we had maintained a hostile and aggressive relationship with Indonesia over the past 30 years, then Australia's strategic policy would have been starkly different; our economy much affected; and our engagement with Asia almost non-existent: indeed, it would have changed the very structure of Australian society.

I tell you this not to justify every detail of what Australian governments did with the relationship over the past 30 years - I will leave that debate to others. I tell you this so as to help Australians understand that our peace, our security and our prosperity depend on a balanced, clear-headed and rational assessment of our national interest as a whole, not just ejaculations of simplistic emotionalism.

Against that background, I saw it as vital for Australia to play a leading role in helping Indonesia ameliorate some of the disastrous consequences of the Asian economic crisis. And the impact has been significant. Last year Indonesia's economy shrank by 13.7 per cent, and though the situation has improved somewhat this year the economy may well see negative growth again. Inflation for the year to January 1999 was over 70 per cent. Indonesia is gripped by one of the worst recessions this century, a recession that comes on top of much hardship caused by natural disasters like droughts and forest fires.

There has, thankfully, been some good news recently. Indonesia's official budget forecast is for zero growth and inflation around 17 per cent for the year, while the IMF thinks it could be as low as 10 per cent. Interest rates have been falling, and the exchange rate has improved substantially. It is encouraging that initial surveys show that overall poverty levels in Indonesia have not increased as dramatically as has been feared, rising from 11 per cent in 1997 to between 14 and 19 per cent last year. And both the IMF and ourselves are broadly satisfied that Indonesia is adhering to its agreed reform program.

The Australian Government acted swiftly and generously to help Indonesia meet the challenges of the Asian crisis. We committed more than US$1 billion to Indonesia's IMF package, and led the effort to ensure the IMF's proposals were tailored to meet the country's economic and social needs. We provided export credit insurance to assist trade, and have been at the forefront of broader regional and international consideration of the effects of global financial volatility.

Our bilateral aid program has been targeted to help put Indonesian economic development on a more sustained path, with emphasis on economic capacity and institution building. Our total aid program for Indonesia increased by around a third to $127 million in 1998-99.

The economic crisis has led to an historic turnaround in Indonesia's political scene. Indonesia has a new President, more than 130 political parties, and a very healthy and lively debate on political change and reform. The General Election for the People's Representative Council on 7 June will see Indonesia become the world's third largest functioning democracy.

Indonesia is therefore embarking upon a journey that is full of promise, but equally full of uncertainty. It deserves every assistance from Australia, and we are determined to provide it. We have allocated between $10 and $15 million to be channelled through the United Nations Development Program and the Australian Electoral Commission to help produce and distribute voter education material, train electoral staff and help establish a national tally room for the June elections.

As part of our wider effort to assist in making the June elections as successful as possible, I wish to announce today that we are planning to send a team of around 20 to 25 observers, including parliamentarians, to monitor the elections themselves. We would envisage these observers being part of a wider international effort coordinated by the UN and providing assistance and support to the Indonesian domestic monitoring effort.

We are also strengthening political reform through activities under our bilateral aid program, including a project to strengthen judicial training in Indonesia, and the provision of support to Indonesia's National Human Rights Commission - the Komnas HAM.

We've already seen some of the tragic threats to Indonesia's fledgling democracy in the violence that has flared throughout the archipelago, based on social, religious, ethnic, and economic tensions. This is a difficult time for Indonesia and its people, but we urge all parties to show restraint and forbearance. We've already acted to help where we can. For example, we've provided funds to Indonesian NGOs in Ambon to assist some three-and-a-half thousand people whose homes and livelihoods have been destroyed by ethnic and religious violence.

We cannot expect Indonesia to develop overnight the culture of peaceful and orderly political dialogue and change that Australians, and our colonial forebears, developed over many decades. But we can expect the Indonesian Government and all political parties to show leadership and act firmly against any rogue elements that might seek to disrupt the democratic processes for their own gain.

East Timor - looking to the future

I turn now to East Timor, which has more than any other matter dominated public perceptions of Australia's relations with Indonesia and where there has recently been major policy movement after many years of immobility.

An examination of the question of East Timor's future throws up resonances of issues I have already touched on in my discussion of Indonesia's situation. Just as the economic crisis led to fundamental political change that has opened the promise of real democratic freedoms in Indonesia, so too it has been the catalyst for a re-examination by the Indonesian Government of East Timor's status. There is simply no doubt that, were President Suharto still in power, the resolution of the East Timor problem would not today be a real possibility.

It was the possibility of such a policy shift that spurred the Government to agree that the Prime Minister should write to President Habibie last December to suggest an act of self-determination by East Timorese, following a period of autonomy for East Timor, and to make clear our support for the release of Xanana Gusmao in light of the important role he must play in the process of reconciliation. Both President Habibie and Xanana Gusmao have told me that these suggestions helped catalyse Indonesian thinking, leading to the announcement on 27 January concerning possible independence for East Timor and the transfer from prison of Xanana Gusmao.

Events are moving very rapidly in relation to East Timor's future, but the Australian Government's policy has remained absolutely fixed on two points. First, that any transition in East Timor - be it towards greater autonomy or full independence - must be peaceful and orderly. Second, that the East Timorese people must be fully consulted over the transition at all stages. These are matters I have made very clear to all parties involved, including President Habibie and Xanana Gusmao when I met them last month in Jakarta.

As part of stabilising the situation and reducing tensions on the ground in East Timor, it is very important for the militia groups in East Timor to be disarmed. This is a matter which we have taken up with the Indonesian Government. It is vital to the process of reconciliation that the path ahead be negotiated peacefully and not through resort to violence, and we urge all parties to exercise the utmost restraint .

There are a number of other issues surrounding East Timor's future that will require close monitoring and active cooperation between all concerned parties over the coming months. Australia will continue to take an active role in consideration of these issues, recognising that their ultimate resolution will rest on common action between the Indonesian Government and the East Timorese themselves.

To enable the Government to respond quickly to the rapid pace of developments in East Timor, I have increased the resources allocated to covering the issue, with the establishment an East Timor task force within the Department of Foreign Affairs and Trade. The Government has also agreed to establish an Australian consular presence in Dili, at a time to be agreed with Indonesia, and to station an officer of my Department in Lisbon to maintain close contact with the Portuguese Government through the period ahead.

One area where we have taken immediate action to address the situation on the ground is in the provision of humanitarian assistance. Australia is already the largest bilateral aid donor to East Timor by far, having committed approximately $7 million in development assistance for the 1998/99 financial year. We've also provided, over several years, more than $5 million to assist the activities in East Timor of the International Committee of the Red Cross, as well as bilateral assistance in the areas of legal aid and human rights on the ground in East Timor.

Last week I announced the outcome of our AusAID team's recent evaluation visit to East Timor. The report provides a valuable assessment of conditions on the ground, helping to allay fears that a major humanitarian crisis was under way on the island. It highlighted areas of particular concern, including internal transport and distribution bottlenecks for foodstuffs and the decline in the local health system. In response to the report, we will be working with the Indonesian Government and with other organisations in East Timor to help overcome identified problems. We will also provide direct assistance for some five thousand internally displaced persons there and will help with medical supplies. As I said last week, this report isn't the end of a process, but the beginning of one - we have made a long-term commitment to the welfare of the East Timorese people, whatever the political future may hold. Next month, an AusAID assessment team will visit East Timor to look at its medium and long-term development needs and to identify aid projects which will respond to those needs.

The Government is also offering support for the efforts of various East Timorese groups to plan for the future development needs of East Timor. We have helped fund a conference on development planning coordinated by members of the East Timorese community to be held at the Victoria University of Technology next month. We will also, through the Centre for Democratic Institutions at the ANU, contribute to the costs of hosting a conference later next month on technical aspects of East Timor's future development. This conference will be organised by an elite group of East Timorese, academics and other recognised experts known as the East Timor Study Group.

The process through which the future status of East Timor will be decided is reaching a crucial phase. The first milestone will come with the conclusion next month in New York of negotiations between Indonesia and Portugal on the autonomy package for East Timor.

The next step will be agreement on the consultative process through which the people of East Timor will decide between Indonesia's autonomy package or full independence. While all - including Xanana Gusmao - accept that this will not be a referendum, the process used must be seen as credible by the East Timorese themselves, and involve their wide participation. This must be the case, whether the process used is the formation of an East Timorese consultative assembly, or some other method.

This was a matter I discussed in some detail on Monday evening with Fancesc Vendrell, the Director of the Asia and Pacific Division of the of the UN Department of Political Affairs, who was here with his UN team following his visits to Jakarta and Dili. Aside from the consultation process itself, we both agreed that the United Nations' proposal for the establishment, in close cooperation with the two bishops in East Timor of a Peace Commission was an important initiative. Such a body, with representatives of all the key parties in the territory, would serve as a confidence building measure leading to the consultation process. It would concentrate on building trust and deterring acts calculated to derail the process without influencing its outcome.

Once the East Timorese people have made their decision on the island's future, all parties will need to cooperate to ensure a smooth transition to either wide-ranging autonomy or independence in East Timor. The Indonesians have given me a firm commitment they will not just walk away if independence is chosen. But should independence be favoured an early involvement by some kind of United Nations administration will become necessary, an administration that I would expect Indonesia, as well as Australia and Portugal and other nations, would help support. This was another matter I discussed in some detail with Mr Vendrell, and we both agreed that continued progress on East Timor's status could see the establishment on the island of a civilian UN presence as early as May.

How to manage the security environment in East Timor while all these changes are taking place is the most difficult question of all. We continue to hope that any transition in East Timor can be handled in such a way that UN or other peacekeeping forces will not be necessary, and in our discussions with Indonesian and East Timorese figures have stressed the need for them to act in concert to achieve that outcome. Of course, we also try to plan for any possible contingency, and I have made it clear on many occasions that Australia will do its part to help make the transition a smooth one.

Some commentators on East Timor have been remarkably enthusiastic to have Australian peacekeepers committed, even before the parties involved have decided on a program to chart the territory's future. I thought it might be useful, therefore, to remind you all of the basic considerations that any responsible government would have to address before it places the lives of our courageous and professional service men and women at risk.

Of course, we would expect any peacekeeping mission to have a specified objective - with a good probability of success - adequate resources to achieve the objective, and a limited duration and scope. And decisions on how to respond would need to take account of the following issues:

  • whether the operation has a clear and achievable mandate; clear and achievable goals and clearly defined termination and review points;
  • whether there is a prospect for a satisfactory outcome given the commitment of UN resources and the political nature of the situation;
  • what other resources are likely to be available for the operation;
  • what Australian interests are engaged, including regional, alliance and humanitarian interests and community attitudes;
  • what costs the contribution might incur, including the effect on the ADF's or AFP's capacity to undertake other tasks, including national defence;
  • what our commitment to other operations is at the time;
  • what the risks are for personnel involved in such operations.

Now, while some of the answers to those questions might be evident now, many are not. As I've indicated above, we hope that East Timor's transition can be handled in such a way that peacekeeping forces are simply not required. But if that does not eventuate, and if the UN makes the call, Australia will respond appropriately, bearing all the considerations I've listed in mind. What we won't be doing is indulging - as our critics would desire - in Ramboesque posturing, defining a hairy-chested role for ourselves before asking the basic question of what the objective should be.

Australia is also concerned to ensure that there is full consultation between all the parties who have a stake in the process that will resolve East Timor's future. That is why I have met with President Habibie and Indonesian ministers, with Indonesian opposition leaders Megawati Soekarnoputri and Amien Rais, and with the Portuguese Foreign Minister and his officials. That is why the Secretary of my Department, Dr Ashton Calvert, went to the United States to talk with UN Secretary General Kofi Annan and other senior United Nations officials, and representatives of the US Administration.

That is also why I was determined to meet East Timorese leaders such as Xanana Gusmao, Bishop Belo and Jose Ramos Horta. And that is why we have, through our Embassy in Jakarta, intensified our dialogue with East Timorese leaders like Xanana, the two bishops, Governor Abilio Soares, and many others both for and against integration with Indonesia. My Department has also established an extensive network of contacts among the East Timorese currently living outside East Timor.

Our aim is twofold. First, we want to facilitate practical cooperation on East Timor's transition. Secondly, and just as important, we want to begin the process of reconciliation with the territory, a process that will necessarily be long and difficult. The competing factions within East Timor never had too much success with sitting down and resolving their differences through negotiation, even before Indonesia's occupation in 1975. But new times demand new approaches if we are to have any chance of breaking the cycle of terror and violence. The experience of the peoples of South Africa and Northern Ireland show a possible path of hope for East Timor.

We want the leaders of all factions in East Timor to sit down together to discuss their common future, to seek the necessary accommodations to guarantee a peaceful transition to a new status. We have already been thanked by Xanana Gusmao for our efforts which contributed to early contact between him and a number of leading pro integrationists. I support his call for the two bishops to assist in promoting dialogue and I am encouraged to learn of the establishment of an East Timor Independent Commission for Human Rights under the auspices of the Indonesian National Commission (Komnas HAM).

Like Indonesian democracy, the process of change in East Timor is a young and delicate bloom. Australia will expend the same effort to ensure that it is well nurtured, and will seek to develop the tolerance and good will on all sides that will be necessary if we are to bring a successful end to this unhappy chapter in Indonesia's history.

If East Timor is to become independent, then guarantees for pro-integrationists will need to be given: if it chooses autonomy, the pro-independence forces will have peacefully to accept the verdict of the people.

These are all difficult issues. They may not be fixed easily or quickly. Indonesia, the East Timorese, Portugal and Australia have already been working hard to resolve them, but no doubt many more months of concerted effort lie ahead. For Australia's part, I can say we are committed to finding an equitable and peaceful solution to East Timor's future, and are looking forward to continuing our long and amicable association with the East Timorese people.

Conclusion - new challenges, enduring interests

In talking with you today about some of the issues being thrown up by the changes taking place in Indonesia and East Timor, I want to leave you with two ideas. The first is that the nature of these changes is truly fundamental - whatever may emerge from these processes, we can be sure that it will be something never seen before in either place. That provides some great challenges for Australian policy makers, but also some fantastic opportunities. The Australian Government will be doing all it can to encourage both the Indonesian and East Timorese people down the path of greater freedom and prosperity.

The second point follows directly from the first - it is that Australians should take a close interest in developments in these places, because they will have a significant impact on our own country. A nation's involvement in day-to-day diplomacy is transitory, but national interests are abiding. We have a direct interest in a peaceful and stable Indonesia, and in a smooth transition in East Timor's status, and this Government intends to ensure that those interests are met.

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