Australia and Indonesia: Building a Partnership as Neighbours by Choice

Former Indonesian trade minister and economist Dr Mari Elka Pangestu delivered the 2026 Boyer Lecture series, examining the historical ties, ongoing challenges, and future opportunities in the relationship between Australia and Indonesia. Dr Pangestu reflected on her personal history moving from Jakarta to Canberra in 1966 when her father joined the Australian National University (ANU), noting how academic institutions and early scholars laid the intellectual foundations for regional engagement.

Historical Evolution and Bilateral Milestones

• Academic Foundations: Scholars at ANU, such as Sir John Crawford and Heinz Arndt, built deep relationships in Indonesia, helping stabilize bilateral ties during political shifts.
• Political Commitment: The era of Bob Hawke and Paul Keating marked a historic political turning point, leading to APEC, the 1994 Bogor Goals, and the 1995 Agreement on Maintaining Security.
• Frictions and Crises: The relationship has experienced disruptions, including the 1999 East Timor crisis, the 2006 West Papuan asylum issue, the 2011 live cattle export ban, and the 2013 intelligence leaks regarding President Susilo Bambang Yudhoyono's phone.

Current Engagement and Strategic Recalibration

Prime Minister Anthony Albanese and Indonesian President Prabowo Subianto signed the Treaty of Jakarta in February 2026, establishing a new common security pact. The Albanese government has also expanded the New Colombo Plan scholarship program, with a record number of Australian scholars heading to Indonesia in 2026. Furthermore, Australia's official development assistance to Indonesia is budgeted at approximately $347 million for 2026–27, focusing on economic reform, climate adaptation, health security, and private-sector development.

Shared Challenges and Future Outlook

Pangestu noted that global uncertainties, including the 2025 US tariffs and the Strait of Hormuz crisis, highlight the necessity of regional economic resilience. While school enrolments in Bahasa Indonesia have declined by 50 percent over one school generation, bilateral cooperation continues through frameworks like the Track 1.5 Indonesia–Australia Economic Security Dialogue. The lectures air on consecutive Sundays from October 18 on ABC Radio National's Sunday Extra and are available on the ABC listen app.