Newly incumbent Australian Prime Minister Tony Abbott has signaled the importance he places on Australia's relations with Indonesia by making Jakarta the destination of his first overseas visit. Abbott said it was his hope “that this visit establishes a convention for all future incoming prime ministers to make Jakarta their first port of call overseas.” But his meetings Monday and Tuesday with Indonesian President Susilo Bambang Yudhoyono were initially overshadowed by controversy surrounding Australia’s asylum-seeker policy, which has become a hot-button issue in both countries.
Indonesia is important to Australia both from a geostrategic and trade perspective. Relations between the two countries are underpinned by a formal defense cooperation arrangement and an annual trade ministers meeting. As Australia's closest and most populous neighbor, it is the recipient of Australia's largest bilateral aid program. At $2.3 billion, Indonesia is Australia's third-largest agricultural export market, behind China and Japan; two-way trade between Indonesia and Australia is worth $14.6 billion; and Australian investment in Indonesia is worth $6.8 billion.
The visit thus reflected the new Australian government’s intent to more closely align its foreign and economic policies. To that end, Foreign Minister Julie Bishop, Trade Minister Andrew Robb and 20 prominent Australian business leaders accompanied Abbott to participate in discussions on a range of issues relevant to the bilateral relationship, including ways to strengthen economic ties, defense and security cooperation, and educational linkages—as well as the controversial areas of asylum-seeker policy and live cattle trade.