New Zealand Embassy Jakarta, Indonesia

Indonesia, New Zealand boost ties in energy, education

Indonesia and New Zealand agreed to enhance cooperation in education, energy, counterterrorism and trade during a meeting between Foreign Minister Marty Natalegawa and his New Zealand counterpart Murray McCully in Jakarta on Tuesday 19 October.

Both countries also launched Tuesday the “Indonesia New Zealand Friendship Council”, which will consist of eminent persons from both countries working to boost cooperation and iron out issues between both countries. The council will consist of senior diplomats, scholars and society figures.

Marty said New Zealand had committed to increasing scholarships for Indonesian students from 15 to 50 annually in the coming years. “In return, we will host New Zealand diplomats for training at the Foreign Ministry in Jakarta,” he said.

In the energy sector, Marty said that Indonesia and New Zealand would look into collaboration in geothermal energy.

Indonesia’s geothermal potential is estimated to account for 40 percent of the world’s total or around 28,000 megawatts. Indonesia has set aims to become the world’s largest user of the energy source with some 5 percent of national energy needs coming from geothermal energy by 2025.

The government has estimated that this will require at least US$12 billion in investment, mostly from foreign sources.

The two ministers did not mention the potential amount of investment for the geothermal cooperation during the media briefing but McCully said his country would consider cooperation in the energy sector a priority.

McCully added that both countries would increase trade in the future, especially under the umbrella of the ASEAN-New Zealand Free Trade Agreement.

Under the FTA and by 2020, Jakarta will scrap tariffs on imported dairy and meat products from Australia and New Zealand, which are currently subject to tariffs of 5 percent on average. Australia and New Zealand are the largest exporters of meat and dairy products to Indonesia. In return, New Zealand, which has already near-zero tariffs on most imports, will open its labor market for a quota of Indonesian chefs, teachers and semi-skilled workers.

Indonesia has also been negotiating an agricultural technology transfer from New Zealand and for a wider labor market for Indonesian skilled migrant workers in exchange for opening its local market.

Concerns have arisen that unless local meat and dairy producers are equipped with sufficient technology and knowledge, the FTA would have an adverse impact on similar local industries, which the Agricultural Ministry estimates employs around 20,000 workers.

“The relations with Indonesia is going forward and we expect to increase trade, enhance cooperation in the education sectors as well as security and energy,” McCully said.

After the meeting with Marty, McCully is also scheduled to meet with ASEAN Secretary-General Surin Pitsuwan. New Zealand is the member of the 16-strong East Asia Summit, which is set to expand membership to include Russia and the US next year.

Story by Lilian Budianto Jakarta Post

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