Relations between Australia and Indonesia have soured in recent weeks over revelations that Australian spies tapped the phones of the Indonesian president and other top officials. This week, however, tensions started to ease with a flurry of diplomatic activity.
The row has affected cooperation over asylum seekers, trade, military cooperation and other issues and was kicked off when documents were released showing that Australia had spied on the Indonesian president, his wife and senior ministers. The scandal prompted Jakarta to suspend military and other cooperation, including efforts to combat trafficking gangs that ferry asylum seekers to Australia’s northern waters.
In a letter to President Susilo Bambang Yudhoyono, Australian Prime Minister Tony Abbott has reportedly promised to restore damaged relations.
Abbott’s letter has yet to be made public, but the Indonesian leader says it is an attempt to defuse the spying controversy.
“The commitment of the Prime Minister of Australia [is] that Australia will never do anything in the future that will bring disadvantage and disturb Indonesia,” said Yudhoyono.
The president also said that both countries will now devise a code of ethics to ensure relations are never destabilized in such a way again.
“I will assign the minister of foreign affairs or a special envoy to further and seriously discuss sensitive issues, including the bilateral relationship between Indonesia and Australia after the tapping. For me, it's a requirement and a stepping stone,” continued Yudhoyono.
It is not known if Abbott has apologized to the Indonesians. The Australian Prime Minister’s initial refusal to explain why Canberra monitored the phones of senior officials prompted a furious reaction in Jakarta. There were noisy demonstrations held outside the Australian Embassy by nationalist groups.
Prime Minister Abbott has welcomed Indonesia’s attempts to broker a truce.
“What the president is proposing is that trusted envoys should meet in the next few days to resolve any outstanding issues in the relationship. I think that's a good way forward and I'm going to reflect on the statement over the next day or so and then we'll be responding more fully,” said Abbott.
Until the new code of ethics is formalized, bilateral cooperation on intelligence matters and people smuggling will remain suspended.
The Australian leader hopes the controversy will soon end.
“Obviously I want this to be resolved as quickly as possible. But I want it to be resolved on a strong and lasting basis. This has been a stressful week or so. In all relationships there are difficulties,” Abbott continued.
Despite Australia’s efforts to sooth tensions with its giant Muslim neighbor to the north, there are concerns that trade may suffer because of the spying scandal.
Brian Scott, the Acting Chief Executive of the Northern Territory Livestock Exporters Association, said that the recent controversy is worrying Australia’s beef industry.
“We would all be very naïve if we thought sovereign governments didn't gather information about each other. However with that said, our industry is the most significant partner with Indonesia with respect of trade between our two countries,” said Scott
“Further, we would sincerely hope that for the benefits of the Indonesian population, and our northern cattle producers, that the situation does not impact on our trade in the short term,” he continued.
Trade between the two Asia-Pacific partners is worth around $11 billion each year.
Analysts believe that the phone-tapping row could damage commercial ties.
Tim Harcourt from the Australian School of Business at the University of New South Wales believes short-term mistrust will eventually give way to longer-term harmony.
“For the most part though, I think Indonesia wants food security, wants our financial services, it wants our technology, it wants access to our education institutions. So in the long run they'll want a good steady relationship with Australia. But yeah, they will be a little bit reluctant at the moment to fast track any trade or bilateral investment deals,” said Harcourt.
The spying controversy is the most serious threat to bilateral ties since Canberra supported the secession of East Timor from Indonesia in the late 1990s.
Experts say that military cooperation and joint efforts to stem a steady flow of asylum seekers leaving the Indonesia islands by boat between Jakarta and Canberra could resume within a month or two.