Department Foreign Affairs & Trade  
Annual Report - Contents
DFAT Annual Report 1998-99

Interests in South and South-East Asia : Sub-program 1.2


The South and South-East Asia Division administers this sub-program. The division comprises two branches: the Mainland South-East Asia and South Asia Branch, and the Maritime South-East Asia Branch. The division’s area of responsibility also includes 18 Australian overseas posts: Bali, Bandar Seri Begawan, Bangkok, Colombo, Dhaka, Dili, Hanoi, Ho Chi Minh City, Islamabad, Jakarta, Kathmandu, Kuala Lumpur, Manila, New Delhi, Phnom Penh, Rangoon, Singapore and Vientiane, covering 18 countries.

In March 1999, the department created the East Timor Task Force within the Maritime South-East Asia Branch to respond to the increased priority accorded by the Government to this issue. We also posted an Australian Policy Liaison Officer to Lisbon in April 1999 to facilitate closer contact with the Portuguese Government on East Timor issues, and opened a consulate in Dili, East Timor, on 3 June 1999.

The division had previously comprised three branches, but in December 1998 two of these branches (the South Asia and Indian Ocean Branch, and the Mainland South-East Asia Branch) were amalgamated to form the Mainland South-East Asia and South Asia Branch. At the same time, two sections were combined to form the India and South Asia Section. Responsibility for matters relating to the Indian Ocean Rim Association for Regional Cooperation subsequently passed to Sub-program 1.6, administered by the Market Development Division. Responsibility for bilateral relations with Mauritius and other countries covered by the Port Louis post was transferred to Sub-program 1.4, administered by the South Pacific, Africa and Middle East Division.

Table 14 Interests in South and South-East Asia (1.2) Resources Summary


1997-98 Actual ($’000)

1998-99 Budget ($’000)

1998-99 Budget and Additional Estimates ($’000)

1998-99 Actual ($’000)



Running costs

56 358

60 805

65 244

58 832

Other program costs

1 763




Total appropriations

58 121

60 927

65 366

58 945

Less adjustments

7 377

6 854

8 598

7 750

Total outlays

50 744

54 073

56 768

51 195

Staff years





n.a.: Not applicable.

Figure 11 Interests in South and South-East Asia (1.2) Organisational Chart

Figure 11


Objectives, Performance Indicators and Results


To maximise Australia’s influence and advance its political and security interests in South and South-East Asia through the development of relations with key regional countries.


The extent of Australia’s contribution to developments in East Timor, including through ongoing dialogue with Indonesia and the East Timorese.

Australia has played a key role in support of UN efforts to bring about a UN-run ballot in East Timor. The department was intimately engaged in driving and coordinating Australian efforts, which included contributing $20 million to the UN process (spread between ‘in-kind’ logistic support and a direct financial contribution to the United Nations), personnel support to the UN Mission in East Timor (UNAMET), and intense diplomatic activity—most notably the Prime Minister’s Bali Summit initiative in April 1999—in support of the UN role and its effort to improve the security situation. We maintained a fruitful dialogue with East Timorese representatives from all sides, including with overseas-based East Timorese. We were also active in encouraging, promoting and supporting efforts to advance the process of reconcilliation among the East Timorese.

  • Of fundamental significance to Australia was the Indonesian Government’s decision in January 1999 to allow the people of East Timor to choose for themselves, in a ballot scheduled for the end of August 1999, whether they wished to remain part of Indonesia. Australia worked closely with the United Nations to help shape the international response to East Timor and monitored closely the uncertain security situation there, emphasising at very senior levels in Jakarta the importance of a stable environment for the ballot and beyond. The photo shows Mr Downer (left) meeting the East Timor independence leader, Mr Xanana Gusmao, at his residence in Jakarta in February 1999. photo: AP-AAPIMAGE


The extent to which Australia makes a positive contribution, both bilaterally and in coordination with other relevant countries and international organisations, to promote Indonesia’s economic recovery.

With Australian assistance, Indonesia’s external funding needs for 1998–99 were met, and the foundations for a good social safety net program were created with international financial institution and bilateral aid support. The department coordinated a multi-pronged effort by the Australian Government to galvanise international support for Indonesia’s recovery. This included increasing Australia’s Consultative Group on Indonesia pledge by over 30 per cent, and providing a US$1 billion pledge to the International Monetary Fund stabilisation program. Australian advocacy also helped moderate the IMF’s initial program to take greater account of the need for fiscal stimulus and development of social safety nets.


The extent to which the political transition in Indonesia is supported, and good lines of communication are maintained with the key political figures.

The department played a key role in organising Australia’s support for the general election in Indonesia, which included helping to organise a $15 million program of technical and practical assistance, and managing the deployment of 26 election observers (members of parliament and officials). We worked closely both with the Indonesian Election Commission and with the United Nations Development Program and other donors in supporting Indonesia’s most free and fair election for over 40 years. This work involved voter education programs, training of domestic monitors and establishing a tally room. The department also worked closely with AusAID and the Australia–Indonesia Institute to encourage and develop assistance programs aimed at fostering civil society and good governance, which have contributed to the evolution of Indonesia’s democratic and civic life over the past year. The department coordinated the significant development of links with key Indonesian Government and opposition figures, including through frequent ministerial and embassy contact.

Senator Sandy Macdonald, Ms Augusta Simanjuntak

  • On 7 June 1999, Indonesia held its freesest and fairest general election in over 40 years. The department managed a 26-person Official Australian Election Observation Mission that visited Indonesia as part of the international observer effort for the Indonesian elections. The mission was led by Senator Alan Ferguson, and included members of parliament and government officials. The photo shows election observers (right to left) Senator Sandy Macdonald, Ms Augusta Simanjuntak (member of the Independent Election Observer Committee of Indonesia), departmental officer Mr Anthony Pearce, and two officials from the Provisional Vote Compilation Centre. The group is inspecting central computer records of the city of Surabaya to verify the recorded votes of polling stations. photo: Jawa Pos


The development of non-official links and partnerships between Australia and Indonesia, and the promotion of a positive image of Australia in Indonesia, through the work of the Australia–Indonesia Institute.

The Australia–Indonesia Institute’s new Civil Society program provided nearly $500 000 to strengthen Indonesia’s electoral reform, human rights treaty implementation, women’s groups, legal aid and law reform, and the environment. Feedback from program participants, and from Australian and Indonesian political figures, suggests that the program is making a significant contribution to greater dialogue between the people and government in Indonesia.

During the year, we finalised arrangements for the launch of the institute’s largest project ‘Geografi Australia’, an Australian social geography textbook. The project, initiated by the institute in 1995 and produced in close consultation with the Indonesian Ministry of Education and Culture, will form part of the Indonesian secondary school curriculum. In April 1999, we finalised arrangements for publishing and distributing 50 000 copies of the book, and in June 1999 arranged for Asian Field Study Centres Pty Ltd to train 300 Indonesian teacher educators in its use. The project is supported financially by the Australia–Indonesia Institute, the Department of Education, Training and Youth Affairs, the Northern Territory Government, and former institute board member Mr Ian Berckelman, AM. The book is scheduled to be launched in July 1999.

We also coordinated a meeting of 37 senior Australian and Indonesian editors in Jakarta to promote dialogue and mutual understanding of the political and economic circumstances in both countries. This meeting was followed by well-considered, widespread media coverage in Indonesia and Australia. The institute also continued to develop non-official links and partnerships through its youth exchange program (36 participants), teachers’ scholarships (36 recipients), media scholarships (11 recipients), and support for 10 performing and visual arts programs.

Figure 12 Australia’s Merchandise Trade with Indonesia

Figure 12


The advancement of Australia’s economic and regional security interests in South Asia in partnership with countries of the region, particularly India; and the steps taken with India and Pakistan in support of these interests, consistent with positive movement by these countries in relation to nuclear testing.

The department cooperated closely with Australian business in South Asia, anticipating growth sectors for the future and facilitating potential commercial links in conjunction with Austrade. For example, we arranged a visit to Australia in June 1999 by an Indian information technology delegation to establish contact with Australian industry. These activities contributed to the continued strong and diverse growth of trade with India, with a 25 per cent increase in exports over the past two years. Exports to other South Asian markets exceeded $1 billion.

Figure 13 Australia’s Merchandise Trade with India

Figure 13

The department played a leading role in the conclusion of bilateral agreements with India and Pakistan to protect and promote investment, and to facilitate cooperation with India on statistics, sports and agriculture. We also contributed prominently to the initiation of mechanisms leading to expanded cooperation on tourism, information technology, natural fibres and textiles, and coal.

The department continued to monitor closely and advise the Government on developments in India and Pakistan following the nuclear tests of 1997–98. During the year in review, the Government relaxed the suspension on visits by ministers and senior officials to India and Pakistan, in recognition of positive movement on the part of India and Pakistan towards meeting some of the requirements of UN Security Council Resolution 1172, in the wake of the May 1998 nuclear tests.

We implemented the Government’s revised approach, which contributed to the reinvigoration of many areas of bilateral cooperation. In February 1999, Mr Fischer undertook the first Australian ministerial visit to India following this policy adjustment, with significant departmental support. In the trade and investment relationship, we highlighted during the visit Australian capacity in the energy, infrastructure and wool sectors. We also signed an agreement on sporting ties, and agreed with the Indian Government to build capacity in the collection and analysis of economic data.


The development of non-official links and partnerships between Australia and India, and the promotion of a positive image of Australia in India, through the work of the Australia–India Council.

The Australia–India Council initiated and supported a broad range of projects in Australia and India, in partnership with other agencies, aimed at promoting bilateral contact and understanding, and expanding non-official links and partnerships. The focus was on key areas such as public health, science and technology, legal services, environmental management and curriculum development. These projects generated favourable publicity and feedback, and promoted a wider recognition in India of Australian attributes and expertise in these key areas. The council’s activities have particular value as a ‘second track’ in Australia–India relations, complementing government-to-government contacts and exchanges.


The effectiveness of Australia’s contribution to regional efforts for a credible election process in Cambodia, and to ensuring that those responsible for the murder of Australian Mr David Wilson be brought to justice.

The department supported the Government’s contribution to international efforts to create appropriate conditions for a stable and fair election in Cambodia by coordinating the Government’s support to the UN Electoral Assistance Secretariat. We coordinated the deployment of 22 Australian election observers (comprising members of parliament and officials) to a UN-coordinated international election monitoring group. We also facilitated Australia’s provision of technical assistance to the Cambodian electoral authorities, including the upgrading of computer equipment, the provision of voter registration training, and the development of education materials. The election led to the formation of a government in Cambodia able to command domestic and international acceptance.

Through substantial pressure over a five-year period, the department contributed significantly to the Cambodian Government’s decision to prosecute a Khmer Rouge leader involved in the abduction and murder of Mr David Wilson in Cambodia—a prosecution that proved successful. In addition, we made considerable efforts to ensure that others implicated in the murder of Mr Wilson, and in the murders of other Australians during the Khmer Rouge period, were brought to trial.


The effectiveness of Australia’s contribution to international efforts to promote human rights, democracy, and economic reform and development in Burma.

Under guidance of ministers, the department continued a carefully balanced approach to Burma, deepening through the embassy in Rangoon the level of frank dialogue with the State Peace and Development Council and with Daw Aung San Suu Kyi and the opposition. This approach has been successful in enhancing contact on political and consular issues, and in the regime’s positive response to Mr Downer’s proposal for an independent national human rights institution. Australia’s approach has attracted favourable comment from other international partners, including countries in the region, as providing a good basis for progressing democracy and human rights reform in Burma.


The strengthening of partnerships with emerging South-East Asian powers, including Thailand, the Philippines and Vietnam, through the expansion of bilateral trade, investment and strategic relationships, and cooperation in regional forums.

The department led efforts to ensure that Australia and Thailand worked as partners on issues relating to developments in Cambodia, regional economic and political matters, regional security, and Cairns Group issues. We made sustained efforts to secure better market access for a range of exports, particularly in the agricultural and food sectors (wine, meat and livestock, cheese, lupins and confectionary) and also in the services sector. Our approach involved representations to the Thai Government, support for business in Thailand and a program of visits designed to highlight Australian industry capabilities for Thai ministers. Particularly positive results were seen in the meat and livestock sectors during the year in review. Overall, Australia is maintaining market share, and prospects for a recovery in the Thai economy stimulated renewed Australian investment interest.

As part of the continuing process of strengthening Australia’s relations with the Philippines, the department provided input to the second Philippine–Australia Dialogue, which agreed to formulate a strategic blueprint for developing the bilateral relationship. Through our embassy in Manila, we also made a good start on developing links with the new Philippine Administration and presented, jointly with Austrade, the major promotion ‘All the Best¾ From Australia’. This promotion comprised 27 events in over 50 locations around Manila, and helped raise Australia’s profile as a commercial partner (details in Sub-program 1.9). We made significant progress on quarantine and other irritants at bilateral trade talks coordinated by the department. The second round of bilateral regional security talks, close defence cooperation, and constructive interaction in the ASEAN Regional Forum deepened mutual understanding on regional strategic issues.

Figure 14 Australia’s Merchandise Trade with Thailand

Figure 14

Figure 15 Australia’s Merchandise Trade with the Philippines

Figure 15

The department worked with business to advance our commercial interests in Vietnam, contributing to the record positive growth in Australia’s trade with Vietnam during 1998–99, which surpassed $1 billion for the first time. Through our embassy in Hanoi, we worked closely with industry on the live cattle trade and helped a major Australian insurance company secure a licence to operate in Vietnam. Our consultation with the Australian mining industry on reform of the mining law regime in Vietnam should lay the foundations for future commercial benefit. The strategic relationship was strengthened through a second Bilateral Regional Security Dialogue, organised by the department, and through our work in securing agreement for the establishment of a defence attaché position in Hanoi and a Royal Australian Navy ships’ visit to Ho Chi Minh City.

Figure 16 Australia’s Merchandise Trade with Vietnam

Figure 16


The extent to which the bilateral relationship with Malaysia is managed effectively.

The department focused on ensuring that the relationship with Malaysia was managed effectively over the past year, particularly in the wake of significant political and economic changes in that country. Both the Prime Minister, Mr Howard, and Mr Downer expressed satisfaction at the state of the relationship during their visit to Kuala Lumpur for APEC in November 1998, while frankly registering Australia’s views on bilateral and regional developments. Complementing the dialogue at government level were developments in trade, investment, education and other fields. During the year, for example, both Monash and Curtin universities established branch campus facilities in Malaysia, and there was an expansion of Australian investment in the concrete industry.

Figure 17 Australia’s Merchandise Trade with Malaysia

Figure 17

Figure 18 Australia’s Merchandise Trade with ASEAN

Figure 18


Figure 19 Commodity Composition of Merchandise Exports to South and South-East Asia

Figure 19


To advance Australia’s economic interests in South and South-East Asia by contributing to the expansion of trade and investment opportunities in the region, assisting Australian companies, and promoting investment in Australia.


In a difficult economic climate, the degree to which a contribution is made towards the Trade Outcomes and Objectives Statement and the Market Development Task Force’s objectives, and concrete results obtained through bilateral economic/trade joint commissions.

The department played a leading role in South and South-East Asia in line with the Trade Outcomes and Objectives Statement and the priorities of the Market Development Task Force. During the year, we helped to secure the following significant outcomes:

  • opening market opportunities in the automotive sector and improving import conditions for Australian agricultural products in Thailand;
  • increasing our market share for food in Malaysia;
  • securing a significant portion of the imported sugar quotas and an agreement on outstanding bilateral quarantine issues with the Philippines;
  • signing an information technology memorandum of understanding in Singapore;
  • achieving the first step in approvals for Australian halal abattoirs to provide halal meat to Brunei; and
  • improving market access for Australian food, beverage and agribusiness products, technologies and services, and capitalising on opportunities emerging from Vietnam’s economic reform program, particularly in the insurance sector.

The department restructured the format and agenda of the Australia–Vietnam Joint Trade and Economic Cooperation Committee to ensure a more focused and results-oriented meeting. The meeting of this committee in February 1999 resulted in Vietnam agreeing to lift discriminatory import duties on Australian dairy products, and an announcement that Vietnam would review its Mineral Law and consider Australian suggestions for making its mining regime more attractive to foreign investors.

The department supported the drive by Mr Fischer and Mr Downer for improved access for Australian dairy products and pork into the Thai market and, in coordination with others, laid the ground for the export of automotive components. We also pushed for improvements in the climate for foreign participation in the services sector, and supported new investment interest in Thailand.

The Trade Outcomes and Objectives Statement and the Market Development Task Force’s objectives on Indonesia were also achieved. Although overall trade declined, Australia’s market share was maintained. The department encouraged Australian firms to use the opportunities offered by liberalisation to increase, or acquire, ownership of Indonesian companies, resulting in new Australian investments. Through our organisation of the Australia–Indonesia Ministerial Forum and associated working groups (including on trade and investment, chaired by the department), we also helped to maintain Australian business interest in Indonesia. The success of this forum was demonstrated by a record attendance. In addition, the department provided briefing and encouragement for Australian companies to become involved in IMF-mandated audits of government enterprises.

The department campaigned for improved market access in the Indian market and a reduction in tariff and non-tariff barriers across a range of sectors, including greasy wool, automotive components and optical fibre cables. While progress towards tariff reduction was slow, we maintained existing levels of market access despite a decline in India’s economic growth from its previous high levels. We also facilitated Australian interest in marketing health and education services to India, which represent a significant diversification from our traditional commodities export base.

Figure 20 Australia’s Merchandise Trade with Singapore

Figure 20


The extent to which trade opportunities and Government support available to business are highlighted through the
Asialine magazine.

Feedback from Australian business indicated that Asialine was useful in keeping business updated on regional commercial developments and in identifying regional commercial opportunities. The success of this role was reflected in the strong corporate sponsorship for the magazine secured by the department in the last year.


To consolidate Australia’s place in the South-East Asian and Indian Ocean regions through participation in established regional bodies, and to foster new networks that advance Australia’s interests.


The extent to which Australia is recognised as a player on key regional issues as measured by feedback from regional governments, media and business.

The department’s role in coordinating Australian economic assistance and engaging international financial institutions on the financial problems facing the region helped secure greater recognition of our role in East Asia. Regional governments regularly sought our views on key issues, notably on East Timor, the regional economic situation, and Burma. Australia’s contribution to efforts to overcome the impact of the regional economic crisis, and the department’s contribution to diplomatic action in Cambodia were recognised by regional governments, media and business.

We maintained an effective dialogue with ASEAN member states and the ASEAN Secretariat (through consultation with Secretary-General Severino) on Australian cooperation with the secretariat on post-crisis recovery plans, including economic surveillance and capacity building. We also continued our support for Australia’s participation in key regional forums such as the ASEAN Post-Ministerial Conference.

The department was active in encouraging the development of a trade policy agenda in the Indian Ocean Rim Association for Regional Cooperation through convening a meeting of IOR-ARC senior officials in Perth in December 1998. The recommendations of this meeting were subsequently endorsed by the biennial IOR-ARC Council of Ministers meeting in Mozambique in March 1999, where we secured agreement to our proposal to implement a trade and investment policy agenda for the association. This agenda aims to increase the transparency of members’ trade and investment regimes, to the benefit of business.


The contribution made towards ensuring that the regional structures in which we participate, for example ASEAN dialogue processes, operate effectively and in Australia’s interests.

The department helped achieve improvements in the ASEAN Post-Ministerial Conference meeting structure, aimed at facilitating real dialogue between ASEAN and dialogue partner foreign ministers, rather than set-piece presentations. Singapore, as ASEAN Chair for 1998–99, implemented improvements along the lines of the department’s suggestions, to enhance the focus and effectiveness of these meetings. We also contributed to the effectiveness of the ASEAN Regional Forum as a security instrument, by helping to lay the groundwork for the organisation’s first substantive discussion of preventive diplomacy.

We succeeded in our efforts to ensure the Indian Ocean Rim Association for Regional Cooperation was more representative of Indian Ocean countries and that the association’s activities remained modest in its developmental stages. The department also ensured that APEC remained focused on efforts to promote regional recovery, including by securing leaders’ endorsement of Australia’s economic governance initiative (see also Sub-program 1.6).

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