Indonesia-Australia relations have come a long way. This relationship is one of the most far reaching, high level interactions between two countries in the Asia-Pacific region. As close neighbours and friends, Australia and Indonesia have a strong relationship, with substantial, longstanding and wide-ranging links between our Governments, peoples and business communities.

We are strongly committed to strengthening this cooperation in all areas by building a Comprehensive Partnership to take Indonesia and Australia's bilateral relationship into a new era. Indonesia and Australia are not just close neighbours but fellow democracies with shared interests and a common future.

We are countries with different cultures and traditions, but we share many common objectives. As sovereign nations, we each respect the territorial integrity and unity of the other. Australia does not support separatist movements in any part of Indonesia. Indonesia's unity, stability and prosperity is vital for Australia's own security and well-being and Australia's security and prosperity similarly is important to Indonesia - a united, strong, stable, prosperous, and democratic Indonesia can be a model for successful democratic transition for the world.

All Australians were overwhelmed by the terrible earthquake and tsunami, an unprecedented disaster that occurred on 26 December 2004 in Aceh and North Sumatra and further deeply saddened by the earthquake and loss of life in Nias and neighbouring islands on 28 March 2005. The generous and heartfelt response of the Australian people and the Government to the tsunami tragedy underlines the deep sympathy and affinity Australia and Australians feel for their neighbour, Indonesia. Indonesia extends its gratitude for the expression of sympathy and generous support by the Government and people of Australia for the emergency relief as well as the rehabilitation and reconstruction phases to the devastated areas. Indonesia also greatly appreciates the cooperation extended by the Australian Defence Force (ADF) which worked closely with the Indonesian Armed Forces (TNI) in responding to the emergency in the immediate aftermath of the tsunami as a psychological breakthrough.

Our commitment to work in partnership was reflected in the establishment of the Australia ‑ Indonesia Partnership for Reconstruction and Development (AIPRD) which will provide $1 billion over the next five years for the reconstruction and rehabilitation of Aceh, North Sumatra and other parts of Indonesia. The inaugural Joint Commission meeting of the Partnership established the guiding principles of implementation and priority activities for funding. Indonesia will finalise its plan for reconstruction, development and rehabilitation of Aceh and North Sumatra in May 2005. Considerable financial support will be necessary to support the plan. Key priorities for action under the partnership would include the rehabilitation of health, education and government services in Aceh and improvement of Indonesia's disaster management capabilities.

We believe that this Comprehensive Partnership that promotes bilateral cooperation between the two countries could cover cooperation in the field of economic and technical cooperation, security cooperation and enhanced people-to-people interaction.

Economic and Technical Cooperation

Australia and Indonesia share a fundamental commitment to economic growth and development. Australia welcomes Indonesia's efforts to reform its economy, build strong institutions, improve governance and tackle corruption. The Indonesian government has sent a clear signal that it wants to create an environment that is essential to achieve the level of growth that will ensure employment and prosperity for all Indonesians. Australia's companies are already active in Indonesia and Australia is an important investor. Indonesia's investment in Australia is growing.

There have been frequent business dialogues between our two countries and there remain substantial opportunities for expanding business relationships in both directions. Services trade is a priority area for further growth especially in the education and health sectors. We also hope for an increased flow of tourists between our two countries. We are both committed to maintaining open markets, reassessing non-tariff barriers and creating certainty for investors and business. Both countries also recognised the need to provide market access to small and medium enterprises.

To promote further trade and economic relations, both sides will intensify consultation and cooperation to produce a high quality agreement which serves the national interest of both countries best, between the ASEAN Free Trade Area (AFTA) and the Closer Economic Relations between Australia and New Zealand.

Security Cooperation

The fight against transnational crime is a priority for Australia and Indonesia. Foremost is the challenge of combating terrorism. Both countries have suffered as a result of terrorist attacks. We are determined to do everything possible individually and jointly to eradicate terrorism and extremism and its roots and causes and to bring those who engage in violent criminal acts to justice. The two countries condemn those responsible for the wave of bombings in Indonesia since 2002-the October 2002 Bali bombings, the August 2003 Marriott Hotel bombing and the September 2004 bombing targeting the Australian Embassy in Jakarta. The Jakarta Centre for Law Enforcement Cooperation (JCLEC) established in 2004 as a bilateral initiative of Australia and Indonesia will have a vital role to play in this effort. We appreciate the contribution of countries in the region and beyond to the Centre.

We want to increase our cooperation in combating other forms of transnational crime and non-traditional security threats, especially in areas such as people smuggling, narcotics, outbreaks of disease and money laundering. To better pursue this and the struggle against terrorism, we will forge closer partnerships between our police forces, immigration and customs officials and security and intelligence agencies. We will strengthen intelligence and other exchanges between us. We will work together to improve our capacity to confront these problems when they arise. Practical cooperation in the areas of aviation and maritime security are a priority. We welcome the conclusion of a new aviation security arrangement between us.

We have a common commitment to building defence relations between our two countries, at a pace with which we both feel comfortable. We recognise and welcome the very significant process that has already been made in this area in recent years, including at the highest levels of TNI and the ADF. We believe we can do more, including through exchanges and joint activities, with a focus in particular on maritime security. We have a common interest in ensuring that the border we share is monitored and protected and we want particularly to be creative about ways in which we can do this jointly.

We see value in concluding a security agreement which would provide a framework for new directions in our security relationship. The agreement may cover, for example, protecting the security of both countries from traditional and non-traditional threats, and enhancing the capability of the two countries in tackling transnational crime.

People-to-People Links

The people-to-people links between Australians and Indonesians are the foundation of our relationship. We want to encourage and strengthen these links, in both directions. Education links are central to this. Australia remains the number one destination for Indonesians wishing to study overseas. We want these numbers to grow, not only are they assisting Indonesia with its development but they are creating a large group which understands and has had experience of Australia. To this end, Australia will be offering 600 AIPRD post-graduate scholarships, thereby more than doubling the number of scholarships it currently funds for Indonesia. Australia is also happy to continue its cooperation in the field of education with Indonesia, including expanding its links across all education sectors and levels. Indonesia would also welcome more Australian students studying in Indonesia.

Increasing exchanges between our ministers and officials also directly enhances the relationship. A series of Australia-Indonesia Ministerial Forum meetings have taken place regularly since 1992. We also want to encourage the strongest possible linkages between our Parliaments, recognising that this is an area in which we can do much more.

As Heads of our respective Governments, we are determined to promote exchange of visits at the highest level and to maintain the closest possible personal contact. We already meet and consult frequently. The Prime Minister has visited Indonesia many times since the Government came to power in 1996. The President wants this visit to Australia to highlight the importance of Australia to Indonesia. We need to nurture and develop these links, to send the strongest possible signal of our wish to develop the Comprehensive Partnership between our two countries.

Our Region

We are not only neighbours with close and deep bilateral ties but we are also both closely engaged in our shared region. We are determined jointly to provide a lead in tackling the major issues of our region. The work we have already done together on people smuggling, encouraging a regional response to the scourge of terrorism and bringing the great faiths of our region together shows what we can do. Reflecting Australia's significant and warm bilateral ties with all the countries of East Asia, Indonesia recognises and supports the inclusion of Australia in the process of integration in the East Asian region.

For the Government of Australia,

The Hon John Howard MP, Prime Minister

For the Government of the Republic of Indonesia

HE Dr Susilo Bambang Yudhoyono, President

4 April 2005