November 25, 2013
Australia spy claim hurts cattle exports to Indonesia
State-owned Rajawali Nusantara Indonesia (RNI) has suspended talks with Australian cattle ranchers, citing trust issues between the neighbors, following the spying claim that escalated Australia-Indonesia diplomatic tension.
Rajawali Nusantara Indonesia (RNI) is the first Indonesian firm to freeze business ties with Australia due to the uproar sparked by reports that Canberra had spied on President Susilo Bambang Yudhoyono and his wife.
In September, RNI said it had sent a team to Australia to explore the possibility of investing around 350 billion rupiah ($29.91 million) in three or four existing cattle ranches, with the aim of importing 120,000 live animals a year. However, with this new development, Putro said RNI had already started talks with a New Zealand firm as an alternative candidate.
"We decided to halt talks on cattle ranches in Australia temporarily until the Australian government fulfills what the Indonesian government insists they do," RNI Chief Executive Ismed Hasan Putro told Reuters. "This is very important to build out mutual trust, respect and equality in the future."
Indonesia is a major importer of Australian agricultural products such as wheat and live cattle, while Australia is Indonesia's 10th-biggest export market. Indonesian officials said on Wednesday that the country was reviewing trade ties with Australia, worth more than US$11 billion last year, but that beef and cattle imports had not yet been hit.
The reports that set off the Indonesian outrage quoted documents leaked by former US National Security Agency contractor Edward Snowden, suggesting Australia had tried to monitor the phones of top Indonesian officials in 2009.
Indonesia has since announced that it will freeze military and intelligence cooperation, including cooperation over asylum seekers. Meanwhile, dozens of protesters burned Australian flags and images of Prime Minister Tony Abbott outside the heavily fortified Australian embassy in Jakarta for a second day on Friday, November 22.
