The State Government and WA’s Economic Future in the Indo-Pacific

Hugo Seymour

November 2018

Economics of the Indo-Pacific series // Volume 3 WA’s economic future in the Indo-Pacific

Contents

Executive Summary 3 Introduction 4 The WA Government’s International Economic Toolkit 6 Broadening WA’s Indo-Pacific Economic Engagement 8 The Need for a Lasting State Strategy 12 Policy Proposals 14 Endnotes 15 About the Author 18 About the Perth USAsia Centre 19

2 WA’s economic future in the Indo-Pacific

Executive Summary

• The emergence of India as a major economic power, and the continuing modernisation of Indonesia, Vietnam and wider ASEAN, means the Indo-Pacific has become the global economy’s most dynamic region. • As a trade-intensive and capital-importing state, Western Australia must take active steps to participate in the economic rise of its Indo-Pacific neighbours. Time-zone and geographic proximity alone will not guarantee WA has deep economic partnerships with these countries. • Successive WA governments have a strong track record in driving international economic engagement. The State Government maintains a suite of international partnerships and overseas offices resourced to build economic relationships, support industry and encourage trade and investment. • The strategic purpose with which WA governments have pursued economic partnerships with Northeast Asia, and more recently with Africa, should be further developed with South and Southeast Asia. • To ensure WA realises economic opportunities in the Indo-Pacific, the State Government should orient its international engagement towards the emerging global growth countries of India, Indonesia, Vietnam and wider ASEAN.

3 WA’s economic future in the Indo-Pacific

Introduction

The contemporary economic dynamism of South While WA has technical capability and and Southeast Asia, complementing Northeast competitiveness in these sectors, the state is Asia’s rapid development over the last half- yet to fully capture the economic opportunities century, is broadening the economic base of the presented by Indo-Pacific dynamism. In 2017, Indo-Pacific region.1 New opportunities have Indonesia was WA’s seventh largest export emerged for Australia beyond its principal trade market, with $2.8 billion worth of exports and investment partners in the United States, comprised predominantly of energy and Western Europe and Northeast Asia. With rapid agricultural exports.9 India was the state’s urbanisation and technological development in eighth largest export market, with $2.4 billion Southeast Asia, the Association of Southeast worth of exports concentrated in gold, minerals Asian Nations (ASEAN) is predicted to become and energy.10 These figures are marginal when the fourth largest economic bloc in the world compared to WA’s significant trading relationship by 2030.2 Indonesia is predicted to become the with China, where $60 billion worth of exports in fourth largest global economy by mid-century,3 2017 were driven by iron ore shipments.11 with Vietnam to become a top twenty economy in this time-frame.4 In South Asia, India is currently As an export-oriented and capital-importing the world’s fastest growing major economy5 state, WA’s international economic relationships and is predicted to become the second largest need to evolve with major shifts in the global by 2050.6 economy. A challenge for WA is that the state’s traditional bulk commodity exports are less This shift in the global economic centre of gravity likely to provide a foundation for developing to the Indo-Pacific generates tremendous new economic partnerships in the Indo-Pacific. opportunities for Western Australia. Sixty Indonesia, India and Vietnam are not resource- percent of the world’s population reside within poor countries. WA cannot expect that providing a two-hour time zone of Perth,7 and more than a secure supply of natural resources to these three billion middle class people will live in this countries will build relationships to the same zone by 2030.8 New economic opportunities extent as with Japan, Korea and China over the exist for WA exporters in the resources sector, last half-century.12 Fortunately, there is plenty as well as in agribusiness and advanced of scope to grow relationships in other sectors. manufacturing. Further, the unprecedented rise WA’s service exports were valued at only $6.8 of Asia’s middle class is increasing regional billion in 2016-17 (three percent of Gross State demand for education, healthcare, professional Product),13 while directly north of the state the and technical services. services sector now accounts for half of ASEAN’s economic growth.14

4 WA’s economic future in the Indo-Pacific

While WA will continue to be a resources-driven history of successfully building long-term economy, a more diversified set of economic international economic partnerships. This has relationships is needed to pioneer new trade been particularly evident with enduring WA and investment partnerships in the Indo-Pacific. government engagement with Northeast Asia, Particularly, an uptick in economic engagement as resource exports over the last half-century with rising South and Southeast Asia will help have laid the foundation for WA’s modern ensure WA remains connected into the growth development. To encourage WA’s participation corridors of the global economy. in the broader rise of the Indo-Pacific, the State Government should intensify, and in some The State Government has a role to play in cases reinvest in, its international economic advancing the international relationships engagement efforts with the region’s emerging required for South and Southeast Asia to invest major economies of India, Indonesia, Vietnam in WA’s skills and capabilities. In partnership and wider ASEAN. with industry, WA governments have a

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The WA Government’s International Economic Toolkit

The State Government plays a lead role for cooperation in mining and mining services, coordinating WA’s international economic energy production, education and training.21 engagement. Australian states and territories do not conduct diplomatic relations or sign The State Government and its departments also trade agreements. Yet, state governments can enter into other MoU with foreign governments, and do enter into cooperative arrangements regional market zones and international with foreign national and provincial institutions. These arrangements outline governments, regional market zones and capacity building, investment facilitation and international economic institutions. These partnership programs specific to certain sectors formal partnerships establish mechanisms to and/or fields of government administration. encourage trade and investment, and work to For example, WA and the Common Market for advance the international relationships that Eastern and Southern Africa (COMESA) have underpin economic activity. Programs include an MoU focused on whole-of-sector mining 22 cooperation in areas of industry regulation, and petroleum capacity building in Africa. government administration and capacity In the Indo-Pacific, WA and China’s National building, often conducted with industry and the Development and Reform Commission struck Australian Government.15 a resources- and investment-focused MoU in 2011.23 The toolkit for the State The State Government operates trade Government’s international and investment offices abroad, led by economic engagement includes country or regional Commissioners. The overseas trade offices provide support ‘Sister State’ relationships, services both to WA businesses international memorandums of looking to trade and invest abroad, and understanding (MoU), overseas trade foreign businesses looking to trade and offices and programs pursuant to invest in WA.24 Their officers support WA State Agreement Acts. ministers on overseas visits, and coordinate government and business Sister State relationships between the delegations. Further, the trade offices State Government and overseas provincial collaborate with Australian diplomatic governments are established through MoUs. missions and Austrade offices, as well These outline frameworks for cooperation across as foreign governments. There are currently trade, investment and cultural fields, often eight WA Commissioners servicing ten global coordinated by a working group. Four of WA’s five offices (Figure 1),25 with six in the Indo-Pacific: Sister State relationships are in the Indo-Pacific: Jakarta, Kobe, Mumbai, Seoul, Shanghai and Hyogo Prefecture in Japan (established 1981),16 Singapore. The geographic distribution, Zhejiang in China (1987),17 East Java in Indonesia mandate and resourcing of the trade offices (1990)18 and Andhra Pradesh in India (2016).19 has evolved over the decades. For example, the As an example of activity, in the first four years State Government has had a permanent of the WA-East Java Sister State relationship presence in Japan since 1968. The most recent more than 200 business, technical and cultural major restructuring of the offices occurred in exchanges took place.20 The WA-Andhra Pradesh 2011-12, when the Singapore office was re- Sister State MoU outlines specific opportunities opened following the closure of the Los Angeles and Malaysia offices.26

6 WA’s economic future in the Indo-Pacific

Figure 1. Government of Western Australia Office network

United Kingdom South Korea Germany Japan Middle China East India United States Hyogo Hong Kong

Kenya Singapore Indonesia

Perth New Zealand

Western Australian Government Office Tourism Offices Western Australian Government Sub Office

Source: Department of Jobs, Tourism, Science and Innovation

Finally, the State Government often enshrines for initial royalty sums to be used to establish the terms and conditions of significant WA a WA-China Economic and Technical Research industrial projects into ‘State Agreement Acts’. Fund.28 The trust fund was used to encourage These legislative instruments are unique to the further examination of WA-China minerals and state’s development story, originally associated resources trade opportunities. The Australia- with the major Pilbara region mining projects China Natural Gas Technology Partnership Fund during the 1960s. When foreign investment (‘LNG Fund’), negotiated in 2002 pursuant to and overseas project proponents are involved, the 25-year North West Shelf gas supply deal State Agreement Act processes can facilitate to China, was modelled on the 1987 fund.29 The the coordination of joint training and research LNG Fund facilitates capacity building and skills partnerships between respective industry exchange programs, and during 2016-17 twenty- leaders and bureaucrats. During consultations nine senior Chinese oil and gas managers and for the landmark 1987 Channar iron ore joint government officers were trained in Perth.30 venture,27 the State Government negotiated

7 WA’s economic future in the Indo-Pacific

Broadening WA’s Indo-Pacific Economic Engagement

Over the last half-century, the leading sources economic engagement should not purely focus of foreign investment into WA have been from on Northeast Asia. As economic currents in the the United States, Western Europe and Japan.31 Indo-Pacific shift to its south and west, the State It is likely that over coming decades the level Government’s international engagement efforts of inbound investment from these long-term should shift accordingly. As Reserve Bank of economic partners will plateau.32 This will occur Australia Governor Philip Lowe has argued: as these countries’ share of the global economy 33 and outbound capital investment reduces, and “Developments in India and as investment flows are reconfigured towards Indonesia bear especially close the emerging drivers of global growth. As a capital-importing state, WA will need to find new watching. Both of these countries, sources of foreign investment to underpin and especially India, have very large complement its trading relationships. With the populations, and per capita incomes rise of South and Southeast Asia, these economic are still quite low. In time, the opportunities exist in the Indo-Pacific region. effects of economic progress in WA’s pursuit of economic diversification must these countries and others in the involve building new economic bridges with region could be expected to have a Northeast Asia, particularly in the services substantial effect on the Australian sector as China transitions towards a consumer economy, just as the development of and services driven economy. However, for WA China has.”34 to fully participate in the coming decades of Indo-Pacific growth, the state’s international

Figure 2. WA’s merchandise exports to Indo-Pacific economies, 2000-17

70000

60000

50000

40000

30000

(AUD millions) 20000

10000

0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

ASEAN Japan China (Excluding SARs and Taiwan) India Indonesia Republic of Korea

Source: Australian Bureau of Statistics International Trade in Goods and Services, Jul 2018, Table 36e

8 WA’s economic future in the Indo-Pacific

Beyond Northeast Asia, WA’s trade relationships vast volumes of ore. As such, WA’s iron ore trade in the Indo-Pacific remain underdeveloped, with to Northeast Asia, which began in the 1960s with WA’s economy not substantially connected with Japan and rapidly accelerated with China during South and Southeast Asia (Figure 2). India has the mid-2000s, is unlikely to be replicated with receded from being a top four WA merchandise South or Southeast Asia.40 export partner in 2010-11 to the ninth largest in 2016-17 (with a current five-year growth If the state remains dependant on its traditional trend at -15.6%).35 Further, less than a tenth of export partners and sectors, there is a risk that the WA’s merchandise exports went to ASEAN in divergence between Indo-Pacific growth trends 2016-17.36 and WA’s trade relationships widens. A failure to develop new export markets will ultimately Given WA’s endowment of resources and result in the state’s economy being unable to world-class mining and petroleum industries, attract the level of foreign investment required the resources sector will be the cornerstone to underwrite WA’s prosperity. WA’s time-zone of the state’s economy for decades to come. and geographic proximity to rising South and Further opportunities, particularly in petroleum Southeast Asia have thus far not guaranteed supply and petroleum equipment, technology the development of advanced economic and services (PETS), will arise in South and relationships. As the Indo-Pacific share of global Southeast Asia. Over the next five years output and demand rises, and trade and capital Indonesia is predicted to transition from being flows increasingly occur between regional a net-exporter of liquefied natural gas to a net- economies,41 WA is not certain to succeed in importer,37 while ASEAN’s energy demand will developing new economic partnerships. likely rise at twice the global average through to 2040.38 India, whose energy demand could While natural resources have more than double in this period, is predicted to provided a bridge to develop increase the share of imports in its natural gas Northeast Asian economic ties, 39 supply from 31% to 45%. However, countries state strategies need to be focused in South and Southeast Asia are relatively well towards new countries and sectors endowed with mineral resources, and do not have large metal processing industries requiring to help engineer WA success in the broader Indo-Pacific.

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Box 1. New sectoral and country opportunities for WA in the Indo-Pacific Education and Training: Indonesia has a national policy of skilling 58 million more people by 2040.42 Through domestic reforms and the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), highly ranked universities and vocational education providers are to be allowed to operate in Indonesia in partnership with local providers.43 The Indian Government aspires to train 400 million more people by 2022, across the vocational and tertiary education sectors.44 Healthcare Services: Up to 85 million full time jobs will be created globally in the health, education and ageing sectors.45 India’s healthcare sector is expected to more than double in value from 2016 to 2020 (to $364 billion).46 Indonesia’s national policy of universal healthcare and an expanded hospital system is predicted to triple the 2014 size of its healthcare system by 2020.47

Vietnam: Vietnam’s economy is predicted to grow five-fold by 203548 and surpass the size of Australia, Malaysia and Thailand by 2050.49 The non-agriculture sector is growing at a 2:1 ratio to the agriculture sector, and Vietnam’s Services Trade Restrictions Index scores are better than the ASEAN average in all subsectors.50 Ho Chi Minh City leads Vietnam’s industrial zone development and urbanisation.51 Vietnam and Australia are both signatories to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), creating new access for trade and investment.52

One avenue for intensified State Government can focus on two-way industry development, engagement is where there is overlap in the roles sectoral regulation, skills exchanges and and responsibilities between WA and foreign training. As is being pursued in Africa (Box 2), provincial governments. In areas where WA has this form of engagement can drive capacity public and/or private sector capacity, provincial building, advance regulatory convergence and governments in South and Southeast Asia have establish relationships that can be leveraged to enormous demand and ambitious development support new business activity. policies. In India, provincial governments similarly have a large share of responsibility The State Government has established for the delivery of education, healthcare, social partnerships with two of South and Southeast infrastructure and utility services.53 The State Asia’s most promising growth provinces. Government, through its departments and East Java now contributes fifteen percent of 54 government trading enterprises, has expertise Indonesia’s Gross Domestic Product. Andhra in training and accreditation models, healthcare Pradesh, identified as one of the ‘Ten Priority systems, public infrastructure, sustainable States’ in the Australian Government’s India agriculture and fisheries, energy generation Economic Strategy, is India’s top ‘Ease of Doing and network management. There is scope for Business’ state and is currently growing at 55 the State Government to enhance both existing 11% per annum. In both provinces, economic and pursue new cooperative international opportunities exist for WA’s public and private partnerships across these fields. Programs sector in the education and training, healthcare,

10 WA’s economic future in the Indo-Pacific

mining and petroleum equipment, technology the additional sharing of market intelligence and and services (METS and PETS), agribusiness, exchange programs, the ‘badge of Government’ infrastructure, innovation and e-commerce can be further leveraged to support economic sectors. Through intensified ministerial visits, engagement with these growth provinces. industry and Austrade supported WA missions,

Box 2. The WA Government and partnership building in Africa There is estimated to be over $30 billion worth of investment by Australian companies in Africa, predominantly in oil, gas and minerals exploration and production.56 WA companies constitute 92 of the 134 ASX-listed companies there, operating 231 mining projects across 29 African countries.57 The State Government has identified Africa as holding not only significant potential for minerals and petroleum production, but also in the agribusiness, manufacturing and service sectors. Africa’s population of 1.2 billion people, with its growing consumer class, will double by 2050.58 Supported by a trade office in Nairobi, the State Government has since 2014 partnered with COMESA under an MoU. The WA-COMESA Joint Working Group coordinating training and capacity building programs in mines and petroleum regulation, sustainable mining practices, occupational health and environmental safety. Programs have taken place in Africa, such as in Ethiopia and Kenya, as well as in Perth during the Africa Down Under conference.59 The State Government is actively leveraging WA’s established industry presence, and domestic regulatory expertise, to encourage a more diversified economic partnership with Africa. The purpose of industry development arrangements is to not only provide an advantage to WA companies operating in Africa, but to enhance relationships that can underpin new trade and investment lines.60

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The Need for a Lasting State Strategy

Successive WA governments have long While there has been repeated WA efforts to pioneered international engagement initiatives drive economic engagement with South and that have been the first of their kind for an Southeast Asia, there has been at times a lack Australian state (Box 3). While the strategic of long-term focus and consistency in resource objectives of the trade offices has changed over allocation. This is evidenced by changes in trade time,61 as has the intensity of activity under office locations over the last thirty years. WA different Sister State relationships,62 both set trade and representative offices in Bangkok, the precedent of WA governments working with Calcutta, Chennai, Hangzhou, Hong Kong, Kuala industry to successfully build new economic Lumpur, Los Angeles, Manila, Surabaya and relationships. Particularly with Northeast Asia, Taipei have all been established then closed.64 and more recently with Africa, these international Six of these ten offices were in growth cities initiatives have supported the private sector in in South and Southeast Asia. Of the nine trade generating economic benefits for the state. offices that have had a permanent presence since establishment, Mumbai and Jakarta have This first-mover practice by WA has also been been the only enduring offices in South and evident in South and Southeast Asia. In 1998 a Southeast Asia. The trade office in Surabaya, Commonwealth Parliament inquiry, published the capital of WA’s Sister State province in East just over two years after WA was the first Java, was relocated to Jakarta in 2003 and Australian state to establish a permanent never reopened.65 presence in India, commended the engagement model and the early success of its operations: Past WA government successes demonstrate that building long term economic partnerships “The Committee considers that the cannot be executed transactionally, but require successful operations of the Western lasting investment and engagement. This is particularly so in developing country markets, Australian Government in tailoring where business conditions can be challenging its services to the needs of Western and returns on private investment take time to Australian businesses are based on a realise.66 When configured to match realistic strong organisation that is proactive, commercial opportunities, State Government- focused, able to clearly identify led initiatives have been shown to drive the markets and practically support international relationships that help ensure WA’s businesses operating in-country. capacity is internationally sought. For example, it took nearly a decade for the WA-Zhejiang Sister The Committee considers that other State relationship to start generating significant Australian State Governments economic returns for WA.67 The rationale behind would benefit from adopting a engagement with Zhejiang Province was that its similar model to that of the Western port of Beilun was the first port of call for WA iron Australian Government.” 63 ore, and a broader inter-provincial government relationship would help drive the fledgling WA- China iron ore trade.68

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Box 3. WA ‘firsts’ in international economic engagement 1968 The State Government establishes a trade office in Tokyo to support import contracts for WA’s developing iron ore industry.69 1987 The State Government negotiates the Channar joint venture to supply iron ore to China. This was the first time China took a direct equity interest in an overseas mining project, also establishing the first WA iron ore mine since 1972.70 1990 WA and East Java embark on a Sister State relationship, following the State Government’s 1990 Indonesia Strategy. 1994 The WA Department of Training contracts with Indonesia’s Ministry of Education and Culture to train thousands of Indonesian students and teachers, funded by the Asian Development Bank.71 1995 Perth hosts the International Forum on the Indian Ocean Region, following a March 1995 intergovernmental meeting on Indian Ocean cooperation in Mauritius. A State Government delegation attends every official meeting leading to the establishment of the since-renamed Indian Ocean Rim Association (IORA).72 1996 As part of a new Indian Ocean Trade Strategy, the State Government formally opens an international trade office in Mumbai.73 1996 The first Indonesian Government overseas health study tour travels to Perth, where executive directors and senior professionals from 29 Indonesian hospitals visit WA’s major hospitals. The WA Health Export Unit contracts to provide health services in Indonesia and promote WA as a medical treatment destination.74 1997 The State Government negotiates with Austrade a state-dedicated position in Austrade’s Bangkok office, known as the ‘Bangkok model’.75 2011 The State Government signs a resources and investment-focused MoU with China’s National Development and Reform Commission (NDRC), the first ever MoU between the NDRC and a foreign provincial government.76 2017 The State Governments appoints WA’s first Minister for Asian Engagement, a Trade portfolio focused on building WA’s economic and cultural relationships in Asia.

The current State Government has broken Further, Sister State relationships with Andhra ground with its international economic Pradesh, East Java, Hyogo and Zhejiang have engagement policies. The appointment of WA’s been reaffirmed.79 With the development first Minister for Asian Engagement means and execution of the overarching whole-of- there is a portfolio focused solely on enhancing government Asian Engagement Strategy,80 WA WA’s commercial and cultural relationships in will be taking steps to participate in the economic Asia.77 The reporting lines of all of WA’s trade rise of its neighbours. When implemented in offices have been directed to the Minister for South and Southeast Asia, the strategy will help State Development, Jobs and Trade, a break drive a state with lasting economic partnerships with previous disaggregated structures.78 in the Indo-Pacific.

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Policy Proposals

1. In consultation with industry, develop a WA-ASEAN Trade and Investment Strategy. This strategy could focus on opportunities in the education and training, healthcare, mining and petroleum equipment, technology and services (METS and PETS), agribusiness, infrastructure, innovation and e-commerce sectors; 2. Appoint a permanent Commissioner to the Association of Southeast Asian Nations (ASEAN), based in Jakarta with the ASEAN Secretariat; 3. Pursue a Sister State relationship with a province in Vietnam with a complementary economic profile to WA; establish an overseas trade office in Ho Chi Minh City; 4. With the finalisation of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), contribute to Australian Government programs and/or conduct complementary programs focused on enhancing IA-CEPA utilisation rates by WA industry; 5. In consultation with industry, develop a tailored WA-India Economic Strategy in response to the Australian Government’s India Economic Strategy; 6. Pursue a Memorandum of Understanding with the Indian Ocean Rim Association (IORA), leveraging WA’s historical role in the formation of IORA to establish a formal partnership. This could initially focus on sustainable fisheries management, aquaculture and agribusiness trade and investment; 7. Appoint further officers in overseas trade offices in South and Southeast Asia; 8. Enhance existing and establish new formal partnerships with India, Indonesia, Vietnam and ASEAN. The programs conducted pursuant to the partnerships could focus on industry development, sectoral regulation, capacity building, skills exchanges and training.

14 WA’s economic future in the Indo-Pacific

Endnotes

1 The Australian Government defines the ‘Indo-Pacific’ as “…the region ranging from the eastern Indian Ocean to the Pacific Ocean connected by Southeast Asia, including India, North Asia and the United States”. See Commonwealth of Australia, 2017 Foreign Policy White Paper, November 2017, 1. 2 Commonwealth of Australia, ASEAN Now: Insights for Australian Business, November 2017. 3 PwC, The World in 2050, February 2017. 4 Ibid. 5 Department of Foreign Affairs and Trade, Business envoy, April 2017. 6 PwC, The World in 2050, February 2017. 7 Department of Jobs, Tourism, Science and Innovation, Shared Time Zone http://www.jtsi.wa.gov.au/about-the-state/close-to-asian-markets/ shared-time-zone. 8 Commonwealth of Australia, 2017 Foreign Policy White Paper, November 2017. 9 Department of Jobs, Tourism, Science and Innovation, Western Australia Economic Profile, July 2018. 10 Ibid. 11 Ibid. 12 Minerals Council of Australia, Australian mining new frontiers South and East Asia, December 2017. 13 Department of Jobs, Tourism, Science and Innovation, Western Australia Economic Profile, July 2018. 14 Data 61, Commonwealth Scientific and Industrial Research Organisation,Sunrise Industries, March 2018. 15 Commonwealth of Australia, A Charter: Economic Diplomacy and Australian Business https://dfat.gov.au/trade/engage/economic- diplomacy/Documents/economic-diplomacy-business-charter.pdf 16 Department of Jobs, Tourism, Science and Innovation, ’35 years of friendship between Western Australia and Hyogo’ (News detail, 24 April 2017). 17 Department of Jobs, Tourism, Science and Innovation, ‘Western Australia, Zhejiang celebrate 30 years of friendship as Premier’s international mission begins’ (News detail, 10 November 2017). 18 Hon Colin Barnett MLA, Premier; Minister for Tourism; Science, ’25 years of kinship between WA and East Java’ (Media Statement, 16 November 2015). 19 Department of Jobs, Tourism, Science and Innovation, ‘New trade and cultural links forged with India’ (News detail, 11 December 2016). 20 Hon Hendy Cowan MLA, Deputy Premier; Minister for Commerce and Trade, ‘Australia Comes To Surabaya Launched’ (Media Statement, 23 June 1994). 21 Agreement On The Establishment Of Sister State Relations Between State Government of Andhra Pradesh – Republic of India And State Government of Western Australia Commonwealth of Australia, signed 11 December 2016 (entered into force 11 December 2016). 22 Memorandum Of Understanding between The Common Market For Eastern And Southern Africa (COMESA) and The Government Of Western Australia On Cooperation In The Field Of Mineral and Petroleum Resources, Agriculture, Vocational Training And Capacity Building, signed 31st January 2014 (entered into force 31st January 2014). 23 Memorandum Of Understanding Between The Government Of The State Of Western Australia Of The Commonwealth Of Australia And The National Development And Reform Commission Of The People’s Republic Of China On Promotion Of Investment Cooperation, signed 16 September 2011 (entered into force 16 September 2011). 24 In 2016-17, then-Department of State Development (responsible for WAGON) coordinated 348 international trade activities, assisted 499 exporters and 181 inbound investors. See Department of State Development, Final Report 2016-17, September 2017. 25 Department of Jobs, Tourism, Science and Innovation, Global officeshttp://www.jtsi.wa.gov.au/trade-with-wa/our-services/global-offices . 26 Evidence to Estimates Committee, Legislative Assembly, Parliament of Western Australia, Perth, 31 May 2011, 72c-83a (Hon Colin Barnett MLA, Premier; Minister for State Development). 27 A joint venture agreement between China Metallurgical Import and Export Corporation (CMIEC) and Hamersley Iron Pty Ltd, for the 30-year production and supply of Channar mine iron ore to China. See also Western Australia, Parliamentary Debates, Legislative Assembly, 29 October 1987, 5373, (Hon David Parker MLA). 28 Evidence to Estimates Committee, Legislative Council, Parliament of Western Australia, Perth, 24 October 1990, 106 (Hon Joseph Berinson MLC, Attorney General; Minister for Resources; Corrective Services). 29 Western Australia, Parliamentary Debates, Legislative Assembly, 17 October 2002, 2004b-2005a (Hon Clive Brown MLA). 30 Department of State Development, Final Report 2016-17, September 2017. 31 Department of Foreign Affairs and Trade, International Investment Australia 2017, August 2018. 32 Ibid. 33 PwC, The World in 2050, February 2017. 34 Philip Lowe, ‘The Next Chapter’ (Address to the American Chamber of Commerce in Australia, Perth, 21 September 2017) https://www.rba. gov.au/speeches/2017/sp-gov-2017-09-21.html. 35 Department of Foreign Affairs and Trade, Australia’s Trade by State and Territory 2016-17, February 2018. See also Department of Foreign Affairs and Trade, Australia’s Trade by State and Territory 2012-13, February 2014.

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Endnotes

36 Department of Foreign Affairs and Trade, Australia’s Trade by State and Territory 2016-17, February 2018. 37 Jennifer Mathews, Commissioner, Indonesia – Jakarta, Government of Western Australia, ‘The Government of Western Australia In Indonesia’ (Speech delivered in Perth on 26 June 2018). 38 International Energy Agency, Southeast Asia Energy Outlook 2017, October 2017. 39 Minerals Council of Australia, Australian mining new frontiers South and East Asia, December 2017. 40 Ibid. 41 Commonwealth of Australia, 2017 Foreign Policy White Paper, November 2017. 42 Jennifer Mathews, Commissioner, Indonesia – Jakarta, Government of Western Australia, ‘The Government of Western Australia In Indonesia’ (Speech delivered in Perth on 26 June 2018). 43 Benny Tjahjono, ‘Unlocking the dormant potential of universities’, The Jakarta Post (online), 5 April 2018, http://www.thejakartapost.com/ news/2018/04/05/unlocking-dormant-potential-universities.html. See also Hon Scott Morrison MP, Prime Minister; Senator the Hon Simon Birmingham, Minister for Trade, Tourism and Investment, ‘A New Chapter of Economic Partnership with Indonesia’ (Media Statement, 31 August 2018). 44 Department of Foreign Affairs and Trade, Business envoy, April 2017. 45 McKinsey & Company, What the future of work will mean for jobs, skills and wages, November 2017. 46 Department of Foreign Affairs and Trade, Business envoy, April 2017. 47 Erin Maree Lloyd, Group Head Nursing, Quality and Risk, Ramsay Sime Darby Health Care, ‘Universal Health System: Potential Business Opportunities’ (Speech delivered at Indonesia Australia Business Council Conference Surabaya – Making It Happen, Surabaya, 6 November 2017). 48 World Bank and Ministry of Planning and Investment of Vietnam, Vietnam 2035: Toward Prosperity, Creativity, Equity, and Democracy, 2016. 49 PwC, The World in 2050, February 2017. 50 World Bank and Ministry of Planning and Investment of Vietnam, Vietnam 2035: Toward Prosperity, Creativity, Equity, and Democracy, 2016. 51 Ibid. 52 Comprehensive and Progressive Agreement for Trans-Pacific Partnership, signed 8 March 2018, (not yet in force). 53 Mr Peter N Varghese AO, An India Economic Strategy to 2035: Navigating From Potential To Delivery, July 2018. 54 Hon Julie Bishop MP, Minister for Foreign Affairs, ‘New Consulate-General in Surabaya, Indonesia’ (Media Statement, 5 August 2018). 55 Mr Peter N Varghese AO, An India Economic Strategy to 2035: Navigating From Potential To Delivery, July 2018. 56 Woodside Energy Ltd, Submission 23 to Committee Secretary, Department of Foreign Affairs and Trade, Inquiry into Australia’s Trade and Investment Relationships With The Countries of Africa, 24 August 2017. 57 Department of Mines, Industry Regulation and Safety, Prospect Magazine, March 2018. 58 Commonwealth of Australia, 2017 Foreign Policy White Paper, November 2017. 59 Department of Mines, Industry Regulation and Safety, ‘Sharing WA mining expertise with COMESA’ (News detail, 25 February 2016). 60 Department of Mines, Industry Regulation and Safety, Prospect Magazine, March 2018. 61 Department of Industry and Resources, Annual Report 07-08, September 2008. 62 Joint Standing Committee on Foreign Affairs, Defence and Trade, Parliament of Australia, Report, Near Neighbours – Good Neighbours: An inquiry into Australia’s Relationship with Indonesia, (2014). See also Evidence to Joint Standing Committee on Foreign Affairs, Defence and Trade, Parliament of Australia, Perth, 15 September 1997 (Mr Ian Whitaker, Manager, International Trade Centre, Chamber of Commerce and Industry of Western Australia). See also Evidence to Joint Standing Committee on Foreign Affairs, Defence and Trade, Parliament of Australia, 15 September 2003 (Mr Ellis Griffiths, Director of Planning and Policy, WA Department of Culture and the Arts). 63 Joint Standing Committee on Foreign Affairs, Defence and Trade, Parliament of Australia, Report, Australia’s Trade Relationship with India, (1998). 64 Department of Jobs, Tourism, Science and Innovation, Global offices http://www.jtsi.wa.gov.au/trade-with-wa/our-services/global-offices. See also Hon Hendy Cowan MLA, Deputy Premier; Minister for Commerce and Trade, ‘Trade office planned for India before end of year’ (Media Statement, 17 February 1995). See also Evidence to Joint Standing Committee on Foreign Affairs, Defence and Trade, Parliament of Australia, Perth, 9 October 1997 (Mr Kenneth Steinbeck, Manager, Indian Ocean Desk, Department of Commerce and Trade). See also Department of Commerce and Trade, Annual Report 2000-2001, August 2001. See also Western Australia, Parliamentary Debates, Legislative Council, 21 June 2005, 3040b-3042a, (Hon Kimberley Chance MLC). See also Evidence to Estimates Committee, Legislative Assembly, Parliament of Western Australia, Perth, 31 May 2011, 72c-83a (Hon Colin Barnett MLA, Premier; Minister for State Development). 65 Hon Clive Brown MLA, Minister for State Development, ‘Surabaya trade office to close temporarily’, (Media Statement, 28 July 2004). 66 PwC, Institute of Managers and Leaders, Asialink Business, Match Fit: Shaping Asia capable leaders, August 2017. 67 Evidence to Joint Standing Committee on Foreign Affairs, Defence and Trade, Parliament of Australia, Perth, 15 September 1997 (Dr Eric Tan, Senior Vice-President, The Western Australian Chinese Chamber of Commerce Inc). 68 Evidence to Estimates Committee, Legislative Assembly, Parliament of Western Australia, Perth, 27 October 1993, (Hon Hendy Cowan MLA, Deputy Premier; Minister for Commerce and Trade). 69 Western Australia, Travel Report of Speaker’s Legislative Assembly Parliamentary Delegation to Japan, April 2014, Tabled Paper 1598, Legislative Assembly, 2014).

16 WA’s economic future in the Indo-Pacific

Endnotes

70 See also Western Australia, Parliamentary Debates, Legislative Assembly, 30 June 1987, 3267, (Hon Brian Burke MLA). See also Western Australia, Parliamentary Debates, Legislative Assembly, 29 October 1987, 5373, (Hon David Parker MLA). 71 Hon Hendy Cowan MLA, Deputy Premier; Minister for Commerce and Trade, ‘Training Dept to help Indonesia develop technical education system’ (Media Statement, 9 October 1994). 72 Evidence to Joint Standing Committee on Foreign Affairs, Defence and Trade, Parliament of Australia, Perth, 9 October 1997 (Mr Kenneth Steinbeck, Manager, Indian Ocean Desk, Department of Commerce and Trade). 73 Hon Hendy Cowan MLA, Deputy Premier; Minister for Commerce and Trade, ‘Govt’s business office in Bombay to open next week’, (Media Statement, 19 January 1996). See also Hon Hendy Cowan MLA, Deputy Premier; Minister for Commerce and Trade, ‘Regional businesses encouraged to use Trade Office in India, (Media Statement, 25 January 1996). 74 Hon Antony (Kevin) Prince MLA, Minister for Health; Aboriginal Affairs, ‘Indonesian health professionals to study procedures at Perth hospitals’ (Media Statement, 2 September 1996). See also Hon Antony (Kevin) Prince MLA, ‘Signing of MOU with Indonesian health service in Jakarta’ (Media Statement, 18 December 1996). 75 Joint Standing Committee on Foreign Affairs, Defence and Trade, Parliament of Australia, Report, Australia and ASEAN: Managing Change (1998). 76 Hon Colin Barnett MLA, Premier; Minister for Tourism; Science, ’New WA-China agreement’ (Media Statement, 16 September 2011). 77 Hon Bill Johnston MLA, Minister for Mines and Petroleum; Commerce and Industrial Relations; Electoral Affairs; Asian Engagement, ‘Plan for Jobs: Future jobs and skills to get WA back on track’, (Media Statement, 7 September 2017). 78 Public Sector Commission, Government of Western Australia, 2017 Machinery of Government changes https://publicsector.wa.gov.au/sites/ default/files/documents/psr_a4_detailed_2.pdf. 79 Hon Roger Cook, Deputy Premier; Minister for Health; Mental Health, ‘Indian Opportunities abound on Deputy Premier’s visit’ (Media Statement, 29 August 2017). See also Hon Bill Johnston MLA, Minister for Mines and Petroleum; Commerce and Industrial Relations; Electoral Affairs; Asian Engagement, ‘Minister Johnston visits Indonesia to advance opportunities’ (Media Statement, 22 September 2017). See also Hon Mark McGowan MLA, Premier; Minister for Public Sector Management; State Development, Jobs and Trade; Federal-State Relations, ’35 years of friendship between Western Australia and Hyogo’ (Media Statement, 24 April 2017). See also Hon Mark McGowan MLA, Premier; Minister for Public Sector Management; State Development, Jobs and Trade; Federal-State Relations, ‘Western Australia, Zhejiang celebrate 30 years of friendship as Premier’s international mission begins’ (Media Statement, 10 November 2017). 80 Hon Mark McGowan MLA, 200 Fresh Ideas For WA, January 2017 https://walabor.org.au/200freshideas.

17 WA’s economic future in the Indo-Pacific

About The Author

Hugo Seymour Research Officer

Hugo Seymour is the Research Officer at the Perth USAsia Centre. He develops policy content and publishes on Western Australia and Australia’s engagement in the Indo- Pacific region. Furthermore, he supports the Centre’s convening and administration of high-level foreign policy events. Hugo has previously worked at Francis Burt Chambers as an assistant to the barrister in civil litigation matters, and has contributed to the advocacy work of the Welfare Rights & Advocacy Service. He has volunteered with social justice and migration organisations, including the Australian Red Cross. Hugo holds a Bachelor of Laws and Bachelor of Arts from The University of Western Australia.

http://perthusasia.edu.au/hugo-seymour [email protected]

18 WA’s economic future in the Indo-Pacific

About the Perth USAsia Centre The Perth USAsia Centre, located at The University of Western Australia, is a non- partisan, not-for-profit institution strengthening relationships and strategic thinking between Australia, the Indo-Pacific and the USA. The Centre is a leading think tank focusing on geopolitical issues, policy development and building a strategic affairs community across government, business and academia. Since the Centre’s inception in 2013, we have collaborated with over thirty partners to convene more than four hundred events across sixteen cities in eight countries, engaging a world class community network of more than 6,500 strategic thinkers and leaders.

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19 The State Government and WA’s Economic Future in the Indo-Pacific

Hugo Seymour // November 2018

Economics of the Indo-Pacific series // Volume 3