Can Indonesia become our most important ally?

The first step in answering this question will be for us to decide that we do want Indonesia to be an integral part of our world. Nothing in our national body language to date conveys a genuine desire for this to happen.

For example, we can take a look at the vexed issue of boat people. On every occasion that an Australian politician declares that he or she will 'turn back' the refugee boats and point them in the direction from which they came, we offend the Indonesian nation, as the refugees are not their citizens and the people smugglers are a criminal element of their population that they do not condone.

It is to our shame that the smugglers are often supported by the Australian underworld.

In fact, refugees are a bigger problem for Indonesia than they are for us, because Indonesia does not have the luxury of an offshore processing centre. The thousands of islands that make up their archipelago consist of endless kilometres of unpatrolled beaches that are easily accessible from the Asian mainland and absolutely impossible to patrol.

Clearly, we need a significant treaty with Indonesia that provides for a joint surveillance unit of substantial size, financed by both nations, to curb the flow of refugees in and out of Indonesia to the greatest extent possible. This must be supported by a strong legal framework, enacted by both nations, that gives real teeth to the operation.

Australiaand Indonesia can achieve this depth of partnership if it is part of growing alliance based on mutual trust between us. We are currently a long way from achieving this, but it is a goal worth heading for.

The boat people issue is really just one element in our very chequered relationship with Indonesia. We did not help them in their struggle for independence from the Dutch after World War 2 and we (rightfully) treated them with a degree of suspicion during the decadent years that Sukarno and Suharto were in power.

Our role in gaining freedom for East Timor widened the rift, even though our actions were correct, as they were when we asked Indonesia to account for the murder of five of our journalists around that time.

The Bali bombing which tragically caused the loss of so many Australian lives will forever be a very sensitive issue between us. The Michelle Corby saga is still a controversy in both nations, but I believe that Indonesia's tough stand on drugs is the correct one.

Independencefor the western sector of New Guinea will always be a festering sore, as the large and significant island of New Guinea should never have been split into parts by the British, Dutch and Germans. It is an example of absolute colonial arrogance.

But, good things have also happened, such as our relief effort in making a significant contribution to the rebuilding of Sumatra when that island was devastated by a tsunami. Indonesians will not forget that we stood with them during that tragedy.

There are also strong emotional links created by the agony of war when hundreds of Australian soldiers died on the infamous Sandakan death march in Borneo that the Japanese brutally forced upon them. Then, there was that horrible slaughter when 30 of our nurses were gunned down by the Japanese on a Sumatran beach. Both sites are places of pilgrimage that Australians will always honour.

All of this means that we must now take sound steps forward in developing the trust that should exist between good neighbours.

We could instigate a new era by initiating, negotiating and signing an Investment Agreement with Indonesia, something that is even stronger and closer than the one that I outlined for China last month.

This would not just set-out the terms upon which each nation can invest in the other, but it should contain a plan for both nations to enter into many joint ventures in which we invest together in commercial projects around the world, particularly in Asia, by combining the best of our resources and skills in doing so. In this way, we would share prosperity and build a sense of common purpose.

It will also be possible for us to have one Stock Exchange that enables ordinary citizens to invest in either nation.

Once this is done, further agreements regarding social, educational and cultural initiatives can follow. In particular, we should significantly expand our mutual defence arrangements to a far greater extent than that which we have with the United States, or are ever likely to have with China.

In fact, I would prefer to have an Indonesian military presence at Darwin in preference to American Marines. After all, if ever Australia has to defend itself in a military conflict, it will be important to have Indonesia on our side, as it would be difficult for any nation to attack Australia without doing something with Indonesia first of all, as its land, sea and airspace blocks their way here.

By doing this, both nations would save considerable defence expenditure and establish a regional presence of real stature.

A strong relationship with Indonesia which has genuine long-term depth makes real sense. It is the third largest democracy in the world - only India and the United States being larger. Its population of 280 million people has a rapidly-growing middle class who want to expand their lifestyle and their horizons.

They could choose Australia as their best partner in enabling and enhancing a prosperous future, yet our two-way trade is currently only about 15 billion dollars a year, a figure that needs rapid improvement. A step forward in this direction would be to capitalise on the marketing opportunities provided by the rapidly growing use of the internet by Indonesians for online trading.

As in all opportunities, there are problems. Corruption is widespread in Indonesia, and appears to be increasing rather than decreasing. This severely handicaps the prospects of good trading, but we should also acknowledge that there are more than a few Aussies who bend the rules of the marketplace mightily.

There are also religious and cultural sensitivities that we need to acknowledge and handle with thoughtfulness while seeking acceptance of some of the unique features of our way of life. But, we should take comfort from the fact that Indonesia is a far more secular state than most Islamic nations and seek to foster the spirit of religious toleration that we observe.

We should acknowledge that we have made some blunders along the way. For example, many powerful Indonesian leaders have been massively offended by Australia's actions over the live cattle trade incident, when we painted a picture of them as being barbaric.

The fact is that our Four Corners television documentary chose one small abattoir out of many because it happened to be run by poor types and, unjustly, made it look like a nationwide practice.

We not only offended the Indonesians - we inflicted unnecessary damage upon ourselves, particularly by causing hundreds of aboriginal stockmen in Northern Australia to lose their jobs and go on the dole when the cattle trade ceased and was then only party restored.

If we are serious in our quest to be a good neighbour to Indonesia, we need to rapidly upgrade the study of their language in our schools and universities, as well as enhancing our understanding of their culture.

I am told that Indonesian is one of the easiest languages for an English-speaking person to learn, so I intend to do some initial study of it to see if I can get into its basics in my old age. The exercise will help to keep my brain alive.

At least some reading of their history will get me started on getting a sense of the fabric of their national life, so I have just bought a book on the life of Sukarno, their first President. This is giving me an idea of where they began as a nation, and I can move from there in seeking to appreciate what will be the best way to further develop a valued partnership of good neighbours.

It seems to me that a solid relationship could do great things for both nations as we work together to create a significant role in shaping the Asian century and prospering as a result.