Ramos-Horta calls on Australia to spend big in East Timor, Sydney Morning Herald, 22 May 2022
A response to ‘In their strategic interest’: Ramos-Horta calls on Australia to spend big in East Timor. Chris Barrett, Sydney Morning Herald, 22 May 2022.
The new Australian government has been clear about changing our relationship with the region, and they have got off to an excellent start within days of taking office.
I am reassured by this speed of action because, from my business experience, I know that some action is better than none. If you do not stand up and take an initiative in your strategic interests, someone else will step in for their own benefit.
We need to help Timor-Leste, as HE President Jose Ramos-Horta says in his Sydney Morning Herald interview, but we also need to help the region as a whole. Australia is now in a great position to take the initiative and build a wide-ranging Asia–Pacific Free Trade Agreement (FTA). We already have the base in place in our Regional Comprehensive Economic Partnership Agreement (RCEP). We now need to add more Southeast Asian countries, such as Timor-Leste and the Pacific nations. RCEP is already the world’s largest FTA, so it must have got the basics right and be fundamentally appealing. Let’s make widening it a priority.
A new larger RCEP could be an agreement that fulfils Minister Penny Wong’s ambition to define 21st-century collaboration in the Asia–Pacific for generations to come. It would protect each nation’s sovereignty and culture and, at the same time, create a level, regional playing field on which all countries work together for mutual benefit.
My business experience has provided me with some insights into business in the region. I began my business career by establishing Transglobal Marketing NT in 1991 in Australia. We then established our business East Timor Trading, in Dili 20 years ago.
East Timor Trading Group’s 20-year plan includes creating the conditions for employers to employ more Timorese people. An aspect of that is the US$20 million Discovery Business Industrial Zone we are currently building in Dili, which will be a turnkey facility for its tenants. Our 20-year plan growth aspiration is that we will employ 1% of the Timor-Leste population within that time. To have reached 20 years and to have such aspirations, businesses need a favourable policy environment. For example, if Australia is to establish an FTA for the Asia–Pacific region, the inclusion of a Double Tax Treaty would be a critical element. Companies do not like to pay taxes in two countries because it erodes their margins. They need the financial incentive to invest in another country and take on the unique risks connected with operating in a new environment, such as language, culture, laws, and the like.
A well-conceived, fair agreement will allow for cultural and business nuances but be practical enough to be a financial win-win for those involved. But in the absence of well-conceived and fair agreements, countries may well go with superficially appealing offers that may not be in their long-term best interests. So now is Australia’s time to be proactive. We need to show neighbouring countries and Australian businesses that we care about strengthening our relationships and building new opportunities.
Perhaps Australia could begin with an in-principal agreement based on the RCEP that says parties to an expanded FTA intend to work together respectfully, inclusively, and multilaterally. That we will develop mutually advantageous terms that encourage trade and investment, protect the environment, and grow cross-border employment and education in the region.
An agreement such as this could make Australia’s regional spending to build the sphere of influence that HE President Ramos-Horta calls for, the base of a new inclusive vision for the region. Doors like this do not open often.
Sakib Awan
Chairman, East Timor Trading Group