JAKARTA — On March the 9th Australia and East Timor signed what Canberra’s foreign minister Julie Bishop called “a milestone” agreement on a long-awaited maritime boundary between the two countries.
The deal comes after years of acrimony during which Australia was accused of spying on East Timor and of bullying its tiny northern neighbour over a potential oil and gas windfall from the Greater Sunrise field in the Timor Sea.
“Throughout this long saga, there really isn’t much that the Australian Government can be proud of. It lied and cheated to short-change East Timor at every opportunity,” said Tom Clarke, spokesman for the Timor Sea Justice Campaign, an Australian organisation.
Estimates suggest the field could contain around 50 billion euro worth of hydrocarbons, much-needed money for East Timor, where oil and gas contributes between 80-90% of government revenue.
East Timor is a tiny country, with a land area around the same as the north of Ireland and a population of 1.3 million people.
Its existing oil and gas reserves will be depleted in less than a decade, and with little sign of growth in other parts of the economy, it badly needs this deal with Australia.
How much money it ends up getting will depend on fluctuating oil and gas prices and on what subsequent deal is worked out to extract and process the underwater oil and gas.
The companies with rights to drill in the field have floated, pun intended, the idea of a floating platform in the Timor Sea to process the gas there.
But Australia wants to pipe to Darwin and use existing facilities, which would mean an 80% revenue cut for East Timor.
The Timorese want pipe to East Timor and process there, giving a Dili 70% revenue cut but potentially allowing the Timorese to develop spin-off industries that could modernise its economy.
East Timor was invaded by Indonesia in 1975 after the previous Portuguese colonisers withdrew. Jakarta’s occupation was regarded as illegal and resulted in the deaths of around 200,000 Timorese before it in turn pulled out in 1999.
Australian soldiers led the international security forces that tried to restore order in East Timor after the Indonesians looted and destroyed the country as they left — but relations between Australia and the Timorese have since faltered over the boundary dispute.
Ironically, East Timor has since repaired relations with Indonesia and hopes to join the Association of Southeast Asian Nations, or ASEAN, a regional organisation headquartered in Jakarta.
It means the Australia-East Timor treaty is timely as it comes just before Prime Minister Malcolm Turnbull hosts the 10 ASEAN governments at a special summit in Sydney on March 17, the first such meeting to be held in the country.
Australia is in bind — seemingly torn between its security alliance with the U.S. on the one hand, and its lucrative trade with China on the other.
Australia has become nervous about China’s growing power across Asia — and in Australia itself.
Without naming China, Australia’s intelligence agency stated in its latest annual report that it had “identified foreign powers clandestinely seeking to shape the opinions of members of the Australian public, media organizations and government officials in order to advance their country’s own political objectives.”
At the same time American President Donald Trump’s ditching of President Obama’s signature foreign policy achievement, the Trans Pacific Partnership trade deal taking in Australia, the US and 10 other countries, including Japan, has caused serious concern about the future of the American presence in Australia’s near abroad.
A report commissioned by the Australian parliament, published on March 1st, said that “there remains uncertainty in Southeast Asia about the direction of U.S. policy in relation to the region.”
The summit with ASEAN leaders could prove to be a kind of middle ground as Australia tries to build a wider set of alliances amid growing US-China rivalry over trade, military tensions in the disputed South China Sea, and the prospect of some Southeast Asian countries becoming economic vassals of China
With a population of 638 million, ASEAN’s combined economic output of about 2 trillion euro is about twice Australia’s, which is in turn slightly bigger than the economy of Indonesia, ASEAN’s largest member-state. About 15% of Australia’s trade is with the ASEAN countries, making the bloc its third-largest business partner after China and the EU.
ASEAN is made up of a mix of countries such Buddhist-majority Myanmar and Thailand, wealthy city-state Singapore, The Philippines, Asia’s biggest Catholic-majority country, and Indonesia, a huge Muslim-majority archipelago.
Some Australians, such as former Prime Minister Paul Keating, have said Australia should eventually join ASEAN. Whether the Australian public would agree anytime soon is another matter, and the same goes for some of the ASEAN member governments.
The upcoming meeting has already been overshadowed by the withdrawal of the Philippine President Rodrigo Duterte. In 2016 Duterte caused uproar in Australia by making light of the 1989 rape and murder of Australian woman Jacqueline Hamill in a jail in Davao, the southern city where Duterte was mayor.
Cambodia Prime Minister Hun Sen may also cancel, after threatening to beat up anyone who shows up in Sydney to protest his recent disbanding of the main opposition party ahead of elections later this year.
Such snubs would not augur well for Australia’s prospects of better relations with the bloc as a whole.
But Australian membership could, in time, be viable, according to Professor John Blaxland, the head of the Southeast Asia Institute at The Australian National University.
“ASEAN is a broad church, diverse and flexible enough to accommodate,” he said.
For World Report, this is Simon Roughneen in JakartaShow