Analysis and Commentary

Battery talks with Indonesia – ‘It’s value-adding stupid!’

Analysis and Commentary

By Peter Roberts

The Minister for Industry and Science Ed Husic is to visit Jakarta to further cooperation and collaboration with Indonesia on battery technologies and electric vehicles.

Husic’s two-day trip is a long overdue ramping up of Australia’s industrial relationship with our close neighbour – one that has often seemed neglected in recent decades as Canberra’s attention was fixed on bigger fish in North Asia.

Indonesia’s economy is fast developing, and given its huge size and entrepreneurial people is sure to become an economic force especially if we collaborate in its development.

Husic’s enthusiasm for the Indonesia relationship is welcome and he said: “We are determined as a government to keep building up our relationship with Indonesia.

“Indonesia shares our drive to grow strong and diverse clean energy supply chains, while building our respective battery manufacturing and critical mineral processing industries.

“My visit to Jakarta will enable our countries to forge further collaboration in growing the electric vehicle ecosystem, as well as our broader economic interests.”

My only concern is what exactly Husic means by ‘our respective’ industries.

It would be a great shame, and out of character for Husic, if Australia saw its role as one of providing critical mineral processing.

Our imperative as a nation is to halt our slide down the ranks of advanced economies.

Our economy has been hollowed out by our focus on undifferentiated commodities such that data released by the Harvard Kennedy School puts the country’s Economic Complexity Index (ECI) at 93rd among nations, down 12 positions in the past ten years.

The Harvard Index now places Australia between Uganda and Pakistan in the bottom third of monitored nations.

We are not the advanced nation we think we are, with our rich lifestyle supported by extractive exports and domestic industry driven by construction.

Yes, we have islands of excellence in industry – the sort of companies and technologies reported in @AuManufacturing – but these are being swamped in a sea of mediocrity.

This means we must add value in Australia to critical minerals, and we must aim to make advanced batteries and indeed electric vehicles – not just supply processed minerals to Indonesia for manufacture with their lower cost labour force.

In fact Indonesia has shown us the way here, moving to ban the export of unprocessed minerals.

We should do the same and when a minister travels overseas he or she should have tattooed on their forehead – ‘It’s value-adding stupid!’

Further reading:
Australia’s lack of economic complexity on display – again

Picture: Indonesia Travel/Jakarta

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