It has been a remarkable decade for Indonesia. Few countries have been through so much in such a short period of time -- the Asian Financial Crisis, the transition to democracy, terrorist attacks and the terrible tsunami of December 2004.

What is remarkable is that Indonesia has not just come through these changes, it has triumphed.

The variety of voices in the public debate in Indonesia and the vibrancy of the media are testament to the depth of the democratic roots that have been laid.

Indonesia's economy is growing at around 6 percent. And Indonesia has been at the forefront of the international fight against terrorism.

Not only that, Indonesia has also strengthened its regional and global leadership role at the same time -- particularly under the leadership of President Yudhoyono and particularly with Indonesia hosting last year's critical meeting of the UN Climate Change conference.

So, before I begin, I want to acknowledge and put on record that the Australian Government admires what the Indonesian Government has achieved in the past decade.

In Australia we have had a change of government. We have come to government committed to strong economic management, building a fairer Australia and investing in the future so that Australia is prepared to meet the challenges of the 21st century.

At the same time, we are committed to building a fairer Australia -- including for Indigenous Australians.

The new Australian government is also international in its outlook. We are committed to building strong relationships with our key partners -- like Indonesia.

But we also believe that foreign relations cannot be based solely on bilateral relations. To help underpin security, stability and prosperity we need strong regional institutions and we need to support the maintenance and the development of the global rules-based order.

That is the fundamental approach the Australian government brings to its relationship with Indonesia.

We want to work towards a better future for the people of Australia and a better future for the people of Indonesia.

The best way for us to do that, is in partnership. Australia and Indonesia are inseparable partners. Ours is a relationship that has evolved a lot in the last 60 years -- from the time when Australia first supported Indonesian independence to the strong, close and increasingly comprehensive partnership we have today.

Today I would like to speak about the partnership we have between Australia and Indonesia and how we should take this partnership forward.

The Australian and Indonesian governments share a common goal of economic development for our countries.

We have different circumstance and different attributes, but we are both after sustainable development for our people.

Today I discussed with President Yudhoyono the new country strategy that the Australian government has developed with its Indonesian partners.

The program will run for five years and is an indication of our long-term commitment to our relationship with Indonesia.

But economic development is mainly about the private sector. I recognize the hard work and commitment that goes into building and maintaining business relationships. Our job in government is to make it as easy as possible to do business.

We can also work regionally -- through the FTA we are negotiating between Australia, New Zealand and the member countries of ASEAN.

If we can link both of our economies to the wider region through this agreement, it will provide some real opportunities for growth.

We can also do more bilaterally -- I hope that the feasibility study into a free trade agreement between Australia and Indonesia will show that there are great gains to be made if we open up our economies more to each other.

We can work more broadly too -- particularly in APEC where business and investment facilitation is a key focus.

And we can work globally.

The World Trade Organization talks are at a critical stage and we need governments around the world -- supported by the voice of business -- to make a push to conclude an ambitious deal before time gets away from us.

Because it is the WTO that has set the stage for the remarkable growth in trade and the global economy over the past six decades.

Continued economic development is crucial to both our countries. But we also need to build a sustainable future for our countries and our region. And there is no greater challenge in building a sustainable future than climate change. We have to act to tackle climate change.

The economic cost of inaction will be much greater than the economic cost of action. Australia and Indonesia share the goal of reducing global greenhouse gas emissions.

For Indonesia, one of the biggest challenges is reducing deforestation. I was very pleased today that President Yudhoyono and I signed a Forest Carbon Partnership that commits our two countries to work together more closely in this area.

Around 20 percent of global greenhouse gas emissions comes from deforestation. So it is a critical element in the fight against climate change.

But land clearing is a path to a better economic future for people in many cases.

So how do we recognize the value of keeping rainforests and at the same time provide opportunities for economic development?

One answer to this question is to tie rainforest protection to emerging global carbon markets. We need to set a value -- a real dollar value -- on the carbon stored in rainforests. But before we can do that, we have to know how much carbon there is. That is where Australia can help.

The carbon credits from avoided deforestation -- in other words the preservation of rainforests -- could be an alternative source of revenue for Indonesia.

This is not a straightforward process. Carbon markets are still developing. But President Yudhoyono and I agreed today to develop a roadmap for linking forest carbon and global carbon markets.

There is real potential for Australia and Indonesia to lead the world here. We share a goal of having avoided deforestation recognized in future climate change agreements.

We will be working closely together in the lead up to the G8 meeting in Japan next month -- where President Yudhoyono and I will both attend the outreach session with its focus on climate change.

Australia and Indonesia have already shown that we can lead the world in other areas. The regional inter-faith dialog process that began in 2004 is a great example of this. It brings together people from Australia, Indonesia and from around the region to share their ideas and discuss their faiths.

I am a strong supporter of the inter-faith dialog and I want to see it continue and expand in the years ahead. I am pleased to announce today that Australia will host the next round of this dialog.

Climate change and interfaith dialog are both examples of Australia and Indonesia working together on global challenges.

Beyond cooperation on the big question of climate change and our work on interfaith dialog, our shared geography makes us partners in a wide range of matters.

For instance in fighting against terrorism. Australians and Indonesians have both suffered from the scourge of terrorism. We have seen innocent people murdered. And we have responded by strong, practical cooperation in preventing terrorism and tracking down the perpetrators.

I want to pay tribute to the close cooperation we have in this area -- particularly between our law enforcement agencies. I am committed to maintaining and strengthening that cooperation.

But our security cooperation is broader than counter-terrorism. We have the Lombok Treaty that sets the tone for this wider security cooperation.

And it provides a framework for increased cooperation in defense, law enforcement, and other critical areas including aviation and maritime security.

President Yudhoyono and I discussed the Treaty today and we agreed to develop a detailed plan for increased defense cooperation -- one of the key aims of the treaty.

This article is an edited version of Australia's PM Kevin Rudd's speech at a recent luncheon in Jakarta hosted by the Indonesia Australia Business Council (IABC)

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