1

Sub Regional Economic Integrated Development

Timor-Leste, Indonesia and Northern Territory of Australia.
V GOVERNO CONSTITUCIONAL
Sub Regional Economical Integrated
Development Timor-Leste, Indonesia
and Northern Territory of Australia.
1. Synopsis

2. Background
1. Events
2. Unit Missions start up
3. Sub Regional Cooperation in South East Asia
4. Master Plan on ASEAN Connectivity


3. Action Plan (first approach)
1. Timeline
2. International Agreement
3. Scope of Activities
4. Flag projects
5. Guidelines for structure
6. Drivers of success
7. Conclusions

2
The TIA-GT is a combined initiative of the
governments of these countries, ignited by the
government of Timor-Leste in order to promote and
foster economic growth, as well as an integrated
sub-regional development between Timor-Leste,
Eastern Indonesia and Northern Australia.

So far, the leaders of the countries involved have
been demonstrating a strong support for this
initiative. The Indonesian government envisages it
as a major contribution to promote the much
required growth and development in Eastern
Indonesia and the Australian Government as a
great opportunity to foster the development of
Northern Australia, diversifying its industries that
have been mainly focused on mining. On his side,
the Government of Timor-Leste launched, in
September 2013, a Mission Unit for the negotiation
and establishment of the platform for cooperation
and sub regional integrated economic development
across Timor-Leste, Indonesia and Australia, under
the sponsorship and direct supervision of the
Prime Minister. Mr. Joo Mendes Gonalves,
former Minister of Economy and Development, has
been appointed as the Head of this Mission Unit
and Representative of the State.
The leitmotiv of this venture comprehends the start
up and foster of transnational manufacturing value
and logistics chains in this sub-region.
Considering the preferred Commercial Agreements
that Timor-Leste established with several
Geographies, namely the European Union, under
the Cotonou agreement, and also USA, China,
India, Australia and CPLP, the Community of
Portuguese speaking countries which includes
countries like Brazil, Angola and Mozambique.
Timor-Leste has the potential become a
manufacturing and logistic hub for the raw
materials and semi-processed products of the
surrounding Indonesian islands with the
technology and knowledge support of Northern
Australia, generating vast benefits for all parties
involved.
In order to accomplish a sustainable success, the
involvement of private sector and international
investors must be intensive and assertive, so as to
suitably contribute for the outline of the activities
and drivers of development. Nevertheless,
considering the present state of knowledge, there
are significant reasons to believe that there will be
an emphasis on matters such as Agribusiness,
Fisheries, Sea & Biodiversity besides Natural
Resources and Tourism.

TIA-GT (Timor-Leste, Indonesia and Australia Growth Triangle)
1/2
TIA-GT (Timor-Leste, Indonesia and Australia Growth Triangle)
2/2
For this reason, not only the issues of
infrastructure and physical connectivity will be
fundamental, but also a strong effort on Knowledge
Management & Human Capital Enhancement in
order to sustainably prepare the human resources
involved in these operations. The main idea will be
to start up with very simple and easy operations on
activities that may nurture the opportunities to
move to higher links of the value chain such as Life
Sciences & Biotechnology.
The sub-regional integration of value & logistics
chains requires liberalizing or seriously expediting
the flow of raw materials, products & services,
skilled labor, capital & finance, foreign direct
investment, as well as knowledge & intellectual
property, with several implications on the issues of
ASEAN connectivity.
Regarding physical connectivity, its core subject
concerns with the efficiency and competitiveness
of logistics and operations. Therefore, it requires a
thoughtful identification of necessities and sources
of funds, prioritizing plans and actions to set up
the infrastructure projects, in order to successfully
proceed with its expedite and efficient deployment.
People-to-people connectivity focuses on human
capital enhancement, innovation research &
development together, with other activities such as
socio cultural exchange like sports and cultural
events.
Concerning institutional connectivity, it must
address the overall consistency of procedures,
requiring a productive regulatory dialogue capable
of providing financial stability and trust, generating
a stable and reliable business and investment
friendly environment.
The concept of a Growth Triangle between Timor-
Leste, Eastern Indonesia and Northern Australia is
inspired on the experiences of proven success,
with operating models that can be properly
assessed, analyzed and adapted to local realities,
such as the main sub-regions promoted by ASEAN,
namely the SIJORI and the IMT Growth Triangles.
It is expected that this initiative will strongly
contribute towards promoting economic, social
and cultural development; attracting valuable
investment; promoting the development of
manufacturing industries; enhancing human
capital; strengthening the friendship and
cooperation ties between the three countries;
fostering & accelerating the process of accession
of Timor-Leste to ASEAN and fulfill the objectives
of the Strategic Development Plan of Timor-Leste.
Background
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Recognizing the potentialities of
an Integrated Regional
Economical Development
Framework with T-L and
Indonesia, comes the Idea by
former MED to launch an initiative
to start up a project in order to
foster it and to provide legal and
institutional support.

Events

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2010/May
Bilateral Meeting, Indonesia / Timor-Leste
Visit of PM Xanana Gusmo and former MED Joo Gonalves to Jakarta
Proposal by former MED to President Susilo Bambang Yudhoyono, during lunch
2011/Apr
Bilateral Meeting, RDT-L / NT Australia
Visit of Deputy Prime-Minister and Minister of Economy to Darwin
2012/Apr
Visit of former MED, Joo Gonalves to Jakarta
Meeting with Coordinating Minister for Economic Affairs of the R.I. Mr.Hatta Radjasa
2012/Nov
V Bali Democracy Forum Meeting of the Executive Leaders of 3
countries: PM Julia Gilard, President Susilo Bambang YUDHOYONO
and PM Xanana Gusmo
Restating the importance of Economic Cooperation and integration between Timor-
Leste, Indonesia and Australia.


Events

Statements of Chief Ministers of Northern
Territory of Australia, willing to join the process

2011/Apr - Paul Henderson

Visit of Deputy Prime-Minister and Minister of Economy & Development to
Darwin for the Bilateral Meeting between RDT-L and NT Australia

Issue raised with NT Chief Minister, who immediately supported and expressed
interest in being part of the initiative

2013/May - Adam Giles

During his visit to Dili, reiterated NT Gov. interest in pursuing with this
initiative

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Events

2012-May
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1 . The objective of the approach is to develop and implement
programs to strengthen connectivity between the two
Countries based on a multi-sectorial approach;

2 . The development may be implemented among others in Nusa
Tenggara Timur, Timor-Leste and whereas necessary, their
surrounding areas;

3 . To study and develop such approach, a J oint Task Force shall
be established between the two governments under a
Memorandum of Understanding;

4 . The Task Force shall report its work to the Sub-Committee on
Economic Cooperation under the Bilateral J oint-Commission
between Timor-Leste and Indonesia
Protocol signed between the Foreign Affairs Ministers of RDT-L
and RI, witnessd by the Pres. of RI and the P.M of RDT-L
1.2 Sub Regional Cooperation
in South East Asia
The sub-regional
initiatives usually
focus on less
developed areas of
the ASEAN region
with less favorable
infrastructure stock
and weak intra-
regional connectivity
and hence, most
projects involve
infrastructure
projects and trade
and transport
facilitation as well as
investment promotion
and facilitation.
The major three sub-regional
initiatives in the ASEAN region
include:
The Greater Mekong Sub-
region (GMS)
Cambodia, Laos PDR, Myanmar,
Thailand, Viet Nam + 2 provinces of PR
China (Yunnan Province & Guangxi
Zhuang Autonomous Region)

BIMP- EAGA, East ASEAN
Growth Area
Brunei Darussalam, Indonesia,
Malaysia, and the Philippines

IMT-GT,Growth Triangle
Indonesia, Malaysia and Thailand
Other sub-regional initiatives
related to ASEAN Connectivity
SIJORI Growth Triangle
Indonesia-Malaysia-Singapore Growth Triangle
ASEAN-Mekong Basin Development Cooperation (AMBDC)
Mekong River Commission (MRC)
Cambodia- Laos-Viet Nam (CLV) Development Triangle
Cambodia-Lao PDR-Myanmar-Viet Nam (CLMV)
Ayeyarwady-Chao Phraya-Mekong Economic Cooperation
Strategy (ACMECS)
Heart of Borneo (Brunei, Indonesia and Malaysia)

Master Plan on ASEAN Connectivity *
Key Elements of ASEAN Connectivity:
Physical Connectivity
Institutional Connectivity
People-to-People Connectivity

*Adopted by the ASEAN nations on 18/Nov/2010 in Ha Noi,Vietnam
Connectivity in ASEAN refers to the physical, institutional and
people-to-people linkages that comprise the foundational
support and facilitative means to achieve the economic,
political-security and socio-cultural pillars towards realizing
the vision of an integrated ASEAN Community
Physical Connectivity

Transport
Land Transport
Road infrastructure ASEAN/Asian Highway Network Map
Rail infrastructure Trans-Asian Railway Network
Maritime Transport Ring Shipping Route
Air Infrastructure Development ASEAN Single Aviation Market
ICT - Information & Communications Technology
ASEAN ICT Masterplan (AIM2015)
Energy
ASEAN Power Grid Network
Trans-ASEAN Gas Pipeline Project

Master Plan on ASEAN Connectivity
Ring Shipping Route
ASEAN Single Aviation Market
Trans-ASEAN Gas Pipeline Project
ASEAN Power Grid Network
Master Plan on ASEAN Connectivity
Institutional Connectivity
Trade liberalization and facilitation
Investment and services liberalization and facilitation
Mutual recognition agreements/arrangements
Regional transport agreements
Cross-border procedures
Capacity building program

People-to-People Connectivity
Education and Culture
Tourism
Physical Connectivity
Cheaper transportation and logistic costs
At the end, competitiveness

People-to-People Connectivity
Fill skill-shortage
Exchange learning
Expedite Innovation
New opportunity from service industry

Institutional Connectivity
Regulatory Coherence
Financial Stability
Overall Increase Business Predictability
Physical
Connectivity
People to
People
Connectivity
Institutional
Connectivity
Beyond Connectivity

Action Plan - UM TIA-GT

2013/Sep
UM TIA-GT Kick Off
(Timor, Indonesia & Australia - Growth Triangle)

Government Resolution n 20/2013, of the V Constitutional
Government of the RDT-L, published on 11th September;
Launched a Mission Unit for the negotiation and establishment of
the platform for cooperation and regional integrated economic
development across Timor-Leste, Indonesia and Australia;
Under the sponsorship and direct supervision of the Prime Minister
of RDT-L;
Appointed, as the Head of this Mission Unit and Representative of
the State, Mr. Joo Mendes Gonalves, former Minister of Economy
and Development.
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Mission Unit for TIA-GT
Operative Organogram
Head of
Mission Unit
& State Representative
NAT
Technical Support Team
Socioeconomic
Advisory
Institutional
& Legal
Advisory
NALA
Administration and Logistics
Support Team
Secretariat
Administration &
Logistic Support
Deputy Head
of Mission Unit
Senior
Advisor
Operations Macro Activities
Action Plan
1. Preparation of a MOU to start up the process
2. Signature of MOU
3. Set up an ad hoc tri-party independent working group
4. Prepare and approve an Agreement on Sub Regional
Integrated Economic Development to be agreed by the
3 countries, Timor-Leste, Indonesia and Australia
5. Signing of International tri-party Agreement
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To carry on with the
obligations concerning the
Protocol signed between
RDTL and RI in 2012/May/19
Immediately
Deadline 20/05/2014
Deadline 15/11/2014
Deadline 31/03/2014
Deadline 31/10/2014
(First Interaction)
Action Plan - Agreement
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Approving
Objectives
Strategies
Action Plans
Funding model



Launching
Agency for Regional
Integrated Economic
Development of Timor-
Leste, Indonesia and
Northern Territory of
Australia
Agreement on Subregional Integrated Economic
Development to be agreed and signed by the 3
countries, Timor-Leste, Indonesia and Australia.
Deadline 31/12/2014
Scope of Activities
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Economy
Business development
Agribusiness (including Livestock)
Fisheries
Manufacturing
Tourism
Energy / Natural Resources
Technology
Infrastructure
Inter-regional connectivity
ASEAN Connectivity
Management
Tourism
Knowledge
R & D
Social

Cultural and
Social Interchange

Health

Education &
Culture

Sports
Key Opportunities from an Indonesia-Australia
Economic Partnership
With complementary patterns of consumption and production between Indonesia and Australia, the IA-BPG has
identified the following key areas for partnership opportunities:

Developing cross-border, integrated industries and value chains
To supply both domestic and third-country markets.

Enabling greater sharing of knowledge and technology
through harmonising standards and regulations; recognising qualifications; recognising intellectual
property rights; establishing dispute resolution mechanisms; building education, training and professional
development cooperation; facilitating joint ventures and business licensing; and encouraging movement of
skilled people between the two countries.

Facilitating economic cooperation through an enhanced program
of development assistance
that is focused on building economic capacity, developing skills, sharing market information, enabling
market access, facilitating development of value chains, building local businesses and enhancing
cooperation between government development assistance activities and the private sector.

Building two-way investment
by developing competitive markets, lowering barriers, reducing risks and promoting investment
opportunities, including joint ventures

Position Paper on Considerations towards the Indonesia-Australia Comprehensive Economic Partnership Agreement,page 6
Strategic Models for Partnership
The IA-BPG believes that there are a number of prime areas of opportunity which could serve as models for strategic partnerships.
These opportunities can become models upon which the economic relationship between Indonesia and Australia can be built and hence
a permanent IA-BPG should be established to discuss more comprehensively how to best realize these opportunities.
Securing domestic food availability and participation in global food
supply.
Advanced education and human resources development.
Improving health and quality of life.
Technology sharing and development.
Establishing integrated value chains to increase consumer choice.
The IA-CEPA should promote cooperation in the manufacturing sector and create cross-border value chains to develop products for a
world market. Indonesia is capable of becoming a manufacturing hub for Australia similar to the way Australia has previously engaged
with Japan and currently engages with China.
Pilot Projects.In
order to build momentum for the IA-CEPA the IA-BPG has identified and agreed on two specific pilot projects which can be implemented with immediate effect.
1. A Healthy Diet Support for the MP3EI goal of increasing consumption of red meat in Indonesia, and also consumption of Indonesian tropical fruit in Australia.
2. A Skilled Workforce To support increased skills development in Indonesia and Australia by facilitating easier movement of skilled people between countries and
increased capability transfer

Position Paper on Considerations towards the Indonesia-Australia Comprehensive Economic Partnership Agreement, page 8 to 9
Lighthouse Projects
The archipelago economy: Unleashing Indonesias Potential
McKinsey Global Institute September 2012, Page 82
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Businesses need to find new ways of partnering with
government to address critical barriers to growth.

Businesses will need to work together with Indonesia's government to
address many of the challenges ahead. However, cooperation between
the public and private sectors is not easy, and businesses will need to
learn from the failures and successes of past partnerships around the
world. Understanding the priorities of central and local government,
and determining how or whether these align with business priorities, is
an ever-present imperative.

One option would be to pilot partnerships through "lighthouse projects
that focus on a particular area (e.g.,food waste) and/or defined
geographical area before scaling up more broadly to help ensure that
these projects assemble the right set of actors
Lighthouse Project
Integrating a Sub Regional Logistics & Value Chain
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Considering the preferred Commercial Agreements
that Timor-Leste established with several Geographies

European Union (Cotonou agreement) + USA + China + India + Australia

ASEAN + CPLP (partial) For consideration in the future

Setting up Timor-Leste as a Logistic and Manufacturing Hub for
Raw materials & Semi-processed products
of the surrounding Islands.

Development Macro drivers
Agribusiness, Fisheries, Sea & Biodiversity
Knowledge Management & Human Capital Enhancement
Natural Resources
Starting with very simple and easy operation, move to higher links of
the value chain

Life Sciences & Biotechnology.
Sub Regional Integration of
Logistics & Value Chains
Timor Leste
Australia
Indonesia
Requires
Liberalizing or seriously expediting
the flow of:
Raw Materials, Products & Services
Skilled Labor
Capital & Finance
Knowledge & Intellectual Property
Physical Connectivity
Efficiency & competitiveness
Identification of necessities,
Prioritize and planning activities
Setting up and deployment

People-to-People Connectivity
Human Capital Enhancement
Innovation Research & Development
Socio Cultural exchange
(Sports +Cultural Events)

Institutional Connectivity
Overall Consistency of procedures
Productive Regulatory Dialogue
Financial Stability and Trust
Stable and Reliable Business Environment
Agency Guidelines for structure
Directive Committee
Composed with representatives of the 3 countries
Executive chairman + Directors
Secretariat location (Considering Dili)

Strategic Institutional Supporting Tools
On the Demand side
Promotion and advertising - Hunting Unit
Client Support, Nurture and Fidelity - Farming Unit
Joint Ventures Support
On the Supply side
Business Location Management
Venture Capital and Fund Management
Human Capital Enhancer
Technology, Management & Knowledge
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Establishment of a
formal unit to lead,
energize and supervise
the process
TIA-GT Drivers for success
Institutional Model
Tested with many successful cases
Adaptable to local conditions (TL+I+A - Growth Triangle)
Strong Leadership
Agency & Strategic Institutional Supporting Tools
Flag projects (it can be done!)
Strong and direct involvement of the top leadership of the 3 countries
KEY - Commitment, Involvement, Attachment & Belief




National Pride WE CAN DO IT!!
Timor Leste + Indonesia + Australia
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Players / Stakeholders
Entrepreneurs and private sector
People (pride)
Governments & Public Institutions
Tools
Business Facilitation
Human Capital Enhancement
Knowledge Management

TIA- GT
A Growth Triangle between
Timor-Leste, Indonesia and Australia
This initiative:
To be considered under the context of the accession process of RDT-L
to ASEAN and fulfill the requirements of the Master Plan on ASEAN
Connectivity
Inspired on the experiences of proven success, with operating model
that can be properly assessed, analyzed and adapted to local realities
such as the sub-regions promoted by ASEAN
Will strongly contribute towards:
Promoting economic, social and cultural development;
Attracting valuable investment ;
Promoting the development of manufacturing industries;
Enhancing human capital;
Strengthening the friendship and cooperation ties between the three
countries
Fostering & accelerating the process of accession of Timor-Leste to ASEAN
Fulfill the Objectives of the Strategic Development Plan of RDT-L
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Obrigado
barak
V GOVERNO CONSTITUCIONAL
Indonesia Economic Corridor
1. Sumatra Economic Corridor as a Center for
Production and Processing of Natural Resources
and As Nations Energy Reserves

1. Java Economic Corridor as a Driver for National
Industry and Service Provision

2. Kalimantan Economic Corridor as a Center for
Production and Processing of National Mining and
Energy Reserves


1. Sulawesi Economic Corridor as a Center for
Production and Processing of National Agricultural,
Plantation, Fishery, Oil & Gas, and Mining

2. Bali Nusa Tenggara Economic Corridor as a
Gateway for Tourism and National Food Support

3. Papua Kepulauan Maluku Economic Corridor as a
Center for Development of Food, Fisheries, Energy,
and National Mining
MP3EIMasterplan, Pag. 46