Prime Minister Anthony Albanese will on Tuesday unveil a $2 billion fund to boost Australian trade and investment in South-East Asia as the government tries to build stronger commercial ties with the booming region.
The government has signalled that it wants to expand its economic relationship with the region, both to bolster Australia’s prosperity but also to reinforce its strategic position in major emerging economies like Indonesia and Vietnam.
Now it’s revealed it will accept a key recommendation from its special adviser Nicholas Moore, who recommended last year the government establish a “strategic investment facility” for South-East Asian infrastructure projects, drawing on Export Finance Australia.
The new fund will be called the South-East Asia Investment Financing Facility with a particular focus on clean energy and infrastructure projects.
It comes almost five years after the Morrison government established the Australian Infrastructure Financing Facility for the Pacific, which uses grant funding of up to $1 billion and long-term loans of up to $3 billion to back infrastructure development in the Pacific.
Mr Albanese is expected to make the announcement at a major lunch on Wednesday in front of dozens of CEOs from both Australia and South-East Asia as part of the Australia-ASEAN summit in Melbourne.
Mr Albanese will say the fund will demonstrate Australia can add “value” as “an exporter of knowledge, and a sharer of expertise”.
“Australia and South-East Asia must together face this moment with a sense of optimism — and urgency,” he will say.
“Because while there is so much untapped potential — there is not unlimited time. We must act together — and we must act now.”
“To engage the digital economy to support our region’s social and economic development. To turn our commodities into higher-value exports in competitive global markets. And to leverage our expertise and technology to meet the region’s shared energy security needs.”
He’s also expected to commit an additional $140 million over four years into the Partnerships for Infrastructure Program which is designed to help nations develop new telecommunication, transport, and energy infrastructure, as well as an additional “landing pad” for Australian businesses in Jakarta and Ho Chi Minh City.
Roland Rajah from the Lowy Institute told the ABC that while there weren’t yet many details on the fund, on the face of it the announcement appeared to be a “really good outcome”.
“Two billion is not huge to South-East Asia but it’s definitely meaningful and it is a good start,” he said.
“The other welcome thing is that the government is intent on using the facility to really leverage Australian knowledge and expertise on clean energy.
“And that will be the real test for this. Whether Australia can do that and really deliver catalytic support that unlocks even greater benefits.”
Australia’s peak body for international development cautiously welcomed the fund but Australian Council for International Development CEO Marc Purcell said the details of the new financing facility should be examined.
“In particular, we will need to see what proportion of finance is delivered as loans to governments of developing countries, and how much is private sector funds mobilised to address climate change,” he said.
Mr Albanese will hold a number of bilateral meetings with a host of South-East Asian leaders on Tuesday before sitting down with all nine leaders for a formal dinner.
The main discussions between Mr Albanese and the other leaders will be held on Wednesday.