Australian government and Indonesia signed a bilateral loans AUD1.5 billion (US$1.09 billion) to tackle the COVID-19 outbreak around the archipelago - Photo by President Office

JAKARTA (TheInsiderStories) – Australian government and Indonesia signed a bilateral loans AUD1.5 billion (US$1.09 billion) to tackle the COVID-19 outbreak around the archipelago, said finance minister today. It comes after a decade the neighboring country’ aid to Indonesia has fallen by more than half, dropping from AUD515 million in the 2014 – 2015 financial year to AUD$255 million in 2020 – 2021.

“The Australia support that providing AUD$1.5 billion loans to Indonesia is the kind of support that we needs (to handle the COVID-19 pandemic),” said finance minister, Sri Mulyani Indrawati, in her speech at the economic cooperation between Indonesia and Australia in tackling the pandemic, on Thursday (11/12).

She said, the pandemic giving a very challenging task for all finance ministers in the world. To help the economy from the impact of the virus, she adds, need a combination fiscal and monetary policies.

“Fiscal instruments becoming one of the most important policies instruments when the economy and the people hit by this pandemic. With this context, the friendships and partnerships with Australia (and other countries) is very very encouraging and help us to handle this situation,” said Indrawati.

In July, both countries has activated the Indonesia – Australia comprehensive economic partnership agreement (CEPA)–covering A$18 billion (US$11.76 billion) of agriculture, education and health. Scott Morrison’ government looks to push the economy out of the COVID-19 pandemic through the deal.

Trade Minister Simon Birmingham in an official statement on May 7, Australian exporters will soon start reaping the benefits of the IA-CEPA, with the neighboring country receiving formal notification that Indonesia has completed its domestic ratification processes. He adds, the landmark trade deal with Indonesia would enhance export opportunities and deliver significant benefits for Australian farmers, businesses and investors.

He continued, securing a trade agreement with Indonesia has been a longstanding objective of his government, to further strengthen the strategic partnership between the two nations and further expand the choices available for Australian exporters. It will give a competitive edge to Australian exporters, particularly on the COVID-19 crisis, he adds.

“The economic stresses being caused by COVID-19 in both Australia and Indonesia make this agreement even more important, as it will provide an opportunity to better stimulate growth and investment across both nations during the recovery phase,” Birmingham stated.

When IA-CEPA will officially enter into force on July, it will mean that 99 percent of Australian goods will enter Indonesia duty-free or under significantly improved arrangements. Under the deal, wheat producers will have tariff free exports of up to 500,000 tones to Indonesia per year.

In addition, tariffs on frozen beef and sheep meat will be cut in half and steel producers will also get annual duty free access for 250,000 tones of rolled steel coil. For Indonesia, the deal offers greater access to Australia’ market caused the trade and investment relationship is smaller than Singapore, Malaysia, Thailand and New Zealand.

Indonesia is a growing market for Australian goods and services exporters. In 2018 – 2019, total two-way trade with Indonesia was worth A$17.8 billion, making Indonesia it the 13th largest trading partner for the country. This is dwarfed by China’ total trade value with both countries ($27 billion and $180 billion) in the same year.

As one of the fastest growing economies in the Indo-Pacific, Indonesia will be the world’ fifth-largest economy by 2030 with a population of over 270 million. As one of the fastest growing economies in the Indo-Pacific, Indonesia presents a significant opportunity for Australian businesses.

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Written by Editorial Staff, Email: theinsiderstories@gmail.com