Mon Mar 4

Albanese to announce $2 billion financing facility to boost economic relations with Southeast Asia

Written by Michelle Grattan, Professorial Fellow, University of Canberra

Prime Minister Anthony Albanese will unveil a suite of financial and other incentives to boost Australia’s economic relations with Southeast Asia when he addresses the ASEAN-Australia Special Summit’s CEO forum on Tuesday.

A $2 billion Southeast Asia Investment Financing Facility will provide loans, guarantees, equity and insurance for increasing Australian trade and investment in the region, especially supporting its transition to clean energy and developing infrastructure.

The facility will be managed by Export Finance Australia.

Australia will also provide $140 million over four years to extend the current Partnerships for Infrastructure Program ^[1], which has been operating since 2021. This funding will assist Southeast Asian nations to improve their infrastructure development and hasten reforms to attract more diverse infrastructure financing.

The emphasis in this program has been on helping partners in the areas of transport, clean energy and telecommunications.

Among other measures, regional “landing pads” in Jakarta, Indonesia, and Ho Chi Minh City, Vietnam, will support Australian businesses to increase exports of technology services to the region.

Ten “business champions” – senior Australian business leaders – are to strengthen investment and trade ties with each of the Southeast Asian countries.

Business validity visas will be lengthened from three to five years, and the ten-year Frequent Traveller Scheme ^[3] will be extended to eligible ASEAN countries and Timor-Leste.

In his speech to 100 Australian and Southeast Asian CEOs, Albanese will say that in 2022 Australia’s two-way trade with ASEAN members passed $178 billion. That was more than Australia’s trade with Japan or the United States. Australia’s two-way investment with the region was some $307 billion.

“But we want to do more – to support regional growth and to realise mutual benefits. To deepen our ties and to boost the skills of our people,” Albanese says in his speech, released ahead of delivery.

“There is so much untapped potential,” the PM says, but “not unlimited time.

"We must act together, and we must act now.”

He nominates specific areas for action, which are

to use the digital economy to support the region’s social and economic development
to turn our commodities into higher value exports in competitive global markets
to back women’s equality in business leadership, and
to leverage our expertise and technology to meet the region’s energy needs.

“We want to ensure businesses in Southeast Asia can access the markets that are available in Australia including in infrastructure and the clean energy transition.”

Wong said the region faces ‘destabilising, provocative and coercive actions’. JOEL CARRETT/AAP

Meanwhile, Foreign Minister Penny Wong told the Maritime Cooperation Forum ^[4] at the summit the region faced “the most confronting circumstances […] in decades”.

“We face destabilising, provocative and coercive actions, including unsafe conduct at sea and in the air and militarisation of disputed features.

"We know that military power is expanding, but measures to constrain military conflict are not – and there are few concrete mechanisms for averting it,” Wong said.

Australia recognised “ASEAN centrality as key to the region’s stability and security, and we are committed to supporting ASEAN’s leadership,” she said.

She said Australia was working with ASEAN countries “to increase resilience to coercion, and to ensure waterways that serve us all remain open and accessible”.

Wong announced a further $64 million over four years, including $40 million in new funding, for enhancing Australia’s Southeast Asian maritime partnerships ^[5].

A further $222.5 million will go to supporting “resilience in the Mekong subregion”.

“A second phase of the Mekong-Australia Partnership will build on our existing partnerships to invest in water security, climate change resilience, combatting transnational crime, and strengthening sub-regional leadership.”

On Monday, Albanese hosted Malaysian Prime Minister Anwar Ibrahim for an official visit to Australia.

At their joint news conference, Anwar stressed that Malaysia sought good relations with both the United States and China.

Malaysia was “fiercely independent”. It remained an important friend to the United States and Australia, but that “should not preclude us from being friendly to one of our important neighbours, precisely China […] We do not have a problem with China,” Anwar said.