Australia Prepares $650m Loan for Indonesia

LEGIAN ~ Australia will contribute about US$650 million to a standby facility should Indonesia need support to weather the global economic crisis, Prime Minister Kevin Rudd said during a trip to Bali this week.

Rudd made the announcement during a visit on Wednesday to co-host regional talks on democracy with President Susilo Bambang Yudhoyono.

The pair held bilateral talks on the sidelines of the inaugural meeting of the Bali Democracy Forum, which was also attended by East Timorese Prime Minister Xanana Gusmao and ministers from around 30 countries.

“The scope … of our proposed participation is in the vicinity of AUS$1 billion ($656 million),” Rudd told reporters, referring to the loan facility.

Indonesia is also seeking assistance from Japan, the European Union, the Asia Development Bank and the World Bank.

“Australia will of course act as a friend and good neighbor of Indonesia as we have done in the past, a decade ago, providing a financial facility of around AUS$1 billion in a different financial crisis,” Rudd said.

“This is the sort of thing good friends and good neighbors should do to help one another in times of global financial crisis.”

Rudd also announced that Australia would host a conference on the future of the Australia-Indonesia relationship in Sydney from 19 to 21 February 2009.

“The conference will bring together up to 120 leading Indonesians and Australians from a diverse range of backgrounds, such as government, business, the media, universities, community organizations, faith groups and youth,” his office said.

“It will give people from different backgrounds the opportunity to generate ideas about the Australia-Indonesia relationship, and to help shape its future.”

Canberra would also provide AUS$3 million ($2 million) to support the new Bali Forum and a democracy institute established by the Indonesian presidency.

Both initiatives are intended to promote democracy in the Asia Pacific through dialogue and non-binding commitments.

“It is in Australia’s own national interests to support an initiative aimed at strengthening democratic process and good governance in the Asia Pacific,” Rudd’s office said in a statement.

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