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Australia Offers Indonesia $1.5 Billion Loan as the Country Falls Into First Recession in 22 Years -

Rejected submission by upstart at 2020-11-13 21:55:00
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upstart [soylentnews.org] writes in with an IRC submission for c0lo:

Australia offers Indonesia $1.5 billion loan as the country falls into first recession in 22 years - ABC News [abc.net.au]:

Australia has announced it will provide a $1.5 billion loan to Indonesia as the country falls into its first recession in 22 years while it grapples with rising COVID-19 cases.

Key points:

  • Indonesia is an important regional strategic partner to Australia
  • The holiday island of Bali has been the worst hit due to a halt in international tourism
  • The loan is seen as a largely symbolic gesture

In a joint statement, Treasurer Josh Frydenberg and Indonesian Finance Minister Sri Mulyani Indrawati said the loan would be used to support Indonesia's budget and was repayable over 15 years.

"COVID-19 poses an unprecedented challenge to the Indo-Pacific and the world," the statement read.

"Indonesia's recovery and ongoing prosperity is critical to the stability and security of our region.

"The loan builds on our highly valued economic relationship and [a] strong record of bilateral cooperation."

Indonesia's gross domestic product shrank by 3.49 per cent in the third quarter of 2020, following a 5.32 per cent contraction in the previous quarter.

The holiday island of Bali has been the worst hit due to a halt in international tourism [abc.net.au] — suffering a 12.28 per cent drop in gross regional domestic product in the third quarter of 2020, following a fall of 10.98 per cent in the previous quarter.

A landmark free-trade agreement between Australia and Indonesia came into force in July this year [abc.net.au], but has not been as fruitful as expected due to domestic expenditure to mitigate the pandemic.

Australia's economic devastation caused by COVID-19 saw its largest budget deficit since World War II in the last financial year, and is projected to surpass $213 billion this financial year [abc.net.au].

Peter McCawley, an Asian economic expert currently based at the Australian National University, told the ABC the loan figure of $1.5b "will not be a strain for Australia".

'Symbolic gesture' to avoid capital flight from Indonesia

Several economists have played down the significance of the loan, saying that it will not have a major impact on Indonesia's current economic troubles.

Arianto Patunru, an Indonesian economist from the Australian National University, told the ABC the loan is largely a "symbolic sign".

"Australia's share of Indonesia's total imports is less than 3 percent, [while] Indonesia's share in Australia's total imports is also less than 3 per cent."

However, the gesture by Australia will still assist Indonesia in calming the markets and restoring investor confidence, Mr Patunru said.

"Even if the loan is not used, the signal it gives to the market is important," he said.

"While Indonesia is dealing with its economic problems, they also want to manage investors' attitude and confidence so at least they don't pull out their investment from Indonesia.

"The relationship is very important from a geopolitical and strategic perspective … Indonesia's role is very important in the region and Australia needs a stronger relationship with Indonesia."

"The relationship is very important from a geopolitical and strategic perspective … Indonesia's role is very important in the region and Australia needs a stronger relationship with Indonesia."

"The relationship is very important from a geopolitical and strategic perspective … Indonesia's role is very important in the region and Australia needs a stronger relationship with Indonesia."

"The relationship is very important from a geopolitical and strategic perspective … Indonesia's role is very important in the region and Australia needs a stronger relationship with Indonesia."

"The relationship is very important from a geopolitical and strategic perspective … Indonesia's role is very important in the region and Australia needs a stronger relationship with Indonesia."

Posted 17hhours agoFriFriday 13 NovNovember 2020 at 4:03amShare

Jakarta erupts in protests as Indonesians rally against new labour laws [abc.net.au] Why Indonesia's approach to COVID-19 'is the same as the US' [abc.net.au] Bali took a huge risk opening up for tourists. Now it's hurtling towards a coronavirus disaster [abc.net.au] Jakarta erupts in protests as Indonesians rally against new labour laws [abc.net.au] Why Indonesia's approach to COVID-19 'is the same as the US' [abc.net.au] Bali took a huge risk opening up for tourists. Now it's hurtling towards a coronavirus disaster [abc.net.au] More on:

Australia has announced it will provide a $1.5 billion loan to Indonesia as the country falls into its first recession in 22 years while it grapples with rising COVID-19 cases.

Key points:

  • Indonesia is an important regional strategic partner to Australia
  • The holiday island of Bali has been the worst hit due to a halt in international tourism
  • The loan is seen as a largely symbolic gesture

In a joint statement, Treasurer Josh Frydenberg and Indonesian Finance Minister Sri Mulyani Indrawati said the loan would be used to support Indonesia's budget and was repayable over 15 years.

"COVID-19 poses an unprecedented challenge to the Indo-Pacific and the world," the statement read.

"Indonesia's recovery and ongoing prosperity is critical to the stability and security of our region.

"The loan builds on our highly valued economic relationship and [a] strong record of bilateral cooperation."

Indonesia's gross domestic product shrank by 3.49 per cent in the third quarter of 2020, following a 5.32 per cent contraction in the previous quarter.

The holiday island of Bali has been the worst hit due to a halt in international tourism [abc.net.au] — suffering a 12.28 per cent drop in gross regional domestic product in the third quarter of 2020, following a fall of 10.98 per cent in the previous quarter.

A landmark free-trade agreement between Australia and Indonesia came into force in July this year [abc.net.au], but has not been as fruitful as expected due to domestic expenditure to mitigate the pandemic.

Australia's economic devastation caused by COVID-19 saw its largest budget deficit since World War II in the last financial year, and is projected to surpass $213 billion this financial year [abc.net.au].

Peter McCawley, an Asian economic expert currently based at the Australian National University, told the ABC the loan figure of $1.5b "will not be a strain for Australia".

'Symbolic gesture' to avoid capital flight from Indonesia

Several economists have played down the significance of the loan, saying that it will not have a major impact on Indonesia's current economic troubles.

Arianto Patunru, an Indonesian economist from the Australian National University, told the ABC the loan is largely a "symbolic sign".

"Australia's share of Indonesia's total imports is less than 3 percent, [while] Indonesia's share in Australia's total imports is also less than 3 per cent."

However, the gesture by Australia will still assist Indonesia in calming the markets and restoring investor confidence, Mr Patunru said.

"Even if the loan is not used, the signal it gives to the market is important," he said.

"While Indonesia is dealing with its economic problems, they also want to manage investors' attitude and confidence so at least they don't pull out their investment from Indonesia.

"The relationship is very important from a geopolitical and strategic perspective … Indonesia's role is very important in the region and Australia needs a stronger relationship with Indonesia."

"The relationship is very important from a geopolitical and strategic perspective … Indonesia's role is very important in the region and Australia needs a stronger relationship with Indonesia."

"The relationship is very important from a geopolitical and strategic perspective … Indonesia's role is very important in the region and Australia needs a stronger relationship with Indonesia."

"The relationship is very important from a geopolitical and strategic perspective … Indonesia's role is very important in the region and Australia needs a stronger relationship with Indonesia."

"The relationship is very important from a geopolitical and strategic perspective … Indonesia's role is very important in the region and Australia needs a stronger relationship with Indonesia."

Posted 17hhours agoFriFriday 13 NovNovember 2020 at 4:03amShare

Jakarta erupts in protests as Indonesians rally against new labour laws [abc.net.au] Why Indonesia's approach to COVID-19 'is the same as the US' [abc.net.au] Bali took a huge risk opening up for tourists. Now it's hurtling towards a coronavirus disaster [abc.net.au] Jakarta erupts in protests as Indonesians rally against new labour laws [abc.net.au] Why Indonesia's approach to COVID-19 'is the same as the US' [abc.net.au] Bali took a huge risk opening up for tourists. Now it's hurtling towards a coronavirus disaster [abc.net.au] More on:

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Original Submission