Australia has announced the creation of a 2 billion Australian dollar ($1.3 billion) fund aimed at enhancing trade and investment collaboration with Southeast Asia, as conveyed by Prime Minister Anthony Albanese on Tuesday.
Named the Southeast Asia Investment Financing Facility, the fund will primarily target infrastructure and projects promoting the transition to a green economy. Albanese emphasized the goal of facilitating access for Southeast Asian companies to the Australian market, portraying Australia as not only an exporter of knowledge but also a provider of expertise.
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During the special summit in Melbourne, hosting leaders from the Association of Southeast Asian Nations (ASEAN), Australia wanted to “do more” to “support regional growth and to realize mutual benefits,” said Albanese.
“Acting on climate change is an environmental necessity for our region. It is also a transformative economic opportunity,” he said at the summit’s CEO lunch
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A primary focus of the summit revolves around amplifying Australia’s trade engagement with the rapidly expanding neighboring region, featuring the presence of influential business figures. Prime Minister Albanese highlighted that Australia’s bilateral trade with ASEAN surpassed AU$178 billion in 2022, exceeding trade figures with Japan or the U.S. Additionally, two-way investments between Australia and the bloc amounted to AU$307 billion.
In addition to the recently established fund, Australia plans to allocate an additional $140 million Australian dollars to its Partnerships for Infrastructure Program. This initiative aids Southeast Asian governments in project implementation by providing expertise in areas such as planning and procurement.
“This demonstrates unequivocally that Australia is open for business, tourism, and trade,” Albanese said.
The investment financing facility, to be overseen by Export Finance Australia, is a result of recommendations outlined in “Invested: Australia’s Southeast Asia Economic Strategy to 2040.” The report, authored by Nicholas Moore, Australia’s special envoy for Southeast Asia, highlights that Australia’s foreign direct investment in the region has been relatively limited, attributing this to perceived risks acting as a deterrent for investors.
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According to Moore, the facility is designed to offer financial support through loans, guarantees, equity, and insurance for projects aimed at bolstering Australian trade and investment in Southeast Asia. The establishment of this facility is expected to address apprehensions related to conducting business in the region, as outlined by Moore.
“It would make available a valuable source of funding for these investments, and also send an important signal of confidence that the Australian Government was willing to invest, helping crowd in private investors.”