Under the International Monetary Agreements Act 1947, the Treasurer is required to release and table a statement which describes the nature and terms of an agreement entered into by Australia to provide financial assistance, and details why such an agreement is in Australia's national interests.
This National Interest Statement relates to the Loan Agreement between the Commonwealth of Australia and the Republic of Indonesia for a loan of A$1.5 billion, signed on 12 November 2020. This agreement is part of a multilateral action to support Indonesia led by the Asian Development Bank (ADB) and including the Asian Infrastructure Investment Bank (AIIB), the Japan International Cooperation Agency (JICA) and the German state-owned development bank (KfW).
The funds will be used to support Indonesia’s COVID-19 response, including social protection initiatives and health system development. Indonesia’s response has significantly expanded social protections for the most vulnerable and strengthened the health system.
Australia has a history of assisting the Government of Indonesia through periods of economic difficulty. The Australian Government previously provided standby loans to Indonesia in both 2008 (US$1 billion) and again between 2013 and 2015 (A$1 billion). While neither loan was taken up, their existence provided confidence to markets, which assisted Indonesia to access international capital .
Providing this loan to Indonesia enhances Australia’s diplomatic and economic interests, through strengthening the important relationship between the two countries, and by supporting the economic stability of Indonesia and the region.
Further information can be found in the National Interest Statement. Further information on Australia’s partnership with Indonesia, including our response to COVID-19, can be found on the Department of Foreign Affairs and Trade website.