Australian Government Sets Up $2 Billion Fund to Boost Trade With Southeast Asia

Australia's Prime Minister Anthony Albanese speaks in a press conference during the 50th ASEAN-Australia Special Summit in Melbourne, Australia on March 5, 2024. William West/AFP via Getty Images

A new $2 billion fund has been set up to try to improve Australian trade and investment opportunities in Southeast Asia, according to an announcement by Prime Minister Anthony Albanese.

It follows a key suggestion from the government’s special advisor Nicholas Moore, who proposed last year that the government create a “strategic investment facility” for infrastructure projects in the region, leveraging Export Finance Australia.

The Southeast Asia Investment Financing Facility fund will offer financial support, including loans, guarantees, equity, and insurance, to projects that enhance Australian trade and investment in the region, especially in clean energy and infrastructure development.

On day two of the ASEAN summit, Mr. Albanese highlighted the importance of forming a strong partnership with the region, calling it a critical investment for the future.

“This will support ASEAN’s efforts to improve infrastructure development—including early-stage project preparation—and accelerate regulatory reform in order to attract more diverse, quality infrastructure finance,” he said.

It expands on Australia’s ongoing infrastructure support in the region, notably through programs like the Partnerships for Infrastructure Program, where the government is allocating an additional $140 million.

There will also be an expansion of business visas for more people to access “five and 10-year visas,” Mr. Albanese added.

$178 Billion in Two-Way Trade

Mr. Albanese said two-way trade between ASEAN nations and Australia reached $178 billion in 2022, surpassing that of the United States or Japan, with two-way investment totalling $307 billion moving forward.

“ASEAN nations represent Australia’s second largest two-way trading partner, and they, of course, will grow to the fourth largest economy by 2040,” he said.

“Australia and Southeast Asia must together face this moment with a sense of optimism and urgency because while there is so much untapped potential, there is not unlimited time,” he cautioned.

Business leaders from various sectors, including mining and banking, were among the crowd, together with Treasurer Jim Chalmers and other ministers as Mr. Albanese introduced the business package.

Mr. Chalmers weighed in, stressing the importance of expanding investment in Southeast Asia.

“ASEAN is where the action is, and we want a bigger slice of the action for our workers and for our businesses, and what this new investment facility is all about is making sure that we can turbocharge that two-way investment,” he said.

“Because we recognise that when the region is more secure and more prosperous, our people here in Australia are more secure and more prosperous as well.”

The ASEAN-Australia Special Summit is taking place over three days in Melbourne, where leaders from the region are gathering to discuss security, clean energy, emerging leaders, and other essential topics.

The summit is also prioritising maritime operations and security, with concerns about Beijing’s influence in the region and disputes over the South China Sea casting a shadow over the discussions.

The event marks the second summit of its kind after former Liberal Ministers Malcolm Turnbull and Julie Bishop hosted the first Australia-ASEAN Special Summit.

Opposition Welcomes Consistency, Sceptical of How Funds Will Be Spent

Meanwhile, opposition foreign spokesman, Simon Birmingham, welcomed the continuity in engagement policy with ASEAN nations.

“It’s also critical in terms of how we confront the challenges in our region, increasing use of influence and power, militarily and otherwise, by China, and the need for us to work with Southeast Asian nations to keep our region open, stable, free shipping channels and the types of things we rely on for many of our existing trading relations, be it with North Asian economies and elsewhere, all of which flows through those South East Asian waterways,” he said on ABC radio.

He firmly dismissed comments from the Malaysian prime minister who suggested Australia was imposing its issues with Beijing onto them.

“Australia’s position is not one to seek to force any nation to choose between others. It is one where we want to ensure that the sovereignty of all nations within our region is respected,” he said in response.

On that note, he said the $2 billion fund details would be “closely scrutinised” to understand its financial impacts and benefits.

The Australian Council for International Development (ACFID) also expressed caution and requested more details about how the financing program would work.

“In particular, we will need to see what proportion of finance is delivered as loans to governments of developing countries, and how much is private sector funds mobilised to address climate change,” ACFID CEO Marc Purcell said.