Australia helps Indonesia

Australia will help to provide emergency funds to Indonesia, to protect it against the global economic crisis.

The Prime Minister, Julia Gillard, made the announcement in Darwin today.

Japan, the Asian Development Bank and the World Bank will also be contributing.

Ms Gillard said: “This stand-by loan facility is designed to be a financing option of last resort, and can only be accessed if Indonesia’s circumstances deteriorate markedly.”

She said the loan would be similar to the loan facilities made available during the Asian financial crisis in 1997-1998, and during the global financial crisis, neither of which were drawn upon.

“Australia’s contribution of a $1 billion standby loan facility forms part of a package of international contingent loans to Indonesia of up to US$5.5 billion,” Ms Gillard said.

“In the unlikely event that the facility is drawn upon, it would be repaid with interest and would not impact on the Commonwealth’s budget bottom line,” she added.

Ms Gillard said continued global uncertainty means that even countries with responsible macroeconomic and banking policies such as Indonesia are being impacted.