Together we’ll bounce back from this crisis

Pedestrians cross a busy street in the CBD of Sydney, NSW. Picture: NCA NewsWire / Steven Saphore

COVID-19 presents the greatest global challenge in our lifetime. It has caused unprecedented health and economic distress across the globe and severely affected our region. The virus knows no borders. Both our nations have felt the impact. Successive months of lockdown have weakened economic activity and eroded hard-won progress on development.

This is not merely a crisis for our economies but also one that threatens the lives and livelihood of our citizens. The health and human cost of this pandemic is our greatest shared concern. In these challenging times, the strength of the relationship between Australia and Indonesia is more important than ever.

As we reflect on the health, humanitarian and economic consequences of this pandemic, we must not lose sight of the many reasons to be optimistic about the future. We are confronting this crisis as partners and because of this we will recover together. The global response has been unprecedented. The support provided by our two governments and monetary authorities has cushioned both our economies from what would have been a far deeper contraction.

In a positive sign, recent indicators show significant improvements in economic activity. A rebound is expected for the region next year. But the extent and durability of that rebound will depend on the trajectory of the pandemic and the availability and accessibility of a vaccine to all.

We have witnessed the rapid progress of this global scientific endeavour, the search for a COVID-19 vaccine. We should all be heartened by the global commitment to co-operation and an equitable distribution of any successful vaccine.

Women ride past a mural on a wall in Jakarta, Indonesia. Picture: AFP

The Australian and Indonesian governments are committed to working with each other, bilaterally and in our shared international forums, to support access to safe and effective COVID-19 vaccines for our citizens and the region as part of a shared recovery from the pandemic.

We both desire a fast recovery and to emerge stronger from this pandemic. Our ongoing prosperity is critical to the stability and security of our region. The Indo-Pacific region’s stability and resilience are in our mutual interests.

We are committed to working together as friends and senior finance ministers. We have engaged regularly to share experiences and exchange strategies to combat the dire consequences of the pandemic. Despite differences in our economic structures, our two governments and central banks have implemented targeted cash transfers to the vulnerable and a range of business and financial sector supports, including credit restructuring, tax incentives and guarantee schemes.

We have focused on protecting our citizens from the worst of the pandemic. The poorest and most vulnerable need to be safeguarded, and Australia and Indonesia have acted accordingly, ensuring critical support for women, youth and small businesses.

Our trade, investment, education, infrastructure and tourism co-operation is a key aspect of our economic relationship and will support our return to prosperity.

It is in this spirit of partnership that Australia is providing a $1.5bn loan to Indonesia that will support Indonesia’s economic and health response to COVID-19. This loan is an investment in our relationship and is undertaken as partners. The funds will allow Indonesia to diversify its source of financing and risk as it invests in social protection and health system development. It is in recognition of Indonesia’s record of sound and responsible fiscal management as well as our partnership, friendship and mutual interest in a stronger recovery.

We are hopeful of a steady recovery and we will continue to enact vital reform as we tackle this and future challenges. In addition to the short-term measures to address the pandemic, both countries recognise the importance of economic reforms to support productivity and boost long-term growth. We are both seeking to lower inequality and improve investment in human capital through health and education.

Indonesia has just enacted the Omnibus Law on Job Creation, aimed at improving the ease of doing business and the investment climate in Indonesia. The law also stipulates the establishment of an Indonesian sovereign wealth fund aimed at creating long-term financing to support infrastructure development.

In Australia, record investment in skills and training will support the labour market of the future. Tax reform and incentives will support business investment and workforce participation in our economy.

Together, we also have an opportunity to contribute to the recovery of our region. The Indo-Pacific region’s stability, resilience and economic prosperity are of fundamental importance to both our countries. As we look towards recovery, free and open markets will ensure stronger growth and greater prosperity for all. We must not allow severe supply chain disruptions from the pandemic to deter our commitment to open regional and global trade.

Implementation of the Indonesia-Australia Comprehensive Econ­omic Partnership Agreement and associated Economic Co-operation Program will go a long way to promote trading links and foster confidence. This agreement will unlock the vast potential of the bilateral partnership and support a shared recovery.

Infrastructure is key to long-term growth. Our governments have partnered to encourage our mutual goal of greater private sector investment in infrastructure through the Indonesia Australia Infrastructure Partnership.

Our region is resilient. We have weathered challenges before and emerged stronger. We confront this crisis from a position of strength and our governments have approached the pandemic as neighbours, friends and partners.

Josh Frydenberg is the Treasurer of Australia. Sri Mulyani Indrawati is the Finance Minister of Indonesia.