Coronavirus: Humanitarian crisis developing on Australia’s doorstep

An estimated 20 per cent of Indonesia’s population of 268 million is at risk of falling into extreme poverty due to the pandemic.

Australia faces a human crisis on its doorstep, with an estimated 20 per cent of Indonesia’s population of 268 million at risk of falling into extreme poverty and Pacific Island nations suffering a massive economic contraction.

Indonesia’s economy is forecast to shrink by 1.2 per cent as a result of the COVID-19 crisis, while Pacific Island economies are set to shrink by 4 per cent on average, and up to 9 per cent in some countries, the World Bank has found.

The dire economic impacts of the COVID crisis in Australia’s immediate region will put pressure on Scott Morrison’s Pacific Step-up, and our already scaled-backed aid to Indonesia.

World Bank economist Eka Vashakmadze, who completed a major report on the global economic impact of the coronavirus, said Australia’s immediate region was facing a “huge contraction”.

Ms Vashakmadze said Indonesia, where 9 per cent of people were already in extreme poverty, had another 20 per cent of its population who could see their incomes disappear.

Pacific Island countries, where poverty was even higher, were suffering more from the impacts of travel restrictions than the coronavirus itself, she said.

Australian Institute of International Affairs president Allan Gyngell said it was clear the coronavirus crisis would have a deeper impact on the region than the Asian financial crisis of the late 1990s, while Australia would be less able to offer assistance to its neighbours.

“We are not in nearly as strong a place now to help out as we did then,” Professor Gyngell said.

He said Australia itself would be “poorer, weaker and more isolated” as a result of the crisis.

Australian National University professor Stephen Howes said the federal government had made it clear there would be no increase in foreign aid to support Australia’s neighbours. But he said Australia could help the Pacific by including it in the proposed trans-Tasman travel bubble, and by supporting more Pacific seasonal workers to come to Australia.