Not quite as flashy as the Pacific deal with Nauru this week or the expected support for a PNG rugby team, but Australia made some interesting moves last week in Southeast Asia. Both fulfil commitments made a year ago under Australia’s International Development Policy and Southeast Asia Economic Strategy.
A $75 million stake in the Singapore government’s Financing Asia’s Transition Partnership marks the first big spend for Australia’s $2 billion Southeast Asia Investment Financing Facility. This blended finance initiative will on-lend concessionally to the rest of the region to support decarbonisation and clean energy projects. That’s pretty sensible – the Asian Development Bank and the World Bank are already on board.
It’s not strictly a Southeast Asia investment though. Despite being managed by Singapore, the money can be spent anywhere in Asia. It would have been encouraging to see the first Australian investment under this facility go to a major Southeast Asian emerging economy, but Singapore is unquestionably an attractive investment partner and this is a good first step.
Also out last week came the new Australian Development Partnership Plan for Southeast Asia (regional). We’re waiting for a backlog of these “DPPs” to be cleared, and it does seem slightly strange sequencing that the regional version has been released before most of the bilateral plans (only Indonesia and the Philippines have been published so far in Southeast Asia).
More than 99 per cent of Southeast Asia’s population resides in developing countries.
The document pays expected homage to ASEAN centrality and regional architecture, and provides some useful clarity on the changing direction of a few flagship programs. I’ll be watching to see how Timor-Leste is managed across these DPPs. The Pacific regional version is not out yet, nor is Timor-Leste’s bilateral, but Timor-Leste occupies a slightly uncomfortable bridge position as part of the landmark Pacific Australia Labour Mobility Scheme and the Australian Infrastructure Financing Facility for the Pacific, while waiting to join ASEAN and being included in the Southeast Asia DPP and programs.
What is curious to me is that the list at the very end of the document, which purports to include “ODA and significant non-ODA development investment and activities” targeted at “greater regional action on climate change and energy transition”, does not include the Southeast Asia Investment Financing Facility. The list does include the investment deal teams, designed to push Australian investment into Southeast Asia.
What I’m really mulling is how and why DFAT is trying to position the Southeast Asia Investment Financing Facility as not a development program, despite Southeast Asia being a majority developing region. More than 99 per cent of Southeast Asia’s population resides in developing countries. Pat Conroy (International Development Minister) is a notable absence from the Financing Asia’s Transition Partnership investment press release, led by Penny Wong (Foreign Minister) and Don Farrell (Trade Minister). But this is clearly not a purely commercial investment – it’s to a government facility that will provide concessional financing, and the other investors include the major multilateral development banks (and Singapore says the British, Dutch and German development finance institutions are in discussions). That feels pretty development-adjacent to me.
