I am pleased to announce that the Government will provide up to $380
million of Export Finance and Insurance Corporation (EFIC) credit
insurance to the Australian Wheat Board (AWB) under the National Interest
provisions of the EFIC Act.
This will be provided to the AWB for the balance of its 1998 wheat
sales to Indonesia. The availability of the insurance cover will depend
on the finalisation of a sovereign guarantee from the Indonesian Government.
The decision demonstrates the Government's commitment to help
Australian farmers and exporters maintain traditional markets and
protect Australian jobs, in the face of the current Asian economic
turmoil.
Australia has been the largest supplier of wheat to Indonesia in the
past few years and the provision of this insurance cover is crucial
to maintaining Australia's market share, particularly in light
of the potential for increased credit based competition from United
States and Canadian suppliers.
In a climate where food prices in Indonesia have doubled in some cases
or even tripled, this decision also stands as a clear statement of
the Government's support for the Indonesian people.
Maintaining adequate supplies of food and other essential commodities
is vital to preserving stability in Indonesia and restoring health
to the Indonesian economy. EFIC credit insurance provides the certainty
necessary for Australia-Indonesia trade to continue.
9 March 1998