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Dr Angela Clare
Foreign Affairs, Defence and
Several countries in Australia’s immediate region are vulnerable
to severe impacts from COVID-19 due to their high incidence of poverty and
limited basic health care. With their larger populations, Papua New Guinea
(PNG) and Indonesia are of particular concern.
Indonesia is one of the worst-affected
countries in Southeast Asia, with public health measures to contain the disease
seriously disrupting economic activity. Observers fear that
due to a large informal sector, poverty
could increase considerably unless effective support measures can be
PNG and the Pacific have low COVID-19 numbers to date, with financial
support to keep governments going, rather
than medical aid, seen as the most urgent need at present. Pacific countries have been particularly affected by a drop
in tourism, migration and commodity prices.
Indonesia, PNG and several Pacific Island countries have
been offered financing
from the development banks to support their response to the pandemic. In
countries have limited capacity to take on more debt due in part to their narrowly-based
economies. The G20 announced in April that several countries are eligible for bilateral
debt relief over the rest of 2020.
Australia’s support for the
pandemic response in the region includes assistance with testing and
laboratory diagnosis; the provision of personal protective equipment (PPE) for health
care workers; risk communication strategies; national response planning and
budgeting; and the provision of medical supplies and equipment. Australia,
along with New Zealand, is funding the World Health Organization’s (WHO)
Pacific regional coronavirus response plan (which provides access to medical
and technical advice on infection prevention and control, and clinical
management). Australia is also supporting a range of health and medical
research on infectious disease prevention, detection and control in the region.
In recognition that Australia
is an important transport hub for the region, the Australian Government is also
working to maintain an essential services and humanitarian
corridor to the Pacific and
Timor-Leste, to allow for the movement of a limited number of international
experts, essential supplies and food.
On 29 May the Australian Government announced a new policy, Partnerships
for Recovery, to guide its support for the region’s COVID-19 response. The
policy pivots Australia’s development partnerships
towards three key areas: health security, economic recovery and stability of
the region. It includes the redirection of $280 million to support critical
medical and humanitarian priorities in the Pacific, Timor-Leste and other
Southeast Asian countries. It also includes a focus on Pacific women and girls’ health, economic
security and personal safety.
Australia’s support to the region
is being financed through the existing aid budget, with no additional funding announced to date.
The Australian Council for
International Development (ACFID) has called on the Government to increase its support for the region’s COVID-19 response. Citing the Howard
Government’s $1 billion humanitarian package for Indonesia after the 2005
tsunami, ACFID has argued that the Government should allocate an additional $2
billion over four years to support the region’s recovery.
For updates on international responses to the pandemic, see
Bank’s COVID-19 Finance Sector Related Policy Responses; the International Monetary
Fund’s (IMF) policy responses; the Australian Pacific Security College’s COVID-19
Pacific Island response matrix, and Donor Tracker.
Further information on individual countries—Indonesia; Timor Leste; Papua New Guinea; Pacific Island countries—is provided
The impact of the COVID-19 pandemic across Australia’s
immediate region is still unfolding and this quick guide represents a snapshot
of the situation as at early June 2020. It is one of a number of publications
on COVID-19 by the Parliamentary Library.
While Singapore leads the COVID-19 case tally, Indonesia is
one of the worst-affected
countries in Southeast Asia and has the highest
death toll in Asia, outside of China.
As at 9 June there were 33,076 confirmed cases and 1,923
experts suggest that the national
tally could be far higher if suspected—but not yet tested—cases of the
virus are included. Cases have been recorded in all 34 provinces, with 1,291
reported in the two Papuan provinces as at 9 June. Observers believe
official numbers in the latter provinces also likely
mask the actual level of infection, noting a substantial outbreak in the
mining hub of Mimika.
Official daily tallies of the pandemic in Indonesia are issued by the Ministry of Health.
Until recently, a lack
of testing had been one of the key obstacles to Indonesia’s response to the
pandemic. The number of tests completed in Indonesia per million residents has been
the lowest rates in the world, and only reached the national target of 10,000
tests per day in late May. Shortages of materials and trained laboratory
staff are said to be the major constraints.
has expressed fears that Indonesia has neither the economy nor health
systems to cope with the pandemic. Indonesia is seen to be especially
susceptible to a high COVID-19 related death toll due to its weak
hospital system, widespread poverty, and poor overall health indicators,
including one of the world’s highest rates of tuberculosis, and smoking among
Given the relatively large size of the informal economy and
lack of any social safety net, the economic and social costs of lockdown
measures are also expected to be severe, particularly for urban workers. An
per cent of Indonesians work in the informal sector and rely on daily income.
- The Government increased funding for its National
Economic Recovery program on 18 May, which is now estimated to cost US$44
billion. The program expands on the stimulus packages issued in February and March 2020 and includes tax breaks, capital injections
for state-owned enterprises, interest subsidies for micro, small and
medium-sized business enterprises, support for the banking industry, and
financial assistance for the health sector.
- The Government has announced a raft of social
protection measures, including Rp
22.4 trillion from a total of Rp 71.19 trillion in village funds to
disburse cash transfers for 12.3 million families affected by the crisis. Other
measures include assistance
packages for laid-off and informal workers and micro and small-business
owners, financial support for electricity and housing costs, and the provision
of food packages. With the additional spending, the budget
deficit is expected to reach 6.27 per cent of GDP.
- On 31 March the Government declared a public health emergency,
but rejected a nation-wide lockdown, allowing regional administrations to
impose their own restrictions. Quarantine and lockdown measures have varied
considerably across the country and a series of policy reversals has caused
confusion. In late May 340,000
army and police personnel were deployed across four provinces and 25
cities, including Jakarta, to help enforce lockdown measures. The Government
began to lift
restrictions in the capital from early June in a bid to ease economic and
social impacts, although many are worried about the continuing
rise in new cases. The
annual Hajj pilgrimage has been cancelled.
- Civil society groups are considered to have mobilised
effectively to drive local responses.
The Indonesian Government has received support from 58
international partners to boost its COVID-19 response, including:
- around US$7
billion in loans from the Asian Development Bank (ADB), the World Bank, and
the Asian Infrastructure Investment Bank (AIIB)
million from the US to support laboratory systems, surveillance and assistance to
vulnerable populations, while the EU is providing €6
several grants and pledges of in-kind support from China,
tonnes of medical aid. Video sharing platform TikTok has provided a US$6.3
million grant to health workers, while the Jack
Ma Foundation donated two million masks, protective clothing, and test kits
to Indonesia, Malaysia, the Philippines and Thailand
technical advice on the crisis from Australia, comprising guidance
on economic assessment; fiscal stimulus packages; and non-cash vouchers for the
unemployed (including through Australia’s aid
program for economic development) and
- assistance from multilateral agencies, including the World Health Organization,
Organization for Migration, the Global Fund, and the
International Committee of the Red Cross (ICRC).
Outlook and commentary
As at 9 June Timor Leste has recorded a total of 24
confirmed COVID-19 cases and no deaths. There have been no recorded
community transmissions, and no new cases since 24 April.
Timor Leste has an oil-based economy and is experiencing severe economic
impacts due to the pandemic and collapse of oil prices, including
the reported loss of $1.8 billion from the Petroleum Fund (which makes up
around 90 per cent of the government budget). Further
falls are likely given the mid-April collapse in oil prices.
With a weak health system and a high poverty rate (around 41 per cent of the
population live below the country’s poverty line), the potential
impact of the virus could be devastating.
Unemployment is expected to increase
across a number of key sectors, in both the formal and informal economy.
Given the low infection rate to date, debates
have commenced on loosening COVID-19 related restrictions.
- A state of emergency was declared
on 28 March, putting into force restrictions on movements; surveillance;
compulsory 14-day quarantine for those possibly exposed to the virus; and
social distancing at home and work.
- A COVID-19 Fund has been created to finance the health response
to the pandemic. On 2 April the parliament
approved a US$250 million withdrawal from the Petroleum Fund, with a further withdrawal of
US$286 million requested by the Timorese Government on 3 June.
- A socio-economic
plan was approved on 20 April, including
cash support for electricity and
low-income households (each household will receive $15 in electricity credits
and $100 per month); wage subsidies; the purchase of an emergency rice stock;
support for national air transport connections; and ensuring emergency
connections to Darwin.
- The Prime Minister, Taur Matan
Ruak, has withdrawn the resignation
he submitted in February in order to help the country through the COVID-19 crisis.
On 4 May the Government’s new
coalition collapsed after a vote to extend the emergency decree was
defeated in parliament.
Outlook and commentary
- Further reductions in the Petroleum Fund will affect
future revenue, analysts claim, highlighting the country’s economic
vulnerability and heavy reliance on this commodity.
- Observers concede that the Government has taken ‘reasonable
measures’ to address the pandemic, but that these should be a first step
towards longer term strategies to invest in key sectors such as health,
agriculture, tourism, and education to reduce dependence on the oil sector and
diversify the economy. Timor Leste does not produce enough food to be
self-sufficient, for instance, undermining the value of cash subsidies.
The first case of COVID-19 was detected on 20 March, and as
June the number of cases remains at eight, with no deaths. No new cases
have been reported since
23 April. Observers caution that the gap
in PNG’s testing capacity risks undermining efforts to control the spread
of infection: as at 25 May less
than 3,000 people had been tested in a population of nearly nine million.
With COVID-19 cases rising in the bordering Indonesian
Papuan states (from 141 on 29 April to 1,291 on 9 June), PNG officials are most
concerned about the risk of community transmission across the border. The indirect
health impacts COVID-19 may pose to already weak health systems could also
be significant, including for maternal and child health. The Government has
acknowledged that the country does
not have the capacity to deal with a COVID-19 outbreak.
It is feared that COVID-19 may push the country closer to
being a failed
state, adding to already high debt levels and unstable government.
has expressed concern that the suspension of routine immunisation with the
onset of the pandemic will put children at risk of other infectious diseases
such as measles and polio, both
of which have seen recent outbreaks in PNG.
Low commodity prices exacerbated by the pandemic mean PNG is suffering a severe budget shortfall. Even before the pandemic,
PNG was negotiating
a US$2 billion bailout package with international lenders to address a looming
financial and budget crisis.
With low numbers of confirmed cases to date, there have been
to ease restrictions. Students returned
to school on 4 May after schools had been closed for five weeks, while Air
Niugini is expanding domestic services in response to a pick-up in demand.
A PNG Government minister has called
for the country to be included, with other Pacific Island nations, in the
opening of Australian and New Zealand borders under the so-called ‘Trans-Tasman
- A state
of emergency was declared on 22 March, with the Government restricting
movement and gatherings, closing international borders and imposing quarantine
policies, suspending non-essential business and services, and setting up a
24-hour call centre to respond to concerns.
- On 2 April the Government
announced a stimulus package of A$2.5 billion (5 per cent of GDP), which
includes private sector contributions, domestic bonds and loans from
international banks. The package is intended to support households, businesses,
and the health system to respond to COVID-19.
- Procuring personal protective equipment has been challenging
for the Government, with donors stepping in to help meet demand.
- The Indonesian and PNG military are coordinating
patrols of the border between the two countries.
- Australia is providing
a A$20.5 million COVID-19 support package through its existing aid program,
including for personal protective equipment, medical equipment and supplies,
and measures to increase testing capacity. It has delivered ten container
health facilities to boost infrastructure capacity. Rapid response teams have
also been deployed to PNG provinces, including the regions that border West
- The World
Bank has approved an emergency US$20 million project to provide rapid
support for PNG’s pandemic response, and US$100
million for new agriculture, health and youth projects.
- UN agencies are providing a wide
range of medical equipment and technical support, while bilateral donors,
including the US (pledging
US$3.2 million), the EU
and China, have provided cash grants and medical supplies.
NGOs are supporting PNG’s response to the pandemic—including Care,
World Vision and the
ICRC—by providing personal protective equipment and training to health
facilities in targeted areas such as the Highlands, Bougainville and Western
Outlook and commentary
Most Pacific Island countries took early steps to close
borders and impose quarantine measures, and to date there have been few direct
health impacts from the pandemic. With the total number of cases across the
to be 297 (excluding PNG) as at 9 June, the health
threat is looking less severe than feared. Guam has the highest number of
cases at 171, followed by French Polynesia with 60. There are 28 in the
Commonwealth of the Northern Mariana States, 20 cases in New Caledonia, and 18
in Fiji (with no new cases since 18 April). Other Pacific nations remain free
of COVID-19. The region’s geographic
isolation is thought to have provided some initial protection against the
onset of COVID-19.
Given the low case numbers, some countries have commenced easing
restrictions on social movement and gatherings, while commentators argue
support to keep governments going, rather than medical aid, is the most
pressing need at present. But with severely under-resourced
health systems across the region, there are clear risks to lifting
restrictions too soon.
Pacific economies are typically narrowly-based and highly
vulnerable to external shocks. They are often heavily
dependent on tourism, commodities, trade and migration, all of which have
been severely affected by containment measures. As with PNG, the Solomon
Islands has been hit hard by falling commodity
prices, while Fiji, Vanuatu, Samoa, Palau and the Cook Islands have
affected by the loss of tourism.
Several Pacific Island countries have been extended grants
or concessional financing from development banks (the ADB or the World Bank) to
help finance their response to the pandemic. Most have limited
capacity to absorb debt and are unable to raise money on the
international capital markets, hampering their capacity to implement
stimulus measures. It
has been feared economic hits may cause social unrest in some
has announced that Pacific seasonal workers could continue to work in the
agriculture sector for up to 12 months. Calls have been made to
increase the intake of seasonal workers from the region to meet the high
demand for fruit and vegetable harvesting, under appropriate health and safety
Remittances from seasonal work form a large proportion of
some Pacific Island countries’ income, making up around 18
per cent of GDP in Samoa and 40 per cent in Tonga. Work in Australia accounts
for 26 per cent of remittances to the Pacific, with workers each sending home
around $2,200 over a six-month period. The World Bank predicts
global remittances to decline by about 20 per cent in 2020 due to the
pandemic, the sharpest decline in recent history.
The region’s economic vulnerability has prompted calls to bring Pacific nations inside
Regular updates on the impact of COVID-19 in the Pacific are
currently issued by The
Guardian, the ANU’s DevpolicyBlog, and the Australian Pacific Security College’s COVID-19
Pacific Island response matrix.
engagement in the region has continued to increase over recent weeks. Coming
on the back of assistance for Tropical Cyclone Harold, managing this engagement
is becoming increasingly complex for some countries.
- Several Pacific Island countries have been approved
concessional loans or grants from the Asian Development Bank (ADB) or the
World Bank to support their response to the pandemic. This support is in
addition to temporary
debt relief announced by the G20 in April.
- This follows a
series of grants to Fiji, Vanuatu, Tonga and the Solomon Islands to assist
recovery after Cyclone Harold. NGOs
have reported that COVID-19 restrictions are slowing aid and equipment
deployment in Vanuatu following the cyclone.
- Australia provides the bulk of its support to the region through
grants and other initiatives under its Pacific aid
program (totalling $1.4 billion in 2019–20). Australia’s support
for the region’s COVID-19 response includes
boosting testing and diagnostic capacity; the provision of medical supplies and
equipment; national response planning; implementation and budgeting; and
helping to keep open an essential
services and humanitarian corridor. Australia, along with New Zealand, is
funding the WHO Pacific regional coronavirus response plan (providing access to
technical advice on infection prevention and control, and clinical management).
Zealand has provided medical equipment and other COVID-19 related supplies
and increased access to testing.
- The US has committed
US$27.5 million for the COVID-19 response in its three Freely Associating
States (Palau, Marshall Islands and the Federated States of Micronesia), and an
additional US$3 million for the regional response.
- The EU has pledged
€119 million towards the pandemic response in the Pacific.
- China has set
up a US$1.9 million ‘Anti-COVID-19 Cooperation Fund’ with Pacific Island
countries. The Jack Ma Foundation has been providing
COVID-19 related equipment, while Chinese companies have also distributed
medical equipment and other aid.
- Non-government organisations, including Plan
the Children and the Australian
Red Cross, are also supporting the region’s
Outlook and commentary
have been made for Australia and New Zealand to bail out Pacific Island
economies, for closer integration of the region’s smaller and larger economies,
and for increased investment in the region’s health infrastructure, to manage
future risks. For instance, it has been suggested that thought be given to better ensuring the supply of critical medical supplies across the region in the face of
increasing global demand, including through mechanisms such as pooled
- The suspension of routine immunisation services as a
result of the pandemic is putting children at risk, UNICEF has claimed. It argues that basic
health systems need to be strengthened if outbreaks of other preventable
infectious diseases—such as the 2019–20
Samoa measles outbreak—are to be avoided.
- Commentators have also called for the Australian Government to upgrade
its Pacific step-up, which may involve:
a significant shift in our development assistance programs so
that they focus on restoring the small business and agricultural sectors;
industries that have been ravaged by the shutting of international borders,
including tourism and hospitality; and areas affected by the closure of
schools, colleges and universities.
Specific country measures
- Fiji: the Government has announced
a stimulus package of A$400 million, with more than half to be
directed towards businesses and employees. The country has kept in place
restriction measures despite no new cases for several weeks, with recreational
sport banned and a daily curfew from 10 pm to 5 am.
- Vanuatu: the Government has announced
a stimulus package of US$32 million to boost infrastructure, provide
jobs, and support food security. It is also set
to benefit from QBE’s A$2.6 million COVID-19 response. The World Bank
US$10 million in emergency funding to Vanuatu to support the country’s
response to the combined impacts of the global COVID-19 pandemic and Cyclone
- The Solomon Islands: the Government has announced
an economic stimulus package valued at US$37.5 million to provide
equity injections and fund tax breaks for key sectors, including tourism; copra
and cocoa; grants and concessional loans for private companies; and the ramping-up
of donor-funded infrastructure projects employing local workers. Health workers
have threatened to strike over the lack of PPE. The ADB has announced
a US$3 million grant and a US$3 million concessional loan to help
finance the Government’s response to the pandemic.
- Samoa: the Government has announced a US$24 million
supplementary budget with a focus on relief for households. The IMF has
financing of US$22.03 million, while the ADB has approved a US$2.9 million
grant, and the World Bank is providing a US$5.1 million
grant to support the country’s response. In December 2019 the World Bank committed
US$9.3 million to strengthen Samoa’s health systems over the next six
- Tonga: the Government has announced a stimulus
package of US$25.5 million, while the ADB has approved a US$6 million
grant to help finance the response to the pandemic.
Kiribati: the Government has imposed travel restrictions and
other protection measures, and announced that it lacks
the resources to deal with COVID-19 if it enters the country.
- Nauru: Australia has provided
the country with $3 million for its COVID-19 response.
Tuvalu: the Government announced an economic
and financial relief package on 6 May. The package includes measures to
respond to health risks, provide grants to businesses, and increase welfare.
- Palau has been granted a US$15
million loan from the ADB’s Disaster Resilience Program to help finance its
response to the pandemic.
- Marshall Islands: the ADB has announced a US$6
million grant to help finance the pandemic response. The World Bank has
a US$2.5 million emergency project to support the country’s fight against COVID-19.
- Federated States of Micronesia: the ADB has announced
a US$6 million grant from its Pacific Disaster Resilience Program (Phase 2)
to help finance the response.
Office of National Intelligence Open Source Centre, Indonesian daily
compilation report, 23 April 2020.
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