Australia will contribute about $650 million to a special fund to help Indonesia weather the global economic crisis. Australian Prime Minister Kevin Rudd made the announcement on a brief trip to the Indonesian island of Bali. He was there to co-host regional talks on democracy with Indonesian President Susilo Bambang Yudhoyono.
The pair held talks on the sidelines of the inaugural meeting of the Bali Democracy Forum. Leaders and officials from about around 30 countries attended the forum, including East Timorese Prime Minister Xanana Gusmao.
The meeting is intended to promote democracy in the Asia-Pacific region.
The global financial crisis has been a major concern at the summit.
Indonesia has sought help from Japan, the European Union, the Asia Development Bank and the World Bank as well as Australia, to be sure its economy keeps growing despite the global slowdown.
Prime Minister Rudd says his government is happy to help.
"Australia will of course act as a friend and good neighbor of Indonesia as we have done in the past, a decade ago, providing a financial facility of around $1 billion in a different financial crisis," Rudd said.
Indonesia's economy nearly ground to a halt in the late 1990s, during the Asian economic crisis. The government relied on help from the donors and the World Bank to recover.
The two leaders also discussed the issue of people smuggling. Several vessels carrying suspected asylum seekers have traveled from Indonesia to Australia in recent months.
Mr. Rudd said at a news conference in Bali that an alleged people-smuggler will be extradited from Indonesia to Australia to face court. A Pakistani national, Haji Sakih, was arrested last week in Surabaya in East Java in a joint operation with Indonesian and Australian police.
Authorities allege the man has been responsible for at least 12 people-smuggling operations to Australia.
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