Australia must not pull back from Asia, says Costello

Australia must not pull back from Asia, says Costello

Reuters, Canberra

Australia should not withdraw from Indonesia or Asia as a whole in the wake of the bombings in Bali, Treasurer Peter Costello said on Wednesday, arguing that regional stability was crucial in the battle against terrorism.

"The withdrawal of tourism, and the withdrawal of investment as a result, will harm Indonesia. It will damage the Indonesian economy," Costello said in notes for a speech to the annual dinner of the Asia Society AustralAsia Center in Sydney.

More than 180 people were killed and over 300 injured by blasts that rocked a nightclub on the Indonesian resort island of Bali on Saturday and tourists have fled the country.

The exodus is expected to sideswipe the Indonesian economy and President Megawati Soekarnoputri is under pressure to clamp down on suspected al Qaeda-linked militants operating in the world's largest Muslim nation.

But Costello said Australia should help Indonesia battle terrorism, not withdraw from contact.

"What we must be careful about is that it does not lead to a withdrawal of Australian engagement with Indonesia. We must not withdraw. We must increase our engagement. In the first place we must increase our engagement on law enforcement," he said.

Noting that 58 percent of Australian exports go to east Asia and 47 percent of imports come from the region, Costello said it was vital that Australia remain engaged -- particularly in the face of other regional trading blocs in Europe or the Americas.

"It is...very much in Australia's interests to use what influence we have at both the global and regional level to strengthen the multilateral trading and investment system and resist protectionism and insularity in all its forms," he said.

Costello said that while the economic impact of terrorist attacks fall most heavily on the vulnerable members of society, Australia had deep economic links with Asia.

"Moments of crisis highlight our common destiny. In 1997 it was a financial crisis. Today it is a human tragedy. At these points of crisis we must...heighten our engagement and our cooperation. We must work together," Costello said.