Geographic focus or national interest?

25 January 2011

by Jenny Hayward-Jones, Director of the Myer Foundation Melanesia program, Lowy Institute for International Policy 

Like Stephen Grenville in his recent post, I’ve been reflecting on the 'appropriate geographic focus' of the aid program - a key focus for the review of aid effectiveness. The reference to it in the scope suggests that the government may not be satisfied with the current geographic spread of Australian aid. The aid program has traditionally been almost wholly focused on the Asia-Pacific region, and therefore, aligned with core Australian foreign and trade policy interests in that region.  The Australian government’s increasing interest in Africa, the Middle East and also in Latin America and the Caribbean, combined with its commitment to an expanding aid program, creates expectations that aid could be spread further afield.

This map on the AusAID website already shows a remarkable spread of Australian aid. Comparisons with other like-minded donors such as the UK  and US reveal that a wide geographic spread is a popular approach for large donors. Smaller donors such as New Zealand tend to have a much narrower geographic focus. 

Data collected by the OECD’s Development Assistance Committee (DAC), available here, shows that only half of Australia’s top ten recipients of aid in 2008/09 (most recent OECD data available for the sake of comparison) coincided with the top ten recipients of development assistance from all OECD DAC members combined. 

Top ten recipients of gross ODA from all OECD DAC members 2008/09

Top ten recipients of Australian ODA  2008/09 

There are only two southern hemisphere members (Australia and New Zealand) and only four Asia-Pacific members (Australia, Japan, New Zealand and the Republic of Korea) of the DAC.  Unsurprisingly, Asia-Pacific countries dominate in the top ten recipient lists of Australia, Japan and New Zealand, with African and the Middle Eastern states dominant in the top ten lists of most other OECD members.

The top ten recipients of Australian aid in the current financial year are Indonesia, Papua New Guinea, Solomon Islands, Afghanistan, Vietnam, Philippines, Timor-Leste, Bangladesh, Pakistan and Vanuatu.  Using budget estimates for 2010-11, funds allocated to these top ten recipients on a bilateral program basis comprise approximately 41 per cent of Australia’s total aid budget.

Funds allocated to Asia-Pacific (and I include West and South Asia in my definition here) recipients comprise 58 per cent of the total aid budget.  Just 7 per cent of the total in 2010/2011 is marked out for other regions – Africa, Middle East and South and Central America. The balance of Australian aid is delivered through multilateral organisations.

The heavy geographic focus on the wider Asia-Pacific region in Australia’s aid program marks Australia apart from most of its fellow donors.  I agree with Stephen that this focus is important and should endure. Australia is the largest donor in the Pacific and amongst the most significant of donors in a number of Asian countries.  The Asia-Pacific is the region we best understand – or ought to understand. 

A decision to alter dramatically the current geographic spread of the aid program will require that more resources are devoted to understanding other regions.  It could result in less effort being put into policy development and innovation in development assistance to the Asia-Pacific.  A sense of complacency about our own region risks a reduction in Australian influence and a willingness amongst our key partners to look elsewhere.

Geographic spread in itself is not causally linked with better aid effectiveness. Giving aid to a broader range of countries does not automatically improve the overall quality of the aid program. Similarly, giving more aid to the same number of countries does not directly lead to that aid being more effective or delivered more efficiently. 

Reviewing the geographic focus of Australian aid in terms of effectiveness and efficiency requires questioning of what global development needs Australia is seeking to address and prioritising where Australian funding and knowledge can be directed for both immediate and enduring impact.  Further than that, the review needs to consider Australian commitments to implement the Paris Declaration on Aid Effectiveness and the Accra Agenda for Action (a concise explanation of both available here), commitments under the Pacific Partnerships for Development, commitments under the Australia-Indonesia Partnership Country Strategy and importantly, Australian strategic interests in their thinking about geographic focus. Not an easy task.

While the scope of the review asks the panel to focus on the structure of the aid program, it does not make specific mention of an intention to review the objective of the aid program, which is 'to assist developing countries reduce poverty and achieve sustainable development, in line with Australia's national interest'.

It is difficult to see how a revoew of the geographic focus of the aid program can be constructive without a debate about the overall objective of the aid program. If the current objective is to be maintained, a clear enunciation of the Gillard government’s interpretation of the national interest would assist in understanding where and how our expanding aid program should be spent.



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