Australia’s Aid Cuts Neglect Long-term Vision on Asia

By Michael Sheldrick

A woman carries heavy buckets of water back from a standpipe, Ban Chaling, Dakcheung, near Sekong, Laos. Source: DFAT photo library flickr's photostream, used under a creative commons license.

A woman carries heavy buckets of water back from a standpipe, Ban Chaling, Dakcheung, near Sekong, Laos. Source: DFAT photo library flickr’s photostream, used under a creative commons license.

Prime Minister Tony Abbott’s recent cuts to Australia’s foreign aid budget have left it at the lowest level it has ever been since its origination over 40 years ago. In fact, once these cuts are fully implemented, Australia will be giving a paltry 22 cents in foreign aid for every $100 dollars of its gross national income – reducing the aid budget by one third over the coming years.

Since coming to office, Abbott and Foreign Minister Julie Bishop have stressed the extent to which Australian foreign policy, including foreign aid, will be far more focused on the Indo-Pacific region. As Abbott put it during the 2013 federal election campaign, his approach would be “more Jakarta, less Geneva.”

Yet given their unprecedented scale, it is difficult to see how these most recent aid cuts will not have consequences for the myriad of impoverished human beings struggling to survive in neighboring Southeast Asian nations. The potential impact of these cuts on health programs is particularly striking. Take the example of Laos, a country known to many Australians as a great destination for an affordable holiday.

Late last year I joined a delegation of seven Australian members of Parliament on a trip to Laos to see the impact firsthand of Australian aid dollars. Perhaps unknown to most visiting Australian tourists is the fact that Australia’s aid program is the second largest in Laos after Japan’s. Additionally, Australian development assistance supports a number of organizations that play a critical role in addressing Laos’s relatively high child mortality rates (shockingly, almost 1 in 10 children in Laos will not see their fifth birthdays, due primarily to preventable and treatable causes).

One of the organizations Australia currently supports is Gavi, the Vaccine Alliance, an innovative public-private partnership with the goal of creating equal access to new and underused vaccines for children living in the world’s poorest countries. Australia’s work with Gavi as a funding mechanism to support immunization and stronger health systems plays a key role in negotiating lower vaccine prices for a number of Southeast Asian nations, including Cambodia, Indonesia, Laos, Myanmar, and Vietnam.

The benefits of this support for Laos – a country where roughly one in five children continue to go without access to basic vaccines – were clear to all on our trip. For example, through Gavi support, Laos has become the first country in the region to introduce the vaccine for human papillomavirus (HPV) – a virus known for causing virtually all cases of cervical cancer. The potential payoffs of this introduction were driven home following a visit to Vientiane’s Sethathirath Hospital. We were told that the cost of treating cervical cancer for women in Laos is estimated at over $20,000 per person — an extravagant amount that many are unfortunately unable to afford and which contrasts greatly with the cost of delivering the relatively inexpensive HPV vaccine.

Nonetheless, much remains to be done. Gradually taking onboard a greater share of the costs associated with its immunization program, the Lao Health Ministry stressed to us during our visit that at least for the next few years it will continue to require assistance from countries like Australia in order to reach all children with basic vaccines. Without such support, one wonders whether the progress we saw will stall.

Despite declarations by Foreign Minister Bishop that Gavi epitomizes the spirit of her “new aid paradigm,” it is unlikely to receive any significant increase in contributions in coming years. Other programs too, focused on water and sanitation, education, maternal health, and more, are likely to face even tougher times. Indeed it is hard to see how most programs could remain relatively untouched, given that a third of Australia’s entire annual aid budget will be gutted in the coming years. No doubt Australian diplomats across the region will be in defense mode over the coming months, trying hard to preserve the bulk of programs in their respective countries.

Policymakers sitting in Canberra would be naive to think that these cuts do not have any implications for Australia’s own long-term economic prosperity and security. A healthy population is, after all, a population that is performing better in school, producing more at work, and saving and investing more for the future – perhaps one day fueling consumption of goods and services from countries like Australia. Other countries in the region, like Thailand and Malaysia, have already gone from being aid recipients to some of Australia’s top trading partners. Cuts to investments in health and education threaten to undermine some of the take-off conditions for such economic development, particularly in communities already excluded from sharing the fruits of their countries’ overall growth.

Undoubtedly Julie Bishop and her department have an arduous job ahead of them to determine what stays and what goes as a result of the broader aid cuts. The harsh reality is that some poor communities, somewhere, will feel the effects of their decision.

Mr. Michael Sheldrick is Senior Manager in Global Policy and Advocacy at the Global Poverty Project.

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