Doing More with Less? Allies Face Aid Challenges in Asia

By Jason Schulman

AusAID-funded relief supplies are prepared, loaded and delivered to Fiji following Cyclone Evan. Source: AusAid Photolibrary's flickr photostream, used under a creative commons license.

The Australian government announced drastic changes to its foreign aid budget in December 2012, saying it will reallocate $375 million to fund onshore processing of asylum seekers in the country. The government on February 8 clarified exactly how it will reallocate the funds. The planned changes include drastic cuts to programs in Indonesia, Timor-Leste, Cambodia, Myanmar, and Laos, and programs for humanitarian assistance and emergency response in the Pacific.

Some aid programs have already suffered delays due to the cuts and more may follow. The cuts are particularly troubling to those who were pleased by the 2012 budget’s forecast that foreign aid would be increased to over $5.2 billion this year. Mark Purcell of the Australian Council for International Development (ACFID) recently noted that Australia’s reputation globally is at stake as people around the world wait to see if Prime Minister Julia Gillard will stick to the aid goals she laid out during her country’s successful UN Security Council bid last year.

Beyond the immediate disruptions, the restructuring of the aid budget is stirring contentious debate in Australia. According to the government, funds put toward asylum seekers within Australia count as foreign aid, but critics disagree, calling it a diversion from true aid. In addition, policy experts are debating the larger purpose and effectiveness of foreign aid in light of budget cuts.

Australia engages heavily with its neighbors through robust foreign aid, both in response to natural disasters and through long term projects. Australia provided assistance to the Solomon Islands following a February 6 earthquake and tsunami, and the Australian Agency for International Development (AusAID) gave funds to Samoa following a destructive cyclone in December. AusAID’s long term projects include expanding literacy in the Philippines, investing in education in Fiji, clearing unexploded ordnance in Laos partnering with New Zealand on regional development; implementing more direct aid to Myanmar; and advancing women’s empowerment in the Pacific.

The impact of these budget shifts will continue to play out over the coming year. As Australians prepare to go to the polls on September 14, the budget—and the aid budget in particular—will be a political target. It is crucial that Australia does not pass up the opportunity to utilize every means it has, including foreign development, to create a more stable and prosperous Pacific.

Like Australia, the United States is facing a leaner development budget.  Ensuring a robust one-two punch of foreign development assistance from Washington and Canberra would be a boon to the region and to the United States’ identity as a Pacific nation. Though the monetary component of aid is important, maintaining a strong presence in regional forums and finding ways to work with local entities and public-private partnerships are useful ways to maintain support when funds are short. If Australia and the United States work jointly to create a framework for multi-party participation in regional development, it could mitigate necessary hits to bilateral aid while still supporting security and prosperity in the Asia Pacific.

Mr. Jason Schulman is a researcher with the Pacific Partners Initiative at CSIS.


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