Is China addressing concerns about the Asian Infrastructure Investment Bank? What’s the lowdown on aid from India? And what does the future hold for the Australian aid program?
Development actors are hoping to get the answers to these questions and more at the Australasian Aid Conference, kicking off Feb. 12 at Australia’s capital and political heartland Canberra. The two-day conference, organized by Australian National University’s Development Policy Center and The Asia Foundation, draws research and big names in development from across the region.
Last year’s inaugural gathering saw Australia’s foreign minister Julie Bishop foreshadow the conservative coalition government’s new aid policy and subsequent devastating cuts. So it’s no surprise this year’s event is hotly anticipated.
Here are three key issues, which will be tackled at the forum, that are generating the most buzz within the development community.
‘On the fence’ with AIIB
With a proposed starting capital of $50 billion, China’s Asian Infrastructure Investment Bank has potential to significantly change the development landscape. But there are concerns a China-dominated multilateral lender could fail to meet international environmental, social and governance standards.
Australia is among several influential countries, like South Korea and Japan, which have not signed up to the bank. But it is not opposed to the idea. Prime Minister Tony Abbott said Australia would join if China incorporated governance provisions mirroring those at the World Bank.
Development Policy Centre Director Stephen Howes told Devex Australia’s political leaders were “sitting on the fence” when it came to forming an opinion on the AIIB. This year’s conference could see them make up their mind, with a senior adviser to the Chinese government on the AIIB, Zhou Qiangwu, delivering a key address.
“Is this going to be a well-governed institution?” Howes asked. “I don’t think we’ve really heard the Chinese side of that story — and it’s a big story.”
The former AusAID and World Bank economist said next week’s talk should “add clarity” to public and private discussions, and enable politicians and nongovernmental organizations alike attending to “make a considered decision.”
Australia’s aid future
Australia’s coalition government has slashed the foreign aid budget three times since coming to power in 2013, wits cuts totaling 11 billion Australian dollars ($8.6 billion). The last AU$3.7 billion reduction was announced as recently as December — it’s expected to help the country slide from being the 13th most generous donor to the 19th, out of the world’s 28 wealthiest countries.
The local development community continues to seek clarity from the government.
“There’s still a lot of uncertainty in the industry as to what programs will be cut,” Andrew Rowe, founder and managing director of Sustineo, shared with Devex, “particularly with the additional cuts they’ve flagged.”
And Sustineo, a development consultancy firm based in Canberra, has cause for concern. According to Rowe, a fellow consultancy business had been poised to sign a major contract to deliver a program that was now in limbo.
More insight into priorities in Canberra will come next week, when shadow foreign minister Tanya Plibersek details Labor’s position on aid for the first time. People are hanging out to find out if Labor will oppose the new cuts and “what they think is the future of aid, because certainly in Australia it’s under a big cloud as the moment,” Howes shared.
India and China’s development policy
Another hot topic on the agenda is aid from India and China, both key emerging donors in the Asian region.
Howes said India’s growing aid program, while “nowhere near as big as China’s,” was nonetheless a particularly interesting phenomenon. Despite being the “fastest-growing major economy” in the world, India is still a low-middle-income country with large pockets of poverty.
“It’s a very poor country, much poorer than China so why is a poor country giving aid to other countries?” he asked. India’s Prime Minister Narendra Modi hiked aid spending to 94.8 billion Indian rupees ($1.6 billion) in his first budget last year — a 34 percent increase on the previous year — and the country has become a major player in development in Afghanistan.
China on the other hand has been upping its aid spending since emerging as a significant donor in the late 1990s, with a focus on economic infrastructure and industry. Government figures put the annual global budget for 2013 at 40 billion yuan ($6.5 billion). Still, it’s criticized for not following international development norms and policies or tackling issues like human rights, democracy and good governance.
Will development actors gain clarity on these key issues at the forum? What development issues do you think are missing from the agenda? Have your say by leaving a comment below.
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