Australia's top aid recipients: A (re)pivot to the Pacific

In June of last year, Australian Foreign Minister Julie Bishop pledged that Canberra’s massively downsized foreign aid program would now become more tightly focused on the Indo-Pacific — a key commitment of the Abbott government’s aid policy framework called the “new aid paradigm.” A vast region of strategic importance to Australia, the Indo-Pacific is generally understood to include South Asia, East Asia and the Pacific. The Abbott government’s latest budget, unveiled Tuesday, directs 93 percent of Australian official development assistance for bilateral and regional programs in 2015-16 to the Indo-Pacific, just above Bishop’s 90 percent target. The Australian fiscal year begins July 1. It’s worth noting that the Indo-Pacific has long-garnered the vast majority of Australian aid spending, albeit slightly more so now that the Abbott government has reversed course on the previous Labor government’s donor ambitions in Africa and Latin America. Deeper analysis of Australia’s 2015-16 foreign aid budget, the first since the Abbott government unveiled its aid policy framework, reveals a subtle but far more decisive shift in Australian aid dollars to just one part of the Indo-Pacific, the Pacific region. In 2015-16, the Pacific will claim 45 percent of Australian ODA for bilateral and regional programs, the region’s highest share over the past decade. East Asia follows with 36 percent, its lowest share of Australian ODA since 2011-12. The Pacific’s share of Australian aid has averaged only 35 percent since 2005. In the Abbott government’s second belt-tightening budget in a row, 11 of the Australian Department of Foreign Affairs and Trade’s 12 bilateral aid programs in the Pacific will actually be funded at current levels in 2015-16. That roster includes newly democratic Fiji, a major recipient of Australian aid, which has only recently resumed government-to-government engagement in its development cooperation with Canberra. Papua New Guinea, which accounts for over half of Australian aid to the Pacific, is the only DFAT bilateral aid program in the region to see a cut. By comparison, seven of eight DFAT bilateral aid programs in East Asia, as well as six of seven programs in South and West Asia are on the chopping block. The two DFAT bilateral aid programs spared from cuts in these regions are Cambodia and earthquake-hit Nepal. Based on the Abbott government’s latest budget, below, Devex ranks and takes a closer look at Australia’s top 10 ODA recipients in 2015-16. Apparently no longer an aid darling in Canberra, Myanmar, the 11th biggest recipient of Australian ODA in 2015-16, falls just short of making this list. A big winner in the Abbott government’s first budget, Myanmar this year sees a 40 percent cut in its DFAT program budget, along with five other East Asian countries. Papua New Guinea Total Australian ODA: AU$553.6 million ($448.3 million) DFAT program spend: AU$477.3 million ↓4.9 percent Despite taking a nearly 5 percent hit to its DFAT program budget, Papua New Guinea emerges as the single-largest recipient of Australian ODA in 2015-16, a spot the country last held back in 2010-11. Health, education, law and justice, governance, transport and gender are priority sectors for Australian aid to Papua New Guinea. Australia’s biggest aid project in Papua New Guinea is the AU$400 million second phase of the Transport Sector Support Program (2014-2019). DFAT is currently accepting bids for its AU$90 million Justice Services and Stability for Development Program (2016-2019). Indonesia Total Australian ODA: AU$366.4 million DFAT program spend: AU$323 million ↓40 percent Currently the biggest recipient of Australian aid, Indonesia sees its DFAT program spend slashed by over 40 percent in 2015-16 — the largest decrease both in percent and actual figures for a bilateral program. While bilateral ties between Canberra and Jakarta have soured since Tony Abbott came into office, the Abbott government’s first budget last year had spared Indonesia from aid cuts. DFAT’s largest program in the East Asian country is the AU$524 million Australia’s Education Partnership with Indonesia (2011-2016). In addition to education, health, governance and infrastructure count as priority sectors for Australian aid to Indonesia. Solomon Islands Total Australian ODA: AU$176.7 million DFAT program spend: AU$92.7 million (no change) The most aid-dependent country in the world, the Solomon Islands sees no change in its DFAT program spend and remains the third-biggest recipient of Australian aid. Over the past decade, Canberra has pumped AU$2.6 billion into the Regional Assistance Mission to Solomon Islands, its flagship development initiative in the country. RAMSI’s governance component recently transitioned to the AU$68 million Solomon Islands Economic and Public Sector Governance Program (2013-2017). East Timor Total Australian ODA: AU$93.9 million DFAT program spend: AU$68 million ↓5 percent The dominant donor in East Timor, Australia plans to slash its DFAT program spend in the country by 5 percent. A partnership with the Asia Foundation, the AU$61.8 million Governance for Development program (2014-18) is the Australian government’s biggest aid initiative in East Timor. In addition to governance, education, health, justice, infrastructure and gender are also priorities for Australian aid to East Timor. Vietnam Total Australian ODA: AU$89.9 million DFAT program spend: AU$58.4 million ↓40 percent Slated for a massive 40 percent reduction in DFAT program spending, Vietnam nonetheless remains in the top five recipients of Australian aid. The AU$160 million Cao Lanh Bridge project (2011-2017), part of the Central Mekong Delta Connectivity Project, is currently the biggest Australian aid project in Vietnam. Australia is also the largest foreign provider of scholarships to Vietnam through its Australia Awards program. Philippines Total Australian ODA: AU$84.2 million DFAT program spend: AU$67 million ↓40 percent Also slated for a 40 percent cut in DFAT program spend, the Philippines’ development engagement with Canberra is mostly geared toward education, Australian aid’s flagship sector in the country. Australia’s largest aid program in the Philippines is the AU$150 million Basic Education Sector Transformation Program (2014-2019). Australia was also a major donor to relief and recovery efforts in the wake of Typhoon Haiyan in late 2013. Afghanistan Total Australian ODA: AU$81.7 million DFAT program spend: AU$78.5 million ↓40 percent Battered by allegations of fraud and mismanagement, DFAT’s Afghanistan program is also in line for a 40 percent cut. Canberra’s biggest bilateral aid program in Afghanistan is the AU$35.7 million Children of Uruzgan program (2011-2015), a basic education and health services initiative delivered by Save the Children. Australia also provides budget support to the Afghan government through the World Bank-managed Afghanistan Reconstruction Trust Fund. Cambodia Total Australian ODA: AU$79.1 million DFAT program spend: AU$52.4 million (no change) Cambodia is the only East Asian nation to be spared from the ax in the aid budget, a move which seems tied to the country’s decision to accept refugees bound for Australia — in return for AU$40 million in aid over four years. Valued at AU$105.8 million over 10 years (2007-2017), Australia’s global health engagement, including through the Second Health Sector Support Program, accounts for an outsized share of its aid program in Cambodia. Agriculture, infrastructure, law and justice and disability rights are also priorities for Australian aid to Cambodia. Bangladesh Total Australian ODA: AU$60.9 million DFAT program spend: AU$42.1 million ↓40 percent Education and social protection, including through cash transfers and livelihood programs, are priority sectors for Australia’s aid engagement with Bangladesh. Canberra delivers much of its aid program in Bangladesh through its three-year, AU$180 million strategic partnership agreement with BRAC. As a recent Devex analysis revealed, BRAC is DFAT’s top NGO partner worldwide. Vanuatu Total Australian ODA: AU$60.9 million DFAT program spend: AU$41.9 million (no change) By far, the dominant donor to Vanuatu, Australia has pumped upward of AU$15 million in humanitarian and recovery assistance to the South Pacific island nation devastated by Cyclone Pam in March. Australia’s biggest development program in Vanuatu is the AU$39.5 Education Support Program (2012-2016). In addition to education, economic governance, infrastructure, health, and law and justice are also priorities for Australian aid to Vanuatu. Check out more funding trends analyses online, and subscribe to Money Matters to receive the latest contract award and shortlist announcements, and procurement and fundraising news.