Australian aid's pivot to the Indo-Pacific

From the amalgamation of the Australian Agency for International Development to the 5 billion Australian dollar ($4.7 billion) cap on annual aid spending, Prime Minister Tony Abbott’s conservative government has brought about a dramatic change of course for the Australian aid program. Last week’s release of a new aid policy framework for Australian aid seemed to confirm yet another major change in policy: Australian aid won’t go much further than the Indo-Pacific any longer. “In the past, [our aid program has] been spread far too thinly across the globe for reasons often not related to poverty alleviation, thus putting at risk our ability to achieve results in the geographic region where I believe we have a primary responsibility the Indian Ocean Asia Pacific,” said Australian Foreign Minister Julie Bishop as she rolled out the aid framework called “The New Aid Paradigm.” While in opposition, Bishop and her conservative colleagues had slammed the previous Labor government’s expansion of Australian aid to Africa and Latin America and the Caribbean — and pledged to refocus Australia’s aid program on the country’s immediate neighbors once in power. At first glance, the Abbott government’s new aid framework seems to live up to this promise. Devex’s analysis of the Abbott government’s aid spending, however, reveals the Australian aid pivot to the Indo-Pacific augurs far more modest changes in the direction of Australian aid than might be anticipated. Further, a closer reading of “The New Aid Paradigm” suggests that to some degree, it provides an opening for an expansion rather than a contraction of Australian aid’s geographic commitments. A (very) modest spending realignment In its new aid framework, the Abbott government pledges to channel 90 percent of its country and regional assistance to the Indo-Pacific — a region generally understood to include South Asia, East Asia and the Pacific. According to Bishop, the goal here is to direct Australian aid to the single region where it can achieve the greatest impact and still align closely with Australian national interests. In 2014-15, the Abbott government anticipates the Indo-Pacific share of Australian country and regional aid will approach 92 percent — compared with 88 percent under the previous Labor government’s 2013-14 budget. Put in the proper context, however, it becomes apparent that the Abbott government’s 90 percent target for aid to the Indo-Pacific isn’t very ambitious. For many years now, Australian aid has already been tightly focused on the Indo-Pacific — over the course of the past six years, the region’s share of Australian country and regional aid has averaged 85 percent. In 2009-10 — two years into the previous Labor government — the Indo-Pacific region’s share of Australian country and regional aid topped 89 percent, just below the Abbott government’s current target. And while the Abbott government has touted plans to phase out aid to Latin America as proof of aid realignment to the Indo-Pacific, the region accounts for just 1 percent of country and regional programs. Elsewhere in the Australian aid portfolio, the Abbott government is scaling back programs in Africa, but those also comprise a relatively small portion of Australian country and regional aid (8 percent). Asia-Pacific to Indo-Pacific Yet even as the Abbott government’s aid pivot to the Indo-Pacific doesn’t seem to augur a major realignment in spending priorities for Australian aid, the new policy may have greater policy and funding implications down the road for its emphasis on the Indo-Pacific rather than the Asia-Pacific region as the focus of Australian aid. Despite expanding the reach of the former AusAID globally, the last Labor government had nonetheless stressed the Asia-Pacific — counting East Asia and the Pacific — as the highest priority region for Australian aid — in line with long-standing Australian foreign policy. The Gillard Labor government’s comprehensive aid policy framework pledged to channel 75 percent of Australian aid to the Asia-Pacific region by 2015-16. (It is worth noting that Australian defense officials had begun to emphasize “Indo-Pacific” instead of “Asia-Pacific” even under Labor.) By most accounts, the Abbott government’s emphasis on the Indo-Pacific region in its aid strategy and broader foreign policy is aimed at projecting Australian interests beyond its traditional sphere of influence — particularly to India, which saw the previous Labor government recently wind down the Australian aid program. While the spending-wary Abbott government is unlikely to resume aid engagement with New Delhi or expand the Australian aid footprint in a post-drawdown Afghanistan, the change in tone arguably sends the message to Canberra’s remaining major development partners in South Asia — including Bangladesh and Sri Lanka — that they enjoy equal standing in the Australian aid portfolio as Canberra’s closest neighbors. Some might even argue that this contradicts the Abbott government’s commitment to tighten the geographic focus of the Australian aid program. For 2014-15, the Abbott government has set aside 14 percent of its Australian country and regional aid spending to South and West Asia — including Afghanistan — which is roughly flat from prior years. Do you agree with the Abbott government’s plans to refocus Australian aid on the Indo-Pacific region? Let us know by leaving a comment below. Check out more insights and analysis provided to hundreds of Executive Members worldwide, and subscribe to the Development Insider to receive the latest news, trends and policies that influence your organization.