The future of aid, how aid agencies need to evolve and the impact of Australia’s foreign aid cuts were among the hot topics on Day One of the Australasian Aid Conference in Canberra.
The two-day research conference, organized by Australian National University’s Development Policy Center and The Asia Foundation, kicked off with Australia’s shadow foreign minister Tanya Plibersek criticizing the conservative coalition government’s aid cuts. The Abbott-led coalition has slashed the foreign aid budget by 11 billion Australian dollars ($8.6 billion) since coming to power in 2013.
Plibersek said amalgamating the Australian Agency for International Development into the Department of Foreign Affairs and Trade had led to a significant loss in expertise and aid specialists that would be difficult to regain as most had “got new jobs.” The shadow minister said if Labor came to power, one of its crucial medium-term projects would be to “return that degree of expertise.”
And expertise is certainly needed.
Researchers and advisers to recipient country governments who spoke at the conference noted foreign aid still has a crucial role to play in development over the next decade.
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Robin Davies, associate director of the Development Policy Center, shared the findings of a multidecade aid allocation analysis and survey of developing country governments, which found the majority saw a significant need for aid over the next five to 10 years.
The massive need for infrastructure in developing countries will likely drive aid in the years ahead. Beyond financing, however, these countries will need skills and expertise.
“[East Timor] has spent a lot of money, almost 1 billion for the electrification [of a country of 1.1 million people] but now the focus is on the roads,” said Guteriano Neves, an adviser to the Southeast Asian government on macroeconomics and regional integration affairs.
Neves said East Timor would continue to seek aid to build its roads because local contractors did not have the skills and capabilities when it came to infrastructure. Since 2007, massive revenues from the petroleum sector have seen East Timor become less dependent on foreign aid, which now accounts for some 10 to 12 percent of total public expenditure.
A favorable eye on China
But all of the researchers and advisers who spoke at the conference emphasized the need to aid agencies to better align themselves with developing countries. They also expressed lingering frustrations with traditional donors around coordination and speed.
It’s a good thing that new sources of financing, such as China, are emerging, Davies said. In some ways, this “makes it easier for traditional donors to refocus on global public good” or benefits.
The rising role of China as an aid donor was in fact a dominant theme throughout the conference. Phanthanousone Khennavong, a technical adviser for the National Roundtable Process in Laos, spoke of how Chinese officials were looked upon favorably as development partners because they approached without a “know-all” attitude, saying: “We come and learn from you and then you learn from us and we all benefit.”
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And while some saw signs China is shifting away from focusing on infrastructure, this is still the dominant aspect of the government’s foreign aid policy. Zhou Taidong, dean of the College of Humanities and Development at China Agricultural University, pointed out that infrastructure is where China “has the expertise and skills.”
Taidong did say that the East Asian behemoth’s tendency to use Chinese companies and workers to implement aid projects in partner countries may change in the near future, as the labor in the country is becoming “increasingly expensive.”
Davies further noted how the rise of global problems like climate change and infectious disease control were sparking a call for “international public finance resting on a new public benefits rationale,” rather than traditional aid.
How will China’s rising development role in Asia and the Pacific affect the foreign aid architecture not just in the region, but worldwide? Let us know by leaving a comment below.
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