Australia's bid to become a 'multilateral player' in Indo-Pacific at risk over lack of funding

Australia has refreshed its international development programme with a focus on climate change and poverty eradication projects, but experts say a lack of new funding may jeopardise its success and its function to wield more influence in the region.

Increasingly, the provision of such aid has been used by states to gain more friends in the region, and for Australia, this tension has played out amid China's increased dealings with Pacific nations such as the Solomon Islands, which has benefited in the past from significant aid donations from Canberra.

But regardless of whether Australia's latest initiative was targeted at countering China's influence, to execute the programme properly there needed to be more funding, said chief executive of the aid sector's peak body Australian Council for International Development's (ACFID) Marc Purcell.

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

"Is the budget enough? No, it's not, and we need to do more," he said, given Australia's ambitions to extend aid into Southeast Asia and South Asia alongside the Pacific nations.

For the 2023-24 financial year, Australia allocated A$1.4 billion (US$900 million) from its overseas development funding to the Pacific, and just over A$700 million to Southeast Asia. This has been official since the May budget and the programme announced on Tuesday outlined the blueprint for this budget rather than new funds.

Purcell said Australia was "well below the OECD average [in aid spend]" and that to get back up to average, "there's a lot more to be done and arguably other players that are coming into the region such as China and the US are much bigger donors".

Even though additional funding had been allocated in the last two budgets by the current Anthony Albanese government, to provide aid and facilitate things such as labour migration, as well as potentially running a climate change conference with the Pacific nations in three years, more money was required, Purcell added.

Australia would need to lift its game to reach the average developed country contribution of 0.3 per cent of gross national incomes, Purcell added. Currently, Australia provides 0.2 per cent of its gross national income.

At the May budget, the Albanese administration had improved on the allocation provided by the previous Morrison coalition government, committing a further A$1.7 billion over five years.

"The reality is, you can't host a UN conference without putting new money on the table, nor can you bid for a [UN] Security Council seat without being a much greater multilateral player," Purcell said. "So it remains to be seen if the [funding] is enough to do the job."

The ACFID also wants to see aid offered to regions outside the Indo-Pacific region and more "tangible commitments on how the development programme will lift people out of poverty".

Cameron Hill, a senior research officer at the Australian National University's Development Policy Centre, said the strategy also did not address that the growth funding promised at 2.5 per cent a year meant funding would remain flat in real terms until at least 2036-37.

Without real funding growth, the Australian government would be hard-pressed to see through new commitments, including gender equality.

Hill also said the last Morrison government had demonstrated "clear ambivalence towards aid". It was accused of having "the worst Australian foreign policy failure" in the Pacific after the Solomon Islands struck a new security pact with China last year.

For that reason, development aid needed to be adequately funded to serve Australia's national interests, said Melissa Conley Tyler, executive director at development, diplomacy and defence group AP4D.

While she agreed there were funding challenges, Conley Tyler said the policy set out to "make the case for more effective development spending".

Australia's Minister for International Development and the Pacific Pat Conroy was confident the new programme would "advance Australia's national interest and add another tool to Australia's armoury of statecraft", although he would not be drawn into saying the programme was targeted at China during local media interviews on Tuesday.

China has been a big aid provider in the Indo-Pacific, and in Southeast Asia for example, it is the region's largest development partner and its biggest source of official development finance.

Conroy said, against geostrategic competition in the region, the new programme had an edge in that Canberra would stipulate that local workers and materials must be used in development projects.

"It's a key differentiator between how Australia will do development in the region versus other countries, and it's to our advantage," he said in one of his local media interviews.

This article originally appeared on the South China Morning Post (SCMP).

Copyright (c) 2023. South China Morning Post Publishers Ltd. All rights reserved.