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Minister's Foreword 2000-01
The Australian aid program aims to advance our national interest by assisting developing countries to reduce poverty and achieve sustainable development. Australia's progress in implementing this objective and the policy framework provided in Better Aid for a Better Future received high praise when reviewed recently by the OECD Development Assistance Committee. The review concluded that since 1996, Australia's aid program has undergone an impressive process of restructuring and renewal, putting Australia in the vanguard of DAC members' aid management practices. Australia's assistance to development and stability in the Asia Pacific region was also recognised.
In 2000-01 the Australian Government will provide $1,600 million as official development assistance. This is an increase of almost $100 million on the 1999-2000 budget figure (of $1,502 million) and represents a four per cent increase in real terms. It maintains Australia's ODA/GNP ratio at 0.25 per cent, placing us above the latest (1998) average of donors of 0.24 per cent.
The Government responded strongly to additional demands as they arose during the course of 1999-2000. This included providing an additional $60 million for East Timor, $12 million for the Heavily Indebted Poor Countries Initiative, and $48 million for expenditure on Kosovar and East Timorese evacuees in Australia. The final ODA outcome for 1999-2000 is estimated to be $1,651 million.
In addition to total ODA, the Government provides generous tax deductions for public contributions to non government organisations.
Responding to the region's development needs
Australia's aid program continues to focus on longer-term development needs in the Asia Pacific and responding to the historic political, economic and social changes occurring in the region.
With the longer-term effects of the East Asian financial crisis still being felt, Australia is helping those countries most affected to achieve a sustainable recovery. Australia will maintain a strong commitment to assist Indonesia, our second largest aid recipient, during its enormous political and economic reform process. Other East Asian countries also remain priorities for Australian aid. The new Treaty on Development Cooperation between Australia and PNG will ensure Australia's aid is more effective, transparent and accountable in meeting PNG's development needs. Australia's aid to the Pacific assists these nations develop the maximum possible degree of self-reliance. Outside our immediate region Australia's aid is focused selectively on development needs in southern Africa and the Middle East. In South Asia, Australian aid concentrates on the needs of the most vulnerable poor.
The turmoil in East Timor following the August 1999 popular consultation placed Australia at the forefront of a major peacekeeping and humanitarian operation. Australia has provided total assistance of at least $75 million for vital emergency relief activities, to assist UN agencies with logistics and coordination, and for contributions to international trust funds that will help East Timor prepare for its reconstruction and future development. This major commitment will continue as Australia helps the East Timorese to build a viable and democratic nation.
In addition to broader social and economic development needs, natural disasters and man-made tragedies have caused human suffering and economic damage. Floods in Viet Nam and Mozambique, the cyclone in Orissa, food shortages in North Korea, and ethnic unrest in the Solomon Islands have taken their toll. The earthquake in Turkey, humanitarian emergencies in the Balkans, and floods in Venezuela have caused widespread devastation. Australia will continue to respond generously to such crises as they arise.
Unsustainable debt burdens are a serious problem for many poor countries striving to tackle poverty and achieve sustainable development. The Government will provide 100 per cent debt forgiveness to countries that qualify for debt relief under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. There are two countries-Nicaragua and Ethiopia-which have debts to Australia and are expected to qualify for relief. This is in addition to the aid budget and complements the $55 million Australia has already pledged toward the World Bank and IMF's HIPC-related costs.
Features of the 2000-01 Aid Budget
A priority for 2000-01 will be Australia's continued role in East Timor. With security now established and the need for emergency relief abating, East Timor is entering a phase of reconstruction and rebuilding. Australia's contributions will help build the foundations of a democratic and independent East Timor. The focus is on restoring basic services, supporting the establishment of government and administrative structures, rebuilding livelihoods, promoting reconciliation and supporting multilateral reconstruction and development efforts. Consistent with Australia's capacity to assist and East Timor's development needs, the Australian Government has committed $150 million over the next four years ($100 million of which is additional funding) towards the reconstruction of East Timor. This funding will be phased as follows:
- $40 million in 2000-01 to assist with international reconstruction efforts and to build an ongoing bilateral program with East Timor
- $40 million in 2001-02, $35 million in 2002-03, and $35 million in 2003-04 for a continuing program of assistance.
Assistance for economic recovery and governance reform, to ensure people become less vulnerable to future shocks, will continue to be a feature of Australia's aid to other parts of East Asia and the Pacific, including:
- $6 million to establish the Asia Recovery and Reform Fund. This will complement the support provided through the bilateral country programs to assist countries most affected by the aftermath of the financial crisis with capacity building, financial and public sector reform, and strengthening social protection mechanisms
- maintaining Australia's commitment to Indonesia, with total flows estimated at around $120 million. This will assist Indonesia to implement its extensive reform program
- an increase of $1 million for the Solomon Islands country allocation, taking it to $14.5 million. This recognises and encourages continued economic reforms by the Solomon Islands' Government
- an additional $940,000 to the Policy and Management Reform program in the Pacific, bringing the program to $15 million. This will further support and reward Pacific island countries embarking on economic and public sector reform.
The importance of informing Australians about the aid program and involving them in its development and delivery is a high priority for the Australian Government. Some of the most effective ways this can be done is through strong grassroots development and smaller-scale projects to address longer-term development and governance reforms. Key initiatives for 2000-01 include:
- an increase of over $885,000 for non government organisations through the AusAID NGO Cooperation Program (ANCP). This will assist some 50 accredited Australian NGOs implement community-based projects in the Pacific, East and South Asia, and Africa
- an additional $700,000 to volunteer organisations in recognition of the contribution of Australian volunteers. This includes increases to Australian Volunteers International, AESOP, INTERSERVE, and PALMS
- a 30 per cent increase to $1.3 million in the Human Rights Fund. This builds on last year's increase, expanding further Australia's capacity to fund small community-based human rights activities
- an additional $300,000 for the Direct Aid Program administered by Australia's overseas missions. Missions will continue to respond directly and quickly to local, small-scale development needs through this $3.3 million program
- an additional $490,000 for outreach activities. This will enable the aid program to conduct further community outreach activities in rural and regional areas. These activities provide an important opportunity to inform and involve the wider community in the aid program.
Other features of the 2000-01 aid budget include:
- $5 million for continuation of the Australian Youth Ambassadors for Development (AYAD) program. I announced the program in 1998, as a two-year pilot, to foster strong links between Australia and partner countries by placing skilled young Australians on development assignments throughout the Asia Pacific region. Following its success with young Australians and strong support from Australian organisations and partner countries I have decided to establish AYAD as an ongoing aid program
- a 10 per cent per annum increase over the next three years for the Commonwealth Fund for Technical Cooperation to take total funding to $9.5 million in 2002-03; and continued support for the Commonwealth's Trade and Investment Access Facility with an annual grant of $500,000 a year for the next three years. The Prime Minister announced these contributions at the Commonwealth Heads of Government Meeting (CHOGM) in 1999, to further work in areas such as supporting democratic and legal institutions, economic and debt management, and helping developing countries manage the impact of globalisation.
Conclusion
In 2000-01 Australia will continue to play a practical and positive role in the development of the Asia Pacific region. Australia will be a key player in working with the East Timorese, United Nations, World Bank and other donors to ensure a stable and viable East Timor. The Australian Government will continue to respond generously to crises in the region, and maintain a capacity to assist beyond it. Australia's focus on restoring economic growth and development will be maintained. Longer-term development programs, from large-scale to grassroots development activities, will remain a priority. The Australian government will strengthen its capacity to inform Australians about the aid program and involve them in its development and delivery.
Australia has clearly demonstrated its development credentials over the past year. The Australian aid program has remained alert and responsive to the rapidly changing environment, particularly in the region. Driven by quality and the need for real impact, Australia has focused on assisting neighbouring countries to reduce poverty and achieve sustainable development. Implementation of the directions and principles set out in my 1997 statement, Better Aid for a Better Future, has seen the OECD Development Assistance Committee commend Australia for its efforts. Australia's commitment will continue in 2000-01.
Alexander Downer
Notes to Table 1
1 Total aid flow estimates for 1999-2000 and 2000-01 are not strictly comparable to historical expenditure figures (which are based on figures published in the Statistical Summary 1997-98: Australia's Overseas Aid Program). Historical figures do not apportion regional program expenditure by country. Refer to Table 4 for a direct comparison between historical and estimated country program allocations.
2 Shows total aid flows for the estimated Budget Figure as at May 1999 of $1,502 million and estimated Expected Outcome as at May 2000 of $1,651 million. The estimated Expected Outcome for total aid flows includes additional funding in 1999-2000 (e.g. Heavily Indebted Poor Countries Initiative $12 million, East Timor Ad Hoc Appropriation $60 million and $48 million for expenditure by other Government Departments on Kosovar and East Timorese evacuees in Australia).
3 Shows expenses plus cash from capital injections and special appropriations, minus new commitments to multiyear liabilities such as the World Bank. It is not strictly comparable to cash figures, but the difference is less than 0.5 per cent.
4 The Pacific Policy and Management Reform Program is included in the total aid flows to individual Pacific island countries.
5 East Timor aid program funding includes: $60 million Ad Hoc Appropriation (less Departmental costs of $0.7 million) and $12.5 million for emergency assistance - totalling $71.8 million. In addition, there was an estimated $9.48 million of Australian aid to the East Timorese when East Timor was still a province of Indonesia, bringing total aid assistance in 1999-2000 to the East Timorese to around $81 million.
6 Increase due largely to increases in other Government Department expenditure, including $27.5 million for Kosovar evacuees in Australia.
7 See the statistical annex for an explanation of this reconciliation.
8 Compares 1999-2000 estimated Expected Outcome with 1998-99 Expenditure.
9 Real per cent change over 1999-2000 estimated Budget Figure.
10 This compares ODA to GNI, not GNP, but the two measures are very similar. In late 1998, the Australian Bureau of Statistics changed its method of calculating GNI resulting in all historical measures of GNI, GNP and GDP being revised upwards and, consequently, ODA/GNP ratios revised downwards.
