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Chapter Three: Asia and Africa



East Asia

East Asia regional development indicators

Country

GNP per capita
($A)

Access to water
(% of population)

Life expectancy (years)

Adult literacy
(% of population)

Indonesia

984

76

66

87

Vietnam

673

56

68

93

Philippines

1,796

87

69

95

China

1,450

75

70

84

East Timor

471

48

57

47

Cambodia

449

30

56

68

Laos

501

90

53

47

Thailand

3,470

80

70

95

Burma

-

68

56

84

Mongolia

673

60

63

62

         

Source: GNP per capita: DAC, 2000; other indicators: Human Development Report, UNDP, 2001; East Timor: East Timor - Building Blocks for a Nation, UN common country assessment, 2000.

Estimated total aid flows to East Asia in 2002-03 $470.8 million

Diagram 11: Estimated total aid flows to East Asia by country 2002-03

Diagram 11: Estimated total aid flows to East Asia by country 2002-03

Regional Overview

This year will be challenging for many East Asian countries. Achieving significant economic growth and poverty reduction is likely to remain problematic. Key factors will be the health of the world economy and the demand for regional exports. The global economic slowdown impacted significantly in 2001-02, with regional growth of around 4.3 per cent in calendar year 2001, compared with around 7.6 per cent in 2000. The outlook is likely to remain subdued and will be highly dependent on conditions in the US and Europe, given Japan's ongoing economic difficulties.

Most regional countries appear to be in better shape to weather the immediate effects of this slowdown than they were in 1997. They have achieved more sustainable current account positions, improved foreign reserves and in several cases implemented more flexible exchange rate regimes. However, systemic structural weaknesses remain, particularly the restructuring of bad debts and slow progress in corporate governance reforms to enhance transparency and ensure the flow of resources to profitable enterprises. Maintenance of an outward orientation is vital so that countries reap the substantial benefits of international trade and investment. The launch of a new round of WTO trade negotiations provides a good opportunity and significant incentives for regional countries to increase the pace of their reform efforts.

Regional program

Regional program estimate $30.0 million

The Asia regional program complements Australia's bilateral assistance by addressing trans-boundary development challenges and strengthening regional cooperation and economic integration. Increasingly, the program is focusing on longer-term capacity building. It will also aim to develop a stronger role in analysis of economic and development issues in South-East Asia. The program strategy gives priority to governance (including economic management, trade and related economic integration issues and social protection) and health (including HIV/AIDS). Activities aim to assist economic growth, while building capacity to address the needs of some of the poorest and most marginalised people in the region.

International trade is crucial to sustainable development and poverty reduction in the region. The new round of multilateral trade negotiations agreed at the WTO Ministerial Meeting in Doha in November 2001 will be central to encouraging more open trade. Australia recognises that developing countries require assistance to engage effectively in WTO negotiations. In 2002-03, Australia will work with partner countries to develop a WTO capacity building program. A four-year regional program is being developed to strengthen the capacity of countries to manage plant and animal pests and diseases, enhancing their ability to participate in international trade. This program has the added benefit of strengthening Australia's `forward defences' against pests and diseases.

The Asia regional program will be a major vehicle for trade related technical cooperation with ASEAN. It will help advance Australian interests within the APEC group and will also contribute to the Closer Economic Partnership between the ASEAN Free Trade and the Australia New Zealand Closer Economic Relations agreements. Capacity in areas such as customs cooperation, quarantine and electronic commerce will be strengthened. Key mechanisms include the APEC Support Program and the $45 million six-year ASEAN Australia Development Cooperation Program.

HIV/AIDS is a serious health and development challenge for the region. An estimated six million people in South and South-East Asia are now living with HIV/AIDS. The region has some of the fastest transmission rates in the world. In parts of the region, including Burma, China and Vietnam, injecting drug users account for up to two-thirds of all reported cases of HIV infection. Starting in 2002-03, Australia will implement a four-year, $9.6 million program to strengthen the capacity of governments and communities to reduce HIV transmission associated with drug use. The program will involve health, police, and other key agencies.

Trafficking in women and children, including for sexual exploitation, is an increasing problem in Asia and is estimated to affect several million people. As part of a broader commitment by the Australian Government to combat people trafficking, the Asia regional program will begin implementing a $5 million project to improve regional cooperation to stamp out illegal trafficking. The project will have a particular focus on improving regional legal frameworks and their implementation.

Another priority for the program for 2002-03 will be implementation of phase two of the $5 million Social Protection Facility. The facility supports the development and delivery of social protection programs for the poor and vulnerable in Indonesia, the Philippines, Thailand and Vietnam. Attention is being given to issues such as social service delivery and financing, health insurance and the training of social service providers.

Bilateral Programs

Indonesia

Country program estimate $102.0 million
Estimated other flows $19.6 million
Estimated total aid flows $121.6 million

The 2001-03 Australia-Indonesia development cooperation strategy aims to contribute to poverty reduction, sustainable economic recovery and democratisation in Indonesia. Alongside major programs of assistance with health, water supply and basic education and training, Australia is working to build capacity in key institutions of government and civil society.

Australia will continue to assist Indonesia in implementing its extensive program of economic and financial management reform. Key areas of cooperation include work to develop a comprehensive anti-money laundering regime and assistance with taxation reform. Australia will also assist the Indonesian Government with the critical task of managing domestic government debt through a new three-year project with the Indonesian Ministry of Finance.

Successful decentralisation of government functions and responsibility is critical to Indonesia's development. In 2002-03 Australia will continue to support the development of an appropriate fiscal framework for decentralisation, and to build the capacity of local governments in Indonesia.

In 2002-03 Australia will support an initiative that will help build the capacity of Indonesian community based organisations and non-government organisations (NGOs). This initiative will also support an expanded program of community development activities.

Conflict in Indonesia continues to act as a significant impediment to sustainable development. More than 1.3 million Indonesians have been displaced from their home communities and many more are vulnerable. In 2002-03 the Disaster Management and Conflict Prevention Program will aim to build indigenous crisis management capacity and support initiatives aimed at positively influencing the dynamics of conflict.

Vietnam

Country program estimate $59.4 million
Estimated other flows $12.8 million
Estimated total aid flows $72.2 million

The past decade has seen average yearly incomes in Vietnam double (from US$200 to US$400 per capita) and poverty levels halve (from 75 per cent of the population to 37 per cent) as a result of strong economic growth. Sustaining these high growth rates will require the creation of appropriate legal, administrative and economic institutions for a market economy.

In recognition of this, Vietnam announced a range of governance reforms in 2001. Australia's new governance initiative will support these reforms by providing responsive and targeted policy advice, expert assistance and short-term training. For example, Australia will provide assistance to the Vietnamese Ministry of Agriculture and Rural Development to develop and implement appropriate policies to maximise the domestic benefits and manage the costs of agricultural trade reform.

The poor in Vietnam are predominantly located in remote rural areas, constrained by limited infrastructure, weak links to the local and international economy and low quality social services. The aid program has sharpened its focus on linking the poor to local and international markets, increasing access to agricultural and rural development knowledge and managing risk and vulnerability. A new rural development project in Quang Ngai province will increase incomes for 35,000 rural poor through small-scale credit, agricultural training and provision of roads to improve access to markets.

Australia's aid to Vietnam is underpinned by education and training activities that aim to increase Vietnam's human capacity. As one component of this support, Australia will provide up to 200 new scholarships for Vietnamese to study in Australian universities, in priority areas including rural development, governance, education and health.

Australia continues to assist Vietnam to protect our joint investment in the $90 million My Thuan Bridge in the Mekong Delta through support for ongoing monitoring and maintenance. This includes assisting the University of Economics in Ho Chi Minh City to increase its skills in project monitoring and evaluation. Since the construction of the bridge, vehicle traffic across the river has more than doubled.

Philippines

Country program estimate $55.5 million
Estimated other flows $7.5 million
Estimated total aid flows $63.0 million

The aid program's geographic focus is on the rural poor in the southern Philippines, including Mindanao, with Australian support targeting rural incomes, health, the environment and education.

In 2002-03, the quality of management of basic education in three regions of Mindanao will continue to be improved with Australian support. Work is ongoing in four of the poorest provinces in the southern Philippines to enhance the quality and responsiveness of rural service delivery and to provide opportunities for the rural poor to improve their quality of life.

The program is also supporting good governance by assisting with the development of policies; building capacity at the community, local and national level; and providing short-term targeted assistance to Philippine government programs for vulnerable groups. Australia's aid also targets systemic development constraints including land reform and administration, local government capacity and health service delivery at the local level.

China

Country program estimate $40.0 million
Estimated other flows $15.5 million
Estimated total aid flows $55.5 million

Australian development cooperation with China will continue to focus on governance and the reduction of poverty in selected rural areas of western China. The program will address rural poverty through targeted interventions that are integrated with China's own poverty reduction programs. It will focus on practical assistance where Australia has recognised expertise, such as planning and local government processes, agriculture and rural development, water supply and sanitation, and basic health and education. A key priority in 2002-03 will be the development of a new governance program that supports China's reform agenda and builds on previous support for China's transition to a market economy.

Australia will continue to support a human rights technical cooperation program to strengthen the protection, promotion and administration of human rights, especially in the areas of legal reform, women's and children's rights and ethnic and minority rights.

Several major new aid projects will begin implementation in 2002-03 in the areas of health, education and environment. Australia will help to improve the capacity of the Tibet Autonomous Region to provide basic health care and to respond to the threat of HIV/AIDS. The Xianyang Integrated Rural Health Project will raise the health status of rural poor through improved health planning and management, service delivery and community understanding of health issues. A major education project in Chongqing Municipality is promoting the reform of China's vocational education and training system by demonstrating alternative, demand driven approaches.

Livelihoods in rural China will be improved through two new environmental management projects commencing in 2002-03. In Qinghai, Australia will address environmental degradation caused by erosion, thereby improving agricultural productivity of land and increasing employment and labour productivity. In Hebei, Australia will promote affordable methods to increase agricultural productivity and diversify crops in order to improve the economic resilience of poor households.

East Timor

Country program estimate $30.0 million
Estimated other flows $6.0 million
Estimated total aid flows $36.0 million

The goal of Australia's aid to East Timor is to reduce poverty and build East Timorese capacity to govern a peaceful, democratic and independent East Timor. Australia's program strategy will be reviewed after East Timor gains independence on 20 May 2002 to ensure that it reflects the priorities of the new East Timorese government. It is anticipated that it will build on the foundations of the previous strategy, which included support for improved governance, rural development, water supply and sanitation, health, education and training, and continued engagement and coordination with other donors.

In 2002-03 a major capacity building initiative is proposed to strengthen capacity and service delivery across key sectors of government and public administration. Australia will also support three major new development programs designed to promote sustainable development and reduce poverty, especially in rural areas. A Rural Development Program will increase food security and help re-establish rural livelihoods in three districts. A rural water supply project will bring clean water to three districts. Australia will also help strengthen the capacity of the Department of Water Supply and Sanitation. In addition, Australia will assist health service delivery, health promotion and HIV/AIDS prevention, and provide specialist surgical services. A scholarship program will target East Timor's highest priority skills needs.

Cambodia

Country program estimate $24.5 million
Estimated other flows $15.1 million
Estimated total aid flows $39.6 million

Australia's bilateral aid program to Cambodia aims to reduce poverty and support the country's transition towards sustainable, broad-based development. The program focuses on improving productivity and profitability in the agriculture sector, strengthening service delivery especially in the health sector, and supporting key governance reforms. The program also supports education and training activities, community development through NGOs, and efforts to address the problem of land mines.

In 2002-03, major activities in agricultural research, extension and quality improvement will continue to bring benefits to poor rural households. Australia is examining the means of strengthening health service management, delivery and promotion in Kampong Cham, Cambodia's most populous province.

Building on a successful project in the criminal justice sector, Australia will provide further assistance to help strengthen the rule of law and protection of human rights in Cambodia.

Australian NGOs will implement two new rural microfinance initiatives that will allow up to 31,000 poor people in 7 provinces to improve access to credit and savings services at village level. Australia will also fund a new NGO project that will support basic education by training 40 community teachers and allowing up to 10 new schools to be created in a disadvantaged highlands region.

Thailand

Country program estimate $12.0 million
Estimated other flows $9.6 million
Estimated total aid flows $21.6 million

Thailand's relatively high level of development and its important position in the Mekong sub-region, both geographically and economically, provide a sound basis for the evolution of the aid relationship from donor/recipient to development partnership in the region. A recently agreed trilateral aid partnership will see Australia and Thailand jointly implement activities for third countries in the Mekong sub-region, initially with a focus on HIV/AIDS issues.

Australia's current assistance is primarily focused on building Thailand's capacity to address economic and public sector governance issues. The new Thailand-Australia Government Sector Linkages Program will promote institutional strengthening and capacity building in Thai Government agencies, including the Bureau of the Budget and the office of the Prime Minister. The program utilises a partnership approach, with joint activities planned and implemented by Australian and Thai Government agencies. Direct assistance to the poor and disadvantaged will continue through grants to local NGOs and through a new project that is strengthening the Thai Government's support to local community organisations.

Laos

Country program estimate $13.5 million
Estimated other flows $5.5 million
Estimated total aid flows $19.0 million

Laos remains one of the poorest countries in East Asia, with 39 per cent of the population living below the poverty line. Access to even very basic health and education services is limited. Australia therefore seeks to increase the accessibility and quality of basic services particularly in remote rural areas.

February 2002 saw the start of a five-year initiative to improve the health of the populations in two remote northern provinces by encouraging better nutrition, reducing the incidence of communicable diseases and cutting infant and child mortality. The initiative focuses on improving the skills of health providers and the development of health management systems. In addition, the Australian Government will provide approximately $3.7 million to Australian NGOs to work directly with communities in remote areas to provide water and sanitation facilities, HIV/AIDS awareness programs, blindness prevention, vocational training, and small-scale irrigation programs.

The very limited domestic revenue base for the government of Laos is a major constraint to long-term development. Australia has been providing support to a successful land-titling project that has already led to the registration of 20,000 titles. The anticipated next phase of the project will extend existing achievements and strengthen the Lao Government's capacity to collect land tax.

Burma

Country program estimate $3.0 million
Estimated other flows $3.2 million
Estimated total aid flows $6.2 million

In 2002-03, Australia's small bilateral aid program to Burma will focus on the humanitarian crisis that is engulfing the country. Australia will directly address issues that impact on the health of Burma's people, especially children. Initiatives to improve the human rights situation will also continue. In 2002-03 Australia will expand the focus of its human rights assistance by providing specific training to Burmese officials, including training on the Convention on the Rights of the Child.

In Burma, an estimated one in three children under five years old suffers from malnutrition. To address this situation, in 2002-03 Australia will implement a project targeting child and community nutrition. In addition, the Australian aid program will continue to support Australian and international NGOs and United Nations (UN) agencies as they address Burma's development problems at the community level. This includes significant anti-HIV efforts and a demand reduction program to reduce drug abuse in north-east Burma.

Australia also provides health support, shelter, food and distance education to approximately 130,000 refugees in twelve camps on the Thailand/Burma border.

Mongolia

Country program estimate $2.5 million
Estimated other flows $0.7 million
Estimated total aid flows $3.2 million

Australia will continue to support the Mongolian Government in its reform of financial management and promotion of transparent and accountable systems in key Mongolian ministries on issues relating to the country's economic transition. Australia is also providing assistance to improve access to clean water and the delivery of essential services, particularly in the poorer areas of the capital, Ulaanbaatar.

South Asia

South Asia regional development indicators

Country

GNP per capita
($A)

Access to water
(% of population)

Life expectancy (years)

Adult literacy
(% of population)

Bangladesh

656

97

59

41

India

794

88

63

57

Sri Lanka

1,502

83

72

91

Nepal

380

81

58

40

Pakistan

811

88

60

45

         

Source: GNP per capita: DAC, 2000; other indicators: Human Development Report, UNDP, 2001.

Estimated total aid flows to South Asia in 2002-03 $110.0 million

Diagram 12: Estimated total aid flows to South Asia
by country in 2002-03

Diagram 12: Estimated total aid flows to South Asia by country in 2002-03

Regional Strategy

With half a billion people living on less than two dollars a day, South Asia contains nearly 40 per cent of the world's most impoverished people. Australia is assisting countries of the region to achieve food security, improve access to quality primary education, mitigate environmental degradation and improve health outcomes.

To be effective and deliver quality outcomes, Australian aid to South Asia is focused in a few key sectors including basic education, water and sanitation, and natural resource management. It is also focused in identified geographic areas. Building capacity to assist women and children in the region is a particular theme.

Australian assistance aims to:

  • enhance human capital and help to improve service delivery in key sectors
  • support reform and assist in strengthening governance
  • strengthen the ability of governments to address the needs of vulnerable groups.

Conflict has been a major impediment to development in South Asia: diverting resources, destroying livelihoods and displacing communities. Australia is active in humanitarian efforts to respond to the victims of conflict.

Bilateral Programs

Bangladesh

Country program estimate $22.2 million
Estimated other flows $13.4 million
Estimated total aid flows $35.6 million

The provision of up to 50,000 metric tonnes of Australian wheat will continue to support Bangladesh's efforts to achieve food security for 400,000 extremely poor people. Access to better quality primary education for girls in Bangladesh will remain a key focus. More than 20,000 poor people in the Chittagong Hill Tracts will benefit from microfinance programs that will improve their livelihoods.

India

Country program estimate $15.0 million
Estimated other flows $7.1 million
Estimated total aid flows $22.1 million

Australia and India have agreed that Australian assistance will target some of the most disadvantaged areas in the country in the north and north-eastern regions. Australia will support the efforts of Governments and communities in these areas to improve access to quality education, health and water and sanitation.

Water supply and sanitation projects being developed in 2002-03 aim to demonstrate the advantages of water sector reform. These projects will improve the health of hundreds of thousands of poor people in Shillong and Gangtok. A five-year, $18.5 million HIV prevention and care project is also planned to combat the spread of HIV/AIDS in vulnerable communities in four states. Some 800,000 poor children currently out of school are expected to start school as a result of a second phase of an Australian supported project, which commences in 2002-03.

Sri Lanka

Country program estimate $6.1 million
Estimated other flows $5.3 million
Estimated total aid flows $11.4 million

Australia's program to Sri Lanka supports the capacity of the government to deliver improved services, focusing on environmental management, health and community resettlement activities in support of the peace process. Australia is supporting vulnerable communities in conflict-affected areas through landmine awareness and clearance, and income generation, education and health programs. Australia is also providing these communities with access to clean drinking water, sanitation and low cost housing. The Sri Lanka-Australia Natural Resource Management project will use Australian expertise to improve the lives and incomes of up to 5,000 impoverished villagers in Sri Lanka's dry zone.

Nepal

Country program estimate $6.0 million
Estimated other flows $1.8 million
Estimated total aid flows $7.8 million

Australian assistance to Nepal works towards alleviating poverty by supporting the community management of natural resources and by developing human capital through the provision of scholarships.

Pakistan

Country program estimate $3.0 million
Estimated other flows $1.2 million
Estimated total aid flows $4.2 million

Australian assistance to Pakistan continues to increase access to quality primary education for girls in Balochistan, where adult female literacy is amongst the lowest in the world. It is also improving community management of salinity-affected agricultural lands in the Punjab. In 2002-03, Australia will fund the Fred Hollows Foundation to work with health officials to improve the delivery of affordable eye care in 20 districts.

Other South Asian countries

Country program estimate $4.0 million
Estimated other flows $2.1 million
Estimated total aid flows $6.1 million

In 2002-03, Australia will continue to provide assistance in the form of scholarships to students from the Maldives and Bhutan. Such scholarships help improve the capacity of these countries to deliver improved services.

Multi-country programs

In order to increase the effectiveness and efficiency of program delivery, Australia will support initiatives which address shared problems in the region by taking a regional approach. These include reducing the incidence of arsenic contamination of drinking water through applied research, and reducing poverty through the provision of microfinance. During 2002-03, a regional Training and Capacity Building Facility will be developed to address the urgent needs for human capital development in the region.

Africa and the Middle East

Regional overview of Africa and the Middle East

Africa Middle East
Program estimate $35.6 million $2.5 million
Estimated other flows $24.5 million $9.4 million
Estimated total aid flows $60.1 million $11.9 million

The development challenges facing Africa are enormous. Recurrent drought, food insecurity, illiteracy, poor health services and high rates of HIV/AIDS are often exacerbated by conflict, poor governance and a lack of social and economic investment. To help African countries meet these challenges, Australian aid will focus on governance, education and HIV/AIDS in southern Africa.

The HIV/AIDS epidemic is a major development challenge, with an estimated 28 million people living with HIV. Australia works with African governments and community groups through NGOs to care for those affected by HIV/AIDS and to strengthen the responses of governments, employers, researchers and communities.

Starting in 2002-03, Australia will assist the African Virtual University in Nairobi to provide greater access at lower cost to quality educational courses. This activity is part of Australia's cooperation with the World Bank within the Virtual Colombo Plan. The project will link an Australian and an African University to increase capacity in delivering business studies in Africa. It will include adaptation of Australian course materials in business studies as well as teaching capacity building and policy development.

Australia will also work with Denmark and the International Fund for Agricultural Development to support the development of an effective and sustainable Newcastle Disease control program in Mozambique, Malawi and Tanzania. Newcastle Disease wipes out entire chicken flocks with serious consequences for food security in vulnerable groups, particularly women.

In the Middle East, Australia continues to provide humanitarian assistance to the more than 3.5 million Palestinian refugees in the region.

South Africa

An estimated 1 in 9 (4.7 million) South Africans are living with HIV. Some 25 per cent of pregnant women attending antenatal clinics are HIV positive. Australian aid delivered by NGOs is helping to prevent the spread of the epidemic through education. Australia is also assisting communities to care for and provide support to HIV/AIDS sufferers.

Australia will continue to support capacity building of government agencies in South Africa. This will include a project commencing this year to help local governments enhance service delivery by improving their performance in financial management and coordination. The National Department of Agriculture will receive support for a land-care program and for implementation of a new vocational education system.

Local NGOs will continue to receive support to build the capacity of communities to combat gender violence and reduce poverty.

Mozambique

The Mozambique Australia Capacity Building Program will provide support for policy development in science, technology and tourism, and English language training for government officials. Australia will also work with the United Nations Development Programme (UNDP) on de-mining activities. Mozambican students have better access to tertiary education through scholarships both in Australia and in Mozambique.

Middle East

Australia's bilateral program to the Middle East will continue to address the urgent social and economic situation in the West Bank and Gaza, through the United Nations Relief and Works Agency (UNRWA) and Australian and local Palestinian NGOs. In 2002, a new initiative with NGOs will increase food security and self-sufficiency. Beneficiaries will include farmers and their families in the poorest region in Gaza.


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