Chapter Five: East Asia
| Estimated ODA to East Asia in 2006-07 | $713.4 million1 |
East Asia regional development indicators
Source: GNI per capita, World Development Indicators, World Bank, 2005; other indicators: Human Development Report, UNDP, 2005.
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The East Asian region has enjoyed strong economic growth and reductions in poverty levels. The percentage of people living on less than US$1 per day in East Asia dropped from 58 per cent in 1981 to 15 per cent in 2001. This trend continues, largely due to growth in China. Yet despite this progress, East Asia remains home to 585 million people living on less than US$2 per day; and many parts of the region, including the southern Philippines and eastern Indonesia, lack economic opportunities and suffer high poverty rates.
The region also faces numerous transnational threats to stability and security. HIV/AIDS, pandemics, transnational crime and the risk of terrorism add to the challenges of development arising from rapidly growing populations.
Australian aid to the Mekong region will focus on economic integration encompassing strong performers such as Vietnam as well as less developed countries such as Cambodia and Laos. As circumstances permit, Australia will look to improve the humanitarian situation in Burma. Australia will also assist East Timor to build the institutions and policies for the effective utilisation of future oil and gas revenues. The aid program with China will be based on shared priorities and focus on areas where Australia has skills and expertise, including in HIV/AIDS, clean energy, trade and managing transnational threats to development.
Diagram 10: Estimated Australian ODA to East Asia by country 2006-07
Note: Excludes total ODA to Indonesia.
Regional programs
| East Asia regional program estimate | $76.0 million |
Strengthening cooperation on transboundary threats
Australia will support regional initiatives to address and manage threats such as pandemics, disasters and transnational crime (including people smuggling, illegal fishing, drug trafficking and money laundering). These threats demand national as well as transnational responses.
Regional pandemics Australia is playing a leading role in developing a coordinated response to Avian Influenza in the Asia‑Pacific. At the APEC meeting in November 2005, the Prime Minister announced $100 million over four years for initiatives that combat the threat of pandemics and other emerging infectious diseases within the region. This new commitment includes significant new funding for 2006-07. These funds are in addition to the $41 million Australia has already committed since 2003 to combat Avian Influenza and other infectious diseases, which includes $15.5 million for Indonesia, $8 million for the Pacific and $3 million for Vietnam. Of the new funding, $90 million will be used to help regional economies and support organisations working to combat the threat of pandemics across the region, such as the World Health Organization, the Food and Agriculture Organization, the World Organisation for Animal Health and the World Bank. A further $10 million will be used for specific APEC activities on Avian influenza including a regional exercise to test communications networks and ensure preparedness, and the establishment of a register of health and disaster response experts. Australia's response to avian influenza focuses on partner countries in our region which have been affected by the disease, including Indonesia and Vietnam. Assistance will also be provided to develop stockpiles of protective equipment and medical supplies. Australia will continue to provide further funding for ASEAN's Emerging Infectious Diseases Programme, and for strengthened animal health surveillance and diagnostic capacity through the Australian Animal Health Laboratory. |
Australia provides a valuable contribution to addressing HIV/AIDS in the region. The threat of HIV/AIDS in Burma, Vietnam and China is being addressed through a $10.3 million commitment over four years. Australia's regional assistance will support the reduction of HIV-related harm associated with injecting drug use and strengthen national HIV policy making and programming.
Illicit drugs and human trafficking are growing problems which are closely linked to organised crime and corruption. Australia is providing $2 million to improve treatment for injecting drug users and establish a regional information management system for combating amphetamine type substances. This new commitment complements contributions to the UN Office on Drugs and Crime. Australia is also working with Laos, Burma, Cambodia and Thailand to combat human trafficking. Our assistance will expand to other countries in the region and look for opportunities to build partnerships through ASEAN.
Corruption is a major impediment to broad-based economic growth and poverty reduction. Australia will address this issue through further developing its anti-corruption strategy to encourage the rule of law, promote improved public sector management and strengthen civil society. Australia has committed $3 million over three years to support regional anti-corruption initiatives. Australia will also work with the World Bank to address corruption in natural resource management and infrastructure, and will support the OECD's Anti‑Corruption Initiative for the Asia-Pacific.
Promoting regional integration
In 2006-07, Australia will support studies on integration across Asia among the ASEAN+6 countries (including Australia, New Zealand, India, China, Japan and Korea). Support to ASEAN will also continue through a $2.7 million initiative focusing on the East ASEAN Growth Area. Through this initiative, the aid program will work with ASEAN, multilateral development banks and other key donors to pilot activities in regional security, private investment, infrastructure development and donor coordination, focusing particularly on development challenges in eastern Indonesia and the southern Philippines.
Australia will chair APEC in 2007 which will provide opportunities to engage partners on regional development priorities. Support will continue for the key role that APEC plays in the region through assisting its members to strengthen trade liberalisation, economic governance and financial and trade security.
Bilateral programs
Philippines
| Country program estimate | $56.6 million |
| Estimated other ODA | $12.2 million |
| Estimated total ODA | $68.8 million |
The Philippines is falling behind in international competitiveness, its governance remains weak and instability is a concern, particularly in the south. The public debt to GDP ratio is still around 100 per cent and a further deterioration in performance would have serious implications for the 46 per cent of the population who live on less than US$2 per day.
Australia will intensify efforts to promote development in the Philippines. Australia will build its analytical research and policy dialogue in areas such as conflict management, reconstruction and nation building. In 2006-07, Australia will lay the foundation for performance-based initiatives which will support health, education and infrastructure investments. Australia will also aim to improve infrastructure policy and stimulate infrastructure financing for development.
Australia's development cooperation program with the Philippines is currently built around three priorities: economic governance, security and stability and rural poverty in the southern Philippines.
Australia, through the provision of expertise and capacity building, continues to address key economic governance reforms in the Philippines including in fiscal reform, trade and private sector development. Australia is also working with the World Bank to address broader governance issues such as water and sanitation policy and land administration.
Education and training projects in poorer regions, especially in the south, remain a central focus. Australia is strengthening the quality of educational management and responding to local educational needs in Mindanao, especially those of minority and isolated communities. Australia will continue to support UNICEF programs and work to improve education outcomes in selected regions. Vocational and technical education will remain high priorities.
Australia will support activities to promote security and stability in the Philippines. The Government, through the Australian Federal Police, is building capacity within key Philippines law enforcement agencies to counter terrorism. Support is also being provided through the Department of Transport and Regional Services, and the Department of Immigration and Multicultural Affairs to improve port security and border control.
In Mindanao, Australia is the largest donor to the UN Multi-Donor Programme established in support of the 1996 peace accord between the Philippines Government and the Moro National Liberation Front. Support is also provided to the Mindanao Women's Commission, a key player in the peace process, in order to increase women's participation in conflict resolution and peace building.
Vietnam
| Country program estimate | $61.0 million |
| Estimated other ODA | $20.5 million |
| Estimated total ODA | $81.5 million |
Australia's aid program to Vietnam will seek to strengthen broad-based growth through improving private sector development and facilitating economic integration. Australia's development cooperation program supports Vietnam's Five Year Socio-Economic Development Plan 2006-10. Australia, as part of a new focus on enhanced partnerships with regional governments, is pursuing opportunities to work through Vietnamese government systems and engage sub-national institutions. Australia will increasingly harmonise its assistance with other donors. The aid program is also examining opportunities to support Vietnamese Government National Targeted Programs, such as the Socio-economic Development Program for Ethnic Minority and Remote Areas.
In recognition of persistent rural poverty, Australian aid seeks to improve livelihoods for the rural poor in the Mekong Delta and Central Coast regions. There, Australian efforts will concentrate on increasing rural productivity, assisting with disaster and flood mitigation and strengthening the capacity and accountability of provincial governments.
Map 3: The Greater Mekong Subregion
Source: GRi.D Communications Pty Ltd.
Assistance to the Greater Mekong Subregion Australia is strengthening its focus on the Mekong region to enhance integration and development prospects for vulnerable countries such as Cambodia and Laos. Strong trade flows with China are creating an economic growth zone in the Mekong. The Greater Mekong Subregion (GMS), comprising Vietnam, Cambodia, Laos, Burma, Thailand and southern China is one of the fastest growing subregions in the world. Real GDP in the GMS countries grew by at least 6 per cent in 2004. Exports from the subregion and investment flows to GMS countries have increased. Yet despite these improved economic circumstances, large numbers of poor continue to be locked out of broader gains, especially in rural areas. Australia is developing a program of subregional engagement in partnership with the ADB's Greater Mekong Sub-region Economic Cooperation Program. The program has extended US$1.4 billion in loans for 19 investment projects and $109 million of technical assistance since its inception in 1992. The program works with GMS countries to promote economic ties and infrastructure development primarily in energy, telecommunications and transport. Australian involvement beyond these areas is likely to focus on issues such as agricultural standards and trade facilitation, transboundary diseases, and sustainable use of energy resources. |
Cambodia
| Country program estimate | $25.3 million |
| Estimated other ODA | $23.2 million |
| Estimated total ODA | $48.5 million |
Australia's strategy for development cooperation with Cambodia has three themes: strengthening the rule of law, increasing the productivity and incomes of the rural poor (particularly in the agriculture sector) and reducing the vulnerability of the poor to natural disasters. Australia is a lead donor in the agriculture and rural development sectors. In the law and justice and agriculture sectors, Australia is designing new phases of programs to build on recent achievements.
Years after the cessation of conflict, land mines still threaten vulnerable populations. Australian funding to the Cambodian Mine Action Centre assists the clearing of landmines and helps reduce casualties. In July 2005, Australia announced a new commitment to mine action of $75 million over five years. Australia was one of the original signatories of the Ottawa Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and on their Destruction. Australia is serving as President of the Convention in 2006.
East Timor
| Country program estimate | $30.3 million |
| Estimated other ODA | $13.3 million |
| Estimated total ODA | $43.6 million |
On 12 January 2006, Australia and East Timor signed a treaty establishing a framework for exploitation of Timor Sea oil and gas reserves including equal sharing of future revenues. These revenues will deliver significant new financial resources for the development of one of our closest neighbours.
Australia will assist East Timor to build appropriate institutions and policies for the efficient use of these new revenues. Australia will support effective and accountable planning, budgeting and expenditure management (including at the district level), and work to improve broader public sector management.
In support of stability and prosperity, Australia will continue to assist the Timor-Leste National Police Force through a joint program between AusAID and the AFP. Australia will also assist the justice sector and support accountability and oversight mechanisms including the Parliament and the nation's electoral system.
Australian support to improve delivery of basic services in East Timor will continue. This includes assistance for strengthened rural water supply and sanitation, with an emphasis on environmental health, better health sector management and improved food security.
China
| Country program estimate | $35.0 million |
| Estimated other ODA | $6.8 million |
| Estimated total ODA | $41.8 million |
China has experienced annual economic growth in excess of 9 per cent since 2003, and is expected to continue growing at around 8 per cent per year to 2010. This growth is accompanied by expanding foreign trade and investment. While many economic indicators are improving, growing inequalities within China, environmental degradation and remaining core poverty impede sustainable long-term development.
China is of great strategic importance to Australia and is instrumental in the region's development. The aid program will focus on shared priorities where Australia has particular expertise. Australia will implement a new China‑Australia Country Program Strategy 2006-2010 which supports priority sectors: governance, environment and health. Institutional linkages will also be pursued and Australia will work with China to address regional development challenges such as HIV/AIDS and water resource management.
Other East Asian countries
Australia will assist Laos to build human capital by improving access to education and supporting the application of new skills and knowledge. Australia will strengthen the enabling environment for private sector development and promote regional integration. The vulnerability of the poor is being addressed through mitigating the impact of natural disasters, and reducing the danger of unexploded ordnance through de‑mining programs.
The humanitarian situation in Burma continues to decline, particularly with respect to communities in border areas. Australia will continue to focus on providing basic humanitarian support through the International Committee of the Red Cross (ICRC), and UN and NGO bodies. Work to minimise the spread of HIV/AIDS will be carried out in partnership with other key donors.
Australian aid to Thailand is being reduced reflecting Thailand's economic development. Future assistance will be implemented largely through the Public Sector Linkages Program.
Assistance to Mongolia will seek to improve performance in selected government agencies, and provide scholarships to strengthen people-to-people links and build expertise for long-term development.
1 Includes total ODA to Indonesia.