Australian Government, 2007–08 Budget

Country and Regional Programs

Indonesia and East Asia

The key development challenges facing Asia are in sustaining and sharing growth and managing risks. To sustain growth, development efforts will need to focus on overcoming infrastructure constraints, advancing microeconomic reform, strengthening markets and building human capital. Countries will also need to manage critical environmental challenges. To share growth, the lagging regions will need to be supported, and income gains translated into better health and education outcomes. Asia also faces the need to actively manage a wide range of risks, from pandemics to human trafficking and the threat of terrorism.

In large Asian economies, Australian aid plays a strategic role, providing targeted aid to help partners address their central challenges. Key development indicators for partner countries in Asia are shown below, and details of Australia's approach, including major new and ongoing assistance by country and regional programs are provided in Table 3.

Key development indicators for partner countries in Asia

Country GNI per capita
($US)
Access to water
(% of population)
Life expectancy
(years)
Adult literacy rate
(% of population)
Indonesia 1,280 77 67 90
Vietnam 620 85 71 90
Cambodia 380 41 57 74
Laos 440 51 55 69
East Timor 750 58 56 59
Burma na 78 61 90
Philippines 1,300 85 71 93
China 1,740 77 72 91
Mongolia 690 62 65 98

Sources: Human Development Report 2006, UNDP, and for † World Development Indicators Online, World Bank, 2007.

Estimated ODA to Indonesia and East Asia in 2007-08 $970.4 million4

Table 3: Aid to Indonesia and East Asia in 2007-08

Country/Program
Estimate 2007-08 ($m)
Focus

Indonesia
Country Program:
179.1
AIPRD:
232.5
Total ODA: 458.8

In 2007-08, assistance to Indonesia will be augmented by major new initiatives in the health, education and infrastructure sectors as well as a strengthened focus on anti-corruption and aid effectiveness. Assistance to Indonesia will focus on:

Increasing and sustaining economic management and growth, by strengthening economic and financial governance and financing essential public infrastructure. This includes continuing improvements to the condition of national road networks in eastern Indonesia using $328 million in loan and grant funds (over 2006-11) under the Australia-Indonesia Partnership for Reconstruction and Development (AIPRD)

Supporting the transition to democracy by helping Indonesia build strong democratic institutions and supporting participation in the democratic process. A Legal Development Facility ($22 million over 2005-09) will continue working with Indonesian agencies, legal and judicial institutions, and human rights-focused civil society organisations to support Indonesia's evolving legal and human rights reform agenda

Enhancing human security and stability through assistance to build strong disaster planning and response agencies and enhancing capacity to deal effectively with communicable diseases such as avian influenza and HIV/AIDS. A $30 million program over 2006-08 will continue working with local authorities and communities to assist reconstruction efforts in areas of Central Java affected by the May 2006 earthquake

Increasing the accessibility and quality of basic social services, particularly in eastern Indonesia. A major basic education program, augmented by new funding through the Delivering Better Education initiative (Box 7), will continue constructing and rehabilitating school facilities in poor, under-serviced districts, and improving education quality through teacher training and improved education management.

Philippines
Country Program: 89.9
Total ODA:
100.6

Under a new country strategy, Australian support in 2007-08 will focus on three pillars:

Economic growth, through better national-level budget and public expenditure management including the roll-out to line agencies of performance-based budgeting systems, and through improved management of the business practices for expanding government infrastructure investments including through public private partnerships. At the provincial and municipal level this will include a program to upgrade and maintain local roads and promote rural enterprise development

Basic education, with new work supporting system-wide improvements to better manage the increasing resources available for basic education, and more funding to improve the availability and quality of education for children in Mindanao and the Visayas

National stability and human security, under which programs will continue supporting peace-building in Mindanao by encouraging broad community participation in formal peace processes and better health, education and economic opportunities for conflict-affected populations. Practical assistance from Australian Government agencies will also improve the functioning of law and justice and border management institutions particularly to counter threats from transnational crime.

Vietnam
Country Program: 73.7
Total ODA:
90.8

Assistance to Vietnam in 2007-08 will focus on:

Strengthening the governance of the institutions required for a competitive market economy, through expansion of an existing performance incentives arrangement, and help for Vietnam to develop and deliver an action plan to strengthen legal and institutional foundations necessary for WTO membership while supporting vulnerable groups in this process

Improving livelihoods of the rural poor, through helping improve the impact of Government of Vietnam poverty reduction programs targeted at the poorest communities and ethnic minorities by: improving agricultural production; livelihoods; and developing infrastructure such as water supply and sanitation facilities. Assistance will also continue to help vulnerable communities prepare and implement disaster mitigation strategies.

Cambodia
Country Program:
33.0
Total ODA: 54.0

Assistance to Cambodia in 2007-08 will focus on:

Strengthening the rule of law, including commencing a new phase of support for the criminal justice system that builds an integrated approach to working with police, courts and prisons, and strengthen linkages with the community. Assistance will also focus on strengthening democratic processes in the lead up to national elections in 2008

Increasing the productivity and incomes of the rural poor, through a major new activity to improve value adding in agribusiness. This support to vulnerable communities will be complemented by ongoing assistance in mine clearance that helps transform mined areas into productive farmlands

Improving health service delivery, through new Australian involvement in the health sector from 2007-08, expanding a multi-donor initiative aimed at strengthening Cambodia's ability to plan and deliver health services. This coordinated approach to supporting the health sector brings together national and donor programs to improve policy and budget coordination.

Laos
Country Program: 15.0
Total ODA: 27.2

Assistance in Laos in 2007-08 will focus on:

Improving education, through increased support to strengthen planning and management of schools and improve teaching quality. Continued attention will be given to increasing access to education by girls and ethnic minorities

Supporting integration into the international economy, through leading donor efforts to support Laos to include trade priorities in national strategies and to build Lao Government capacity to formulate trade policies, to negotiate trade agreements, and to address obstacles to responding to new market access opportunities

Reducing the vulnerability of the poor to natural disasters and the threat from unexploded ordnance, through partnerships with the Lao Government, multilateral agencies and community groups to improve risk education, increase clearance of unexploded ordnance, and help rehabilitate landmine survivors.

Mekong Sub-Region

Through a new sub-region program for the Mekong, Australia will address infrastructure constraints to development through the Infrastructure for Growth initiative (Box 1), including improving market access for poor farmers through upgrading connections to transport corridors; improving border crossing procedures to promote intra-regional trade, and improving management and sharing of Mekong River water resources between the four Mekong countries through a partnership with the Mekong River Commission.

East Timor
Country Program:
54.0
Total ODA: 72.8

Australian assistance will focus on:

Building a functional and effective state, through continuing to strengthen key justice institutions including the police service, and continuing to assist democratic institutions (parliament, media and civil society). Australia will work with the UN to support the running of the 2007 national elections

Strengthening economic development and management, through continuing to support more effective budget execution on infrastructure projects, and assisting in management of the public sector to implement policies that promote economic growth and income generating opportunities

Improving delivery of services, including partnering with the World Bank to strengthen health services, commencing investment in a new five-year $30 million Rural Water Supply and Sanitation Program, expanding employment opportunities for youth through technical and vocational education, and continuing assistance to improve food security and agricultural production.

Burma
Total ODA:
14.0

Guided by a new Framework for Humanitarian Assistance to Burma 2007-2010, continued support through UN agencies and international NGOs will focus on meeting the health, livelihood and protection needs of vulnerable populations within Burma and on the Thai-Burma border.

East Asia Regional
Regional Program:
125.8

Assistance will encourage regional approaches to address transboundary threats, including continuing to:

Combat the threat of pandemics and emerging infectious diseases such as avian influenza through continuing to implement the Prime Minister's commitment of $100 million over 4 years from 2006-07, focusing on strengthening planning, prevention and response capacities and underlying systems for animal and human health in the region. Australian funding is supporting regional coordination mechanisms, enhancing surveillance and diagnostic capabilities, and raising community-level awareness

Address HIV/AIDS through an HIV/AIDS Asian Regional Program of up to $65 million over eight years from April 2007. This program will expand a successful current program to reduce HIV-related harm associated with drug use in the region

Address people trafficking through the Asia Regional Trafficking in Persons Project ($21 million over five years) that promotes more coordinated approaches to people trafficking within and across criminal justice systems in Southeast Asia

Support economic integration in Asia through continued assistance under the ASEAN-Australia Development Cooperation Program ($45 million over 2002-2008) to support economic policy research, partnerships with ASEAN institutions, and specific liberalisation and harmonisation projects.

China
Country Program:
30.0
Total ODA: 39.3

Australian aid to China reflects China's strategic and economic significance and will continue to engage on areas of mutual interest and priority, including governance (policy reform), environment (initially water management) and health (communicable diseases).

Mongolia
Total ODA: 4.9

Assistance emphasises scholarships to build a critical mass of influential senior officials, doubling the number of Development Scholarships from 14 to 28 over the next three years.

North Korea

Australia has continued to provide humanitarian assistance to North Korea although development assistance was suspended in 2002. Humanitarian assistance will continue to be delivered through international agencies. Any resumption of development assistance will depend on North Korea's adherence to agreements under the Six Party Talks arrangements.


4 Includes $458.8 million in total ODA to Indonesia. Estimated ODA to Southeast Asia in 2007-08 excluding ODA to Indonesia is $511.6 million.