Australian Government, 2009‑10 Budget
Budget

Policy Statement on Australia's International Development Assistance

Why Australia Assists Developing Countries

Nations reflect the values, virtues and characteristics of their people.

Australia wants to be a good international citizen. That reflects a key Australian characteristic: a commitment to help people less fortunate than ourselves, a belief in a fair go for all.

Australians are motivated to extraordinary levels of generosity in times of both domestic crisis and when disaster strikes overseas and others face ongoing suffering. Australia's commitment to our international development assistance program reflects this aspect of the Australian character. We are, for example, committed to do our part to improve the lot of more than a billion people who still live in poverty.

Poverty is one of the greatest challenges of our time. We know that poverty not only blights the lives of individuals but contributes to national instability and conflict.

Australia's development assistance focus on poverty is guided by the Millennium Development Goals, the internationally agreed targets for poverty reduction, and by the aid program's objective to assist developing countries to reduce poverty and achieve sustainable development in line with Australia's national interest.

Australia's standing as a good international citizen, working regionally and internationally, is critical to promoting and advancing Australia's foreign policy and national interests.

A strong and effective aid program advances Australia's reputation and our influence in the international community.

The Prime Minister's First National Security Statement identified 'an international environment, particularly in the Asia‑Pacific region, that is stable, peaceful and prosperous' as one of Australia's key national security interests.

It is strongly in Australia's national interest to support stability and economic development in our region and throughout the world through assistance to the people and governments of developing countries.

Australia's location in the developing Asia-Pacific region, and the contribution of our aid program to the stability and economic progress of our near neighbours, means Australia's aid program is more closely aligned with our national interest than is the case for most developed countries.

Our aid program is not separate from our foreign policy. It is a crucial part of it.

Core Principles of Australia's Aid Program

The Australian Government has committed to increase Australia's official development assistance (ODA) to Gross National Income (GNI) ratio to 0.5 per cent by 2015‑16.

In doing so we are committing to an aid program that is stronger, more effective and in Australia's national interest.

The core principles of Australia's aid program are:

  • accelerating progress towards the Millennium Development Goals;
  • a recognition that while economic growth is the most powerful long‑term solution to poverty, economic growth will not, by itself, deliver fair and stable societies;
  • a strong emphasis on the Asia-Pacific, while also increasing our efforts in Africa and South Asia;
  • an emphasis on the power of education to promote development; and
  • a commitment to continue to improve effectiveness.

These principles will guide the aid program in delivering sustainable development gains.

The Millennium Development Goals

At the United Nations' Millennium Summit in September 2000, the nations of the world agreed on the eight Millennium Development Goals (MDGs).

The MDGs provide a focus for international efforts to reduce global poverty by 2015.

The goals include halving extreme poverty, getting all children into school, making women more equal, reducing child and maternal deaths and lives lost to HIV and malaria, and protecting the environment (see Diagram 1 on page 10).

The Australian Government is committed to the MDGs and has brought them to the centre of Australia's aid program.

Economic Growth

Economic growth remains the most powerful long-term solution to poverty. Australia's development assistance program will maintain strong support for activities that promote economic growth.

Generating jobs is a key to economic progress and the aid program will support increased employment opportunity and income generation in developing countries through investments in areas such as infrastructure, rural development, land reform and financing (including microfinance).

These investments, at the local level, support an environment where individuals and the private sector will be better able to take initiative, see the rewards of improved productivity and bring the fruits of their labour to markets.

Even in turbulent times, the global economy holds long-term opportunities. Our development efforts will focus on helping developing countries ensure that even their poorest citizens have access to these opportunities.

But improvements in economic growth alone are not enough. Economic prosperity can be fragile. Recent international shocks, including the global recession, demonstrate how economic growth can be easily reversed.

Australia has demonstrated economic resilience in the face of the current economic crisis. Our aid program has an important role in developing similar resilience in developing countries.

In the face of the global recession, the aid program will help developing countries respond, by supporting the most vulnerable and restoring progress towards the MDGs. In the longer term, the aid program helps to ensure that economic growth is translated into development that is accessible by all, fair and environmentally sustainable.

Evidence over the long-term has shown that economic integration with the global economy underpins durable development and allows countries to take better advantage of global growth. Australia will support developing country access to international markets and their capacity to negotiate better trade outcomes in the international arena as well as strengthening regional trade institutions.

Asia‑Pacific Focus

Australia will continue to focus its development efforts in the Asia‑Pacific region where we have special responsibilities and interests.

In Asia, development assistance deepens and diversifies our bilateral relationships as we support partner countries' development and poverty reduction plans.

In the Pacific, economic growth has been slow, several countries have failed to keep pace with growing populations and there are a number of fragile states.

Australia is committed to working in partnership with developing countries. Our new approach, Pacific Partnerships for Development, provides the model for the future.

The Pacific Partnerships for Development, launched by Prime Minister Rudd as part of the 2008 Port Moresby Declaration, mark a new era of cooperation with Pacific Island countries. They are a framework for Australia and its neighbours to commit jointly to achieving shared goals. They are based on principles of mutual respect and responsibility. The Partnerships help focus development efforts on achieving concrete outcomes within agreed timeframes. With developing countries in the lead, these new partnerships require commitments from all parties and a readiness to measure and report transparently on results.

Working in partnership means that increasingly Australia will work through, rather than alongside, different countries' own systems of government and service delivery.

This will involve changing the way we provide financial assistance and design and deliver programs, but in the longer term it will lead to stronger local capacity and ownership of the results.

Broadening the Geographic Scope

While the Asia-Pacific remains the geographic core of the program, our responsibilities do not end there. As we are serious in our commitment to realising the MDGs, we will engage more deeply in other regions.

Australia is committed to broadening and deepening our engagement in Africa. In view of the extreme poverty and need in many African countries and our growing economic, people-to-people and cultural links with the continent, Australia will contribute to development and economic progress in Africa.

In South Asia, India's growth is making progress in reducing poverty, but in other parts of the region threats to regional and global security are increasing alongside instability and poverty. For these reasons Australia is also enhancing our engagement in South Asia and we will continue our work in Afghanistan and Pakistan, where our aid program forms part of our wider security agenda.

The Power of Education

Unless we attend to the long-term skills development and capacity building of the people in the developing world, they will continue to face significant problems in generating and maintaining sufficient economic progress.

Education is one of the highest impact development measures. It is critical to the achievement of all the MDGs and to other development outcomes. Education enables people to participate actively in their societies, increases access to employment and other sources of income, and opens up opportunities. Education also delivers benefits down-stream in health, governance, productivity, gender equality and nation-building.

Education is a flagship sector of Australia's increased aid program and will become the program's largest sector with support extending from basic education to technical and vocational skills training and improving tertiary level qualifications.

Leadership is also critical to the success of development efforts: political leadership as well as community and technical leadership. The aid program will build upon Australia's 50-year history of providing scholarships by increasing the number of scholarship places available to strengthen the skills of leaders in developing countries. By building our relationships with leaders we can strengthen our partnerships with developing countries and help to foster the growth of durable institutions within those countries.

Effectiveness

It is essential that aid funding is used effectively to provide genuine improvements in people's lives. The gains must be durable, leading to an increase in the number of people lifted permanently out of poverty.

To achieve this, the world's poor need their most basic needs met while work continues to improve their long-term prospects and opportunities.

Development is a complex process. Government policies, national and international capacity, corruption, conflict, migration and private cash flows all have an impact on countries' development. To be effective the aid program must adapt to the circumstances in each country. This is particularly the case in fragile states where Australia delivers much of its aid.

Development is also a long‑term process and achieving lasting progress depends on the sustained commitment of developing country governments, donors, and civil society organisations. The creation of genuine partnerships with partner governments, with agreement on goals and the use and strengthening of their systems, will in the long term strengthen their ability to deliver to their own people.

Transparency and accountability are also critical. Australia will continue to publish comprehensive and detailed information about aid in a form that is easily accessible. Public reporting will build understanding of the aid program within the Australian community and help strengthen evidence-based policy and budget decision-making.

Key Themes

In addition to the core principles, other key themes of the aid program are:

  • a renewed commitment to food security and rural development;
  • health — the subject of three of the MDGs;
  • governance;
  • fair development accessible to all;
  • environmental sustainability;
  • a focus on multilateral engagement;
  • closer cooperation with Australian non-government organisations (NGOs); and
  • humanitarian assistance and disaster risk reduction.

Food Security and Rural Development

Even before the global recession, millions of the world's poorest people were being pushed deeper into poverty as a result of rising food prices.

Australia is committed to a comprehensive response to this issue.

One of many factors which has driven the increase in food prices is a decline in international investment, including in Australia, in agricultural productivity.

If the world is to continue to feed a growing population on a fixed or shrinking area of arable land then agricultural productivity must be increased.

Australia can and should lead this work, and through agencies such as the Australian Centre for International Agricultural Research we have a strong capacity to do so.

Rural development and food security will also be enhanced through measures to strengthen agricultural markets and to support communities to purchase sufficient food.

Health

Health is a prerequisite to development and poverty reduction. Poor health is both a cause and consequence of poverty and it is the focus of three MDGs.

Inadequate health services, poor sanitation and lack of access to water compound disadvantage and impede development.

Australia will support the wellbeing of the poor by focusing on areas such as maternal and child health, and providing sanitation and safe water. Weak health systems contribute to poor health outcomes, with women and children most affected.

Australia will also help to strengthen health systems to achieve better and long-lasting health impacts, leading to healthier and more productive lives.

Australia is committed to reducing the impact of disease, particularly HIV/AIDS, malaria and tuberculosis, and will support international efforts in prevention, treatment and care, particularly in high‑risk populations.

Governance

Good governance is critical to development. Most importantly, effective governance supports the rule of law and the delivery of basic services such as health and education.

The extent of Australia's engagement with fragile states increases the importance of governance within the aid program.

Capacity building forms an important part of Australia's approach to supporting effective governance. Helping to enhance the capacity of partner countries to manage their own affairs is central to Australia's development assistance efforts.

Governance programs will also support anti‑corruption measures and the development of leaders and civil society organisations in partner countries.

Fair Development Accessible to All

The Australian Government is committed to fair development: the benefits of development should be accessible and available to all.

This is a goal in itself, but a fairer society — particularly to the extent that women have the opportunity to fully participate in society — also advances development.

The aid program will have an ongoing focus on gender equality and on helping marginalised and disadvantaged groups. In particular, we will seek a balance between urban and rural development and, through the Development for All strategy, ensure people with a disability benefit from development gains.

Associated with the advancement of equity and wellbeing of all people, is the defence and promotion of human rights. Australia explicitly recognises the importance of human rights to development. Australia is committed to promoting and protecting human rights — civil, political, economic, social and cultural. Australia will advance human rights at all levels — through positive multilateral engagement, genuine bilateral partnerships, regional initiatives and support to civil society and NGOs.

Environmental Sustainability

The durability of development is linked with environmental sustainability. People living in poverty in developing countries are especially vulnerable to damaged environments.

The pace of development and urbanisation creates environmental pressures. Water resources are growing scarce, land is being degraded and some ecosystems are no longer able to support the demands of growing populations.

The adverse effects of climate change are a growing threat to global development and pose significant challenges for developing countries.

The Australian aid program will work with our bilateral partners and the international community to address issues such as climate change, deforestation, biodiversity and water and energy resources.

Commitment to Multilateral Engagement

In most cases Australia will work primarily with national governments to ensure our development activities have the committed support of those we assist.

Many development challenges, however, require global and coordinated responses and multilateral agencies often provide the most effective way to assist in responding to challenges such as humanitarian crises, addressing global disease threats and assisting people displaced by conflict.

Working strongly with these agencies is consistent with the commitment to multilateralism which is one of Australia's three foreign policy pillars.

For the Australian aid program this means increased engagement with other multilateral development organisations, including the United Nations, and with the multilateral development banks. This deeper engagement will be reflected in increases in financial support and a greater involvement in strengthening the effectiveness of the multilateral system.

The Government is also deepening its partnership with Australian NGOs and civil society organisations. This will increase the Australian community's involvement in our efforts to reduce poverty internationally.

Humanitarian Assistance

Natural disasters and conflict can have catastrophic impacts on development prospects. Developing countries are particularly vulnerable to the impact of these events as they have limited capability to respond.

Drawing on our own experience with natural disasters, Australia's good reputation in responding quickly and practically to humanitarian crises is well recognised.

The quality of Australia's humanitarian response will be maintained and further strengthened through work to develop Australia's own preparedness and response capabilities and to improve national and international approaches to disaster risk reduction, stabilisation, early recovery, peace building and the rule of law, state building in complex environments, and pandemic disease preparedness.

Australia will support international, local and Australian agencies with extensive experience in relief operations to prepare for and respond to disasters and other humanitarian emergencies.

Conclusion

There is a great deal to be done to achieve the Millennium Development Goals, which are at the centre of Australia's aid program. The global recession will only make this more difficult.

To work towards these goals and to lift more than a billion of the world's people out of poverty, Australia is committed to an aid program that is generous, effective and in our national interest — a program that is worthy of Australians' generosity and practicality and which enhances Australia's reputation as a good international citizen.

Diagram 1: Millennium Development Goals

The Millennium Development Goals (MDGs) are a set of global development objectives to be achieved by 2015 that were unanimously adopted at the United Nations Millennium Summit in September 2000. They represent an unprecedented global unifying force for reducing poverty and enhancing human development. Attainment of the eight individual goals is to be measured by progress against associated targets, developed during and since the Summit.

Eradicate extreme poverty and
hunger
  • Halve the proportion of people whose income is less than one dollar a day
  • Achieve full and productive employment and decent work for all, including women and young people
  • Halve the proportion of people who suffer from hunger
Achieve universal primary education
  • Ensure that children everywhere, boys and girls alike, complete a full course of primary schooling
Promote gender equality and empower women
  • Eliminate gender disparity in all levels of education
Reduce child mortality
  • Reduce by two thirds the under five mortality rate
Improve maternal health
  • Reduce by three quarters the maternal mortality ratio
  • Achieve universal access to reproductive health
Combat HIV/AIDS, malaria and other diseases
  • Halt and begin to reverse the spread of HIV/AIDS
  • Achieve universal access to treatment for HIV/AIDS for those who need it
  • Halt and begin to reverse the incidence of malaria and other major diseases
Ensure environmental sustainability
  • Integrate the principles of sustainable development into country policies and programs; reverse loss of environmental resources
  • Reduce biodiversity loss
  • Reduce by half the proportion of people without sustainable access to safe drinking water and basic sanitation
  • Achieve significant improvement in the lives of at least 100 million slum dwellers, by 2020
Develop a global partnership for development
  • Targets cover: trading and financial systems, the special development needs of disadvantaged states, debt sustainability, affordable access to essential drugs and access to information and communications technologies

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