Australian Government, 2010‑11 Budget
Budget

Australia's international development assistance program

The Australian Government is committed to providing aid to developing countries to help people less fortunate than ourselves and to improve the lives of the billion people worldwide who live in extreme poverty. Australia's development assistance program is guided by the MDGs, the internationally agreed targets for poverty reduction. The program aims to assist developing countries reduce poverty and achieve sustainable development, in line with Australia's national interest. Australia assists developing countries build stronger communities and more stable governments which improves Australia's economic and security interests. Australia is committed to scaling up the aid program to 0.5 per cent of GNI by 2015-16.

Intensifying progress towards the Millennium Development Goals

Overview

Progress towards the MDGs has slowed as a consequence of the global economic crisis. Global Gross Domestic Product (GDP) declined by 2.2 per cent in 2009.1 Developing countries were severely affected, with economic growth falling to 1.2 per cent in 2009 compared with 8.1 per cent in 2007.2 The World Bank estimates that an additional 64 million people will be living in extreme poverty (less than USD 1.25 a day) by the end of 2010 as a result of the global economic crisis.3

Developing countries more exposed to reductions in export revenue and remittances tended to suffer the biggest impacts. Other countries appeared to emerge relatively unscathed. The capacity of governments to respond to the crisis with fiscal stimulus measures varied significantly. For example, many Pacific Island Countries had less capacity to spend more on basic services.

Global recovery is now underway and major developing economies such as China, India, Indonesia and Vietnam are leading the way. The key challenge for the Australian aid program is how to regain momentum towards progressing the MDGs and build developing countries' long-term resilience.

Millennium Development Goals Summit 2010

The UN General Assembly will convene an MDG Summit in September 2010, with the primary objective of accelerating progress towards all MDGs by 2015.

Ten years on from the original adoption of the MDGs at the 2000 Millennium Summit, and despite remarkable progress in some countries, collectively developing countries are falling short of achieving the MDGs. This combined with the effects of the global economic and food crises and the impacts of climate change means that improvements in the lives of the poorest are happening at a slow pace, and in some countries, hard fought gains are being eroded.

The 2010 MDG Summit will focus on undertaking a comprehensive review of successes, best practices, lessons learned, gaps, challenges and actions for the way forward.4

While the nature of shocks varies, their very existence undermines development efforts and has a particularly negative impact on the livelihoods of the poor. For governments, the global economic crisis has resulted in significant declines in revenue, which impacts on the delivery of essential services. The ongoing vulnerability to shocks is a significant risk to development and the achievement of the MDGs.

To reduce poverty, a country's economy needs to grow. Shared and sustained economic growth and achieving the MDGs are mutually reinforcing. Economic growth creates jobs and incomes and generates revenues for governments to be invested back into communities, schools and health facilities. Health and education are themselves critical drivers of sustained economic growth.

Promoting shared and sustained economic growth is a central theme of Australia's aid program. Although recovery from the global economic crisis is underway, there remain challenges to progressing growth in developing countries. Australia is committed to intensifying support towards achieving the MDGs and assisting our developing country partners achieve sustained recovery.

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