Australia Announces Major Adjustments to Foreign Aid Policy in Response to Indo-Pacific Challenges
Australia has unveiled a new foreign aid policy aimed at strengthening its influence in the Indo-Pacific region and countering China’s ambitions. The policy, announced for the first time in more than a decade, addresses the “tricky strategic environment” facing the region.
The new strategy, however, does not specifically mention China. It focuses on the growing economic challenges in the region, including the rising public debt in the Pacific. According to the newly published document, public debt in the region is expected to double between 2019 and 2025. China is currently credited with a fifth of the Pacific’s public debt.
Most of the external debt in the Pacific comes from multilateral institutions, with the Asian Development Bank being the main creditor. China holds 22% of the total external debt, followed by the World Bank, Australia, and Japan. Tonga, Samoa, and Vanuatu are among the countries with the largest debts to China, owing a total of US$1.6 billion (A$2.3 billion) in 2020.
In response to these challenges, Australia’s foreign aid budget for the 2023-24 financial year is set at A$4.7 billion. The federal government has pledged continued growth in the budget in the coming years. The new policy also emphasizes the importance of achieving the Sustainable Development Goals and includes objectives such as gender equality and climate change targets.
Federal Foreign Affairs Minister, Penny Wong, highlighted the Pacific’s interests and Australia’s ambitions in the region as the driving force behind the new aid framework. She stated that Australia would continue to support its neighbors in addressing climate change, promoting gender equality, and integrating Indigenous Australian perspectives into development work.
Australia’s Minister for International Development and the Pacific, Pat Conroy, noted that previous cuts to development aid had left a void in the Pacific that other countries filled. He emphasized the importance of Australia’s increased influence in the region, saying it would ensure stability and prosperity. Conroy acknowledged the geopolitical competition in the region without directly targeting China by name.
While Australia’s spending on foreign aid still lags behind other developed countries, Conroy emphasized the significance of how the money is spent rather than the total amount. He stressed the economic dividends of aid projects, including the infrastructure development and skills training provided to local workers.
The new aid policy aims to position Australia as the partner of choice in driving stability and prosperity in the Indo-Pacific region. As Australia adjusts its foreign aid strategy, it seeks to create a better world through targeted investments and collaboration with its neighboring countries.
Please note that this article is copyrighted by the Australian Broadcasting Corporation (ABC) and should be credited as “ABC Chinese” when reprinted.