Southern Cross University Lismore, Australia

Australia’s response to International Politics

“Critically explore Australia’s response to foreign aid.”

 by

Gisela Schneider

Table of Contents

Introduction  2

Critical evaluation of Australia’s response to foreign aid 3

Conclusion 10

References 11

INTRODUCTION

In an era of globalisation, the gap between rich and poor is growing. Mass poverty is still one of the most important economic and social problems. To reduce the existing inequalities, economic assistance of the richer countries is needed. This procedure is often part of the foreign policy of a country’s government and is called foreign aid or also official development assistance (ODA). It comes in a variety of forms like grants, loans, export credits or technical and military assistance and can be used for a variety of purposes. In June 1992, the world’s richest countries, including Australia, recognized at the Earth Summit in Rio that “poverty alleviation was crucial to global sustainable development” and therefore “reaffirmed their commitment to the United Nations (UN) [aid] target of 0.7 per cent Gross National Product (GNP)”¹. While the world’s richest countries steadily increase their wealth, aid to developing countries however declines. In 2000, the average of given aid was at about 0.24 per cent GNP whereat only Denmark, the Netherlands, Norway and Sweden met the UN target. One of the reasons for this development is certainly the fact that aid is rather used for economic purposes than devoted to the ethical and selfless commitment for direct poverty reduction in countries which need the money most. This fact and the incorrect allocation may be the reason that over the past fifty years the sum of $1 trillion in aid given to poor countries has mostly failed.² The purpose of this essay is to demonstrate the difference between what is actually happening and what, in my opinion, should be happening concerning Australia’s response to foreign aid. As said, Australia’s aid budget is not meeting the UN target. From a moral point of view, the country’s government therefore should spend a higher amount for development purposes, reallocate the distribution of aid and follow a framework of ethical principles. I will fortify this thesis with an overview of the countries past and actual approaches to development assistance programs, which are mainly shaped by a realistic mentality and therefore are seen as controversial. I will further focus on the countries biggest moral dilemma, the fact of the inseparability of human rights and economic interest which has essential influence on their distribution of aid. This is also connected to controversial debates raised in the national and international context, which will be evaluated under an ethical point of view.

CRITICAL EVALUATION OF AUSTRALIA’S RESPONSE TO FOREIGN AID

Australia’s aid program has, due to various influencing factors, undergone different changes in the last fifty years in the administration, its focus, the recipients and the type of aid provided. Due to the geographical proximity to the Asian region, their foreign aid program is, as will be shown in the following exposition, mainly influenced by political decisions regarding their neighbours. The Australian Government began with aid activities before World War II by supporting Papua New Guinea (PNG) with grants. According to Cowie (1987), their interest was mainly strategic, as they wanted to ensure that “no alien power could use the island as a base from which to threaten Australia”³. After World War II, Australia felt endangered by the fact that colonial powers in Asia disappeared and newly independent and politically unstable States emerged. In addition, China developed more power under a Communist government and Japan was, although disarmed at this time, furthermore considered dangerous with its expansionistic attitudes. This increased the country’s awareness of possible problems in that region which could affect Australia’s welfare. Therefore, they concentrated on stabilising the economy of new Asian nations through aid programs with focus on the survival of democracy, as one assumed that “unstable economic conditions would breed communism, which would in turn produce armed aggression”⁴. In 1950, the seven Foreign Ministers of the Commonwealth launched the Colombo Plan to help the low-income members of the British Commonwealth in Asia (India, Pakistan and Ceylon). They initially agreed in their plan that “wealthier nations of the world had a moral and humanitarian obligation to assist their less fortunate neighbours”. But considering the sphere of those times, there is little doubt that most of the supporters (which includes Australia) saw the plan as a means of countering communism and ensuring economic stability and peace in the region and not as a moral and humanitarian obligation. From the technical side, the Colombo Plan as a multilateral agency system gives bilateral assistance, meaning on a government-to-government basis at request of the recipient country. In 1951, the membership of the former seven countries expanded to twenty-four independent south or south-east-Asian nations to be helped. Aid became thereby no longer tied to member countries of the British Commonwealth. Australia played a big part in the plan and is directing – despite of tensions - most of its aid to Indonesia, which thereby became the second largest recipient of aid (apart from its aid to PNG) in the 1960’s until today.⁵ At this time, as more countries became fully independent in Asia, Australia began to rethink its foreign aid strategies favouring relationships based economic cooperation. Apart from the Colombo Plan it also began to cooperate with other development agencies. Australia provided in the 1970’s at about seven per cent of its aid budget to multilateral organizations of an overall amount of around 0.5 per cent of GNP. At this time it almost fulfilled the UN target of 0.7 per cent. This shows in relation to a statement of the Minister of foreign Affairs Andrew Peacock in 1976, the increasing awareness of the importance of foreign aid in combination with humanitarian considerations:

“Australia, like other Western-aid donors gives aid for a complex of reasons, with humanitarian considerations being paramount. My government believes it is the unquestionable right to be relieved of poverty and to have a decent standard of living. But in helping poor countries we are also to some extent helping ourselves. The gap between rich and poor countries has become one of the central issues of international relations. We consider that by pursuing an effective development assistance programme we are making a real contribution to peace and stable internal relations.”⁶ This statement has, like all political statements, to be seen critically as it is an Australian “party line” and used in the public as a justification for aid dispenses. An unsolvable question arising for me is, after having seen the behaviour of the Australian Government in the past twenty years, if there really was a change made in the program by concentrating on humanitarian aspects and relieving poverty: PNG and Indonesia are the two major countries receiving long-term aid from Australia and poverty is still present. A further interesting point is the helping

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1 ICVA, “The reality of aid – and independent review of international aid”, 1993, p.vi.
2 Kegley & Wittkopf, “World Politics. Trend and Transformation”, 2001, pp.162-163.
3 Cowie, “Asia and Australia in World affairs”, 1987, p.259.
4 Cowie, “Asia and Australia in World Affairs”, 1987, p.228.
5 Cowie, “Asia and Australia in World Affairs”, 1987, pp.271-272.
6 Cowie, “Asia and Australia in World Affairs”, 1987, p.274.