The Impact of COVID-19 on Australian Foreign Aid to Southeast Asia and the Pacific

Abstract

Australia is not a generous international citizen: less than one cent of every dollar of federal spending is devoted to foreign aid (Development Policy Centre 2019). When Australia’s comparative affluence is taken into account Australia is an outlier, miserly even by the standards of the OECD (Wood 2017).

Nevertheless, its size and proximity ensure Australia dominates the aid landscape in the Pacific. In 2017, Australia gave nearly four times as much to the region as New Zealand, the second largest donor, and nearly five times as much as China. Aid matters in the Pacific. The region is home to nine of the world’s 15 most aid-dependent countries. In places, the value of aid is equivalent to nearly 50 per cent of all economic activity in some years. Even in less-dependent states like Papua New Guinea, aid often plays an important role in social spending (Lowy Institute 2019). Aid is less important in Southeast Asia, and Australia is less dominant. Even so, aid remains relevant in poorer parts of the region, particularly in times of crisis. In 2017, Australia was still the second largest OECD donor in the Philippines and third largest in Indonesia (Lowy Institute 2019; OECD2019).

In both Southeast Asia and the Pacific, Australian aid will have an important role to play as the COVID-19 emergency is felt amongst its neighbours. Will Australia be ready to play this role and will it play it well?