AUSTRALIAN AID: PROMOTING GROWTH AND

STABILITY

A commitment to aid volume….

• Prime Minister’s announcement at UN Summit in September

– Doubling to $4 billion by 2010

– Conditional on strengthened governance, anti-corruption efforts and aid effectiveness

Outline of the White Paper

1) Introduction

2) Operating environment, values and interests

3) Strategic framework

4) Where Australia will work, and why

5) What the aid program will focus on

6) Strengthening effectiveness

7) Aid management

AUSTRALIAN AID: PROMOTING GROWTH AND STABILITY

Average annual GDP per capita growthin the Asia–Pacific region, 1995 to 2004

Operating Environment

• Major reductions in poverty in Asia Pacific• But….

– significant disparities between and within countries– existing challenges intensifying, new challenges emerging– high absolute number of poor– a region of developing countries, many are fragile (e.g.

Solomon Islands, PNG, East Timor), and Indonesia

Development lessons

• Economic growth central to poverty reduction• Countries that have integrated grow faster than

those that have not• Growth by itself not sufficient – needs to be

sustained and shared• Institutions matter• Each country’s path is different• Aid only small part of the development equation• Poor aid can do harm• Need new approaches to fragile states.

Strategic Framework

• Objective

• Asia Pacific focus

• Overarching principles of gender equality, fully untied aid and partnership

AUSTRALIAN AID: PROMOTING GROWTH AND STABILITY

Thematic Initiatives

• Growth – infrastructure : ideas and funding.• States - incentives for good performance up to 10% of total aid

budget over time. • People – major scaling up of health, focussing on women and

children, and education to get more children into school for longer and a better education. HIV/AIDS, pandemics, malaria.

• Regional stability – regional responses to transboundary threats.

Effectiveness

• Office of Development Effectiveness and Annual Review linked to budget cycle

• Output based aid• Country strategies covering all ODA,

performance frameworks and link to allocations• Anti-corruption• Australian engagement – research, linkages• Partners: delegated responsibility, leveraging

multilaterals

External communication is a critical function to support aid effectiveness

It does this in two main ways:1. As a critical component of development activities: to

inform, educate and assist in changing behaviour2. Informing taxpayers and aid recipients about our aid

program.

The risks of not communicating:1. Our aid is less effective2. We lose public support and therefore political support.

Conclusion

• Geographic flows: rebalancing to Asia from Pacific• Not just more aid • Different way of doing business for AusAID and other

Australian agencies• Greater focus on effectiveness, less contracting out• More rigorous approach to corruption• Greater use of partner government systems and

processes• Very different aid program and agency in 2010, more

effective, more transparent and more integrated.