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Rethinking the value of Australian aid

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Workers unload aid from an Royal Australian Air Force transport plane carrying donated aid for Myanmar's flood victims at Yangon international airport, 10 August 2015 (Photo: Reuters/Soe Zeya Tun).

In Brief

The tone of a foreign policy white paper sets the mood for how a government sees its position in the world and engages accordingly. While the Australian government’s recent Foreign Policy White Paper makes reference to the aid program being important in advancing a human rights agenda and achieving the UN’s Sustainable Development Goals, there is no suggestion that foreign aid can be an effective tool of soft power. The chapter on soft power omits bilateral aid as a strategic tool all together.


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While the White Paper sees ‘values’ as central to its soft power approach, they seem to sit in a vacuum and at odds with the aid program. The Paper anchors Australian values in a broad liberal agenda that seeks to uphold the rule of law, international law and other global norms. What the Paper lacks (and what would give Australia’s aid program real bite) is an additional recognition of and engagement with what are often referred to as ‘Asian’ or Confucian values.

Confucian values — with their focus on ethical humanism, virtuous and strong rule of the people as well as harmony in foreign relations (what some call the Singapore model or Confucian democracy) — are important for China and how it engages in the region.

The Australian position in the White Paper seems to emphasise a particular set of values and see differing value bases as threats rather than as opportunities for dialogue and effective regional engagement. Australia must rectify the ongoing ‘dialogue of the deaf’ when it comes to the region — in particular China — and its approach to foreign aid therein.

During the Cold War, for Australia and the West more broadly, foreign aid was part of a strategy of developing relationships to counter Soviet and Chinese communist influences while building strong diplomatic and trade relationships with friends and allies. Since the Cold War, the focus of Australian aid has been more on economic growth, regional stability, supporting Australian industry links to the region and social responsibility.

For China, foreign aid has also been part of its geopolitical strategic mix since the 1950s. Former Chinese premier Zhou Enlai promoted peaceful coexistence and an approach to economic aid that centred on mutual benefit and solidarity through his eight principles. These continue to be the guiding frameworks for China’s global engagement.

While Chinese foreign aid was important in building China’s role in the world in the latter half of the 20th century by providing the necessary support from the Global South, it is Xi Jinping’s Belt and Road Initiative (BRI) that has brought China’s earlier engagement to fruition. The BRI is not only an economic project to both absorb and transfer China’s excess industrial capacity, but also a geopolitical and cultural project in Central and West Asia.

The aid and development dimensions of the BRI are clear, but the proportion of grants to loans is not as large as China’s development assistance was in the past. This leads to the risk of recipient countries being dangerously indebted to China, and with China ending up owning key infrastructure resources. In some cases, these developing countries may become vassal states. Laos and Cambodia are current examples of countries that may be at risk of becoming dangerously dependent on China.

Australia has generally chosen not to engage its aid program with China beyond a joint malaria initiative in Papua New Guinea — the only tangible project from a memorandum of understanding (MoU) signed in 2013 on development cooperation. And Australia’s response to the BRI has been to see it as a threat rather than as the development opportunity it presents.

The most recent independent review of the Australian aid program points to a paradigm of prioritising economic growth as a path to meet the humanitarian objective of reducing poverty. It may be time to revisit the Jackson Committee report of 1984 on Australian aid, which outlined a ‘triple mandate’ of humanitarian, strategic and commercial goals. While the report was criticised at the time for its focus on a multiple mandate, the dismal reference to the aid program in the 2017 Foreign Policy White Paper suggests that the strategic imperative of having a strong aid program may need to be revisited.

What a more strategic focus on aid would mean is bilateral discussions with partner countries that focus on the strategic development context for that country as well as Australia’s own strategic interests.

The tone of the conversation with Beijing also needs to be improved, with an emphasis on dialogue around shared values and proceeding from there in discussing what a rules-based order may look like in the region. This is the necessary first step to building a level of trust from which the current MoU can be expanded beyond health projects in Papua New Guinea to infrastructure and other projects in key BRI countries. A focus on the gender and environmental impacts are areas in which Australia can add value. This strategic focus should go well beyond the Pacific to include ASEAN and South Asia at a minimum.

The challenge for the Australian government is to broaden the approach of the White Paper and to use aid to have open conversations with China about differing but often complementary values, and how they can be used to promote economic and social development in the region, while at the same time providing financial alternatives to the BRI in how partner countries’ economic and social development can proceed.

Patrick Kilby is a Senior Lecturer in the College of Arts and Social Sciences at The Australian National University and was an East West Center Fellow in 2017. He is the author of China and the US as Aid Donors: Past and Future Trajectories.

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