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Australian Aid Policy

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M72 8 November 1976


Extract from an address by the Minister for Foreign Affairs, Mr Andrew Peacock, at Swinburne College, Melbourne, on Monday 8 November,

I turn to a subject which is of great interest to my Government, namely Australian aid to developing countries.

development assistance. We acknowledge Australia's responsibility to assist the economic and social development of Third World countries through the transfer to them of Australian resources and technology on highly concessional terms. Aid is a valuable supple ment to the crucial efforts of the developing countries themselves

We are determined to continue and to extend our overall aid.

a complex of reasons, with humanitarian considerations being paramount. My Government believes it is the unquestionable right of all human beings to be relieved of poverty and to have a decent standard of living, .

helping ourselves. The gap between rich and poor nations has become one of the central issues of international relations. We consider that by pursuing an effective, development assistance program we are making a real contribution to peace and to stable

international relations.

involving an opportunity dost to the Australian public, it must be considered along with other competing demands on the public purse in deciding annually how much we should spend on it. That the Government is. in earnest about foreign aid is shown by the

fact that even in this year of financial stringency Australia's expenditure on aid will increase by as much as 15 per cent to

Our Government has a very positive attitude to


Australia, like other Western aid donors, gives aid for

But in helping poor countries we are also to some extent

Since aid represents a real transfer of resources


around $400 million. Development assistance is one of the few items of government expenditure likely to,show an increase in real terms,

Australia has a reputation in the international community for being a generous aid donor whose assistance is also of the highest quality, Australian aid as a proportion of GNP is around 0.5 per cent which compares very favourably with the average of

other Western developed countries of 0,36 per cent. We shall continue to work towards the United Nations 1 target for official development assistance of 0,7 per cent.

Australia's geographic location as a 'Western' advanced economy in a region with extremely low GNP per capita, high population growth rates, low foreign exchange earnings and huge, debt servicing problems places a special responsibility on Australia to help its neighbours.

Thus, among its specific achievements since taking office, the Government has announced major increases in bilateral aid commitments to Papua New Guinea and South Pacific countries. Our commitment to Papua New Guinea guarantees that country at the very least $930 million over the five-year period commencing in

1976-77. I recently announced the Government's intention to commit a total amount of $60 million in bilateral aid to the countries of the South Pacific over the three-year period 1976-79. This is about four times what we spent in the previous three years. Australia has a special responsibility in relation to

this region. Our aid program will represent a substantial propor­ tion of the total external resources available to these countries which have few natural resources and small, fragile economies. In per capita terms Australian aid to them will be very high.

In addition, the Government has given Indonesia an assurance that Australia will allocate to that country not less than $86 million in aid over the next three years. This commitment, on a rolling basis, will facilitate forward planning by both the

Indonesian and Australian Governments,

Our commitment to the South Pacific is already on a rolling basis and we hope to direct our project aid budgeting into rolling programs. Since aid forms an essential part of the budgets of these countries, it is of enormous practical importance

to them to know with certainty what they can expect from Australia in the years ahead.

The fact that the main recipients of Australian aid are Papua New Guinea followed by Indonesia, the other ASEAN countries and countries of the South Pacific region, does not mean that we are not willing to give aid directly to needy countries in other parts of the world. Thus we intend to continue our bilateral programs in the Indian sub-continent, in Indo-China and elsewhere

in Asia. We also intend to help in Africa. While our programs in these regions will necessarily be much smaller than in our own


neighbourhood, that does not mean that our assistance is not impor­ tant to recipient countries. Indeed some of our most interesting new projects are in Africa, for example, the Magarini Arid Zone Development Scheme in Kenya. There we will be engaged in pioneerin

endeavours with the Kenyan Government to help establish an economic and social basis for the settlement of nomad peoples who currently have exceptionally low opportunities for economic advancement. Australian skills in the development of semi-arid lands are espe­ cially relevant in this project.

The basis of the bilateral aid program is extensive use of Australian resources (goods, know-how, training, consultancy services etc.) and it is important in terms of its impact, both in recipient countries, and in Australia, that what we supply should be identifiably Australian.

The Government is actively promoting involvement of the private sector in the aid program. As the program expands we will need to rely much more on the skills of the private sector in the implementation of our program, particularly in important

areas of development outside the public sector. For example, in relation to the South Pacific I recently announced our willingness to consider making grants to Island Governments to assist them to finance their share of joint ventures with Australian companies.

But I must emphasise that the purpose of Australian aid is to make an effective contribution to the economic and social . development of recipient countries. That is always our first consideration. Possible spin-offs for the Australian community

are very much of secondary concern in planning our aid.

Australia's high standing as an aid donor comes from the fact that recipient governments recognise that we are not selfishly concerned with Australian interests and because almost all of o u n aid (about 97 per cent) is given in grant form. However, a number of countries which receive Australian aid have now achieved

a level of economic development where they may be able to accept assistance in the form of concessional loans or trade credits without substantially increasing their debt burden. A detailed study is to be undertaken on the implications of, and criteria for,

the allocation of aid through these channels.

By far the greater proportion of our aid (about 85 per cent) is directed towards bilateral assistance essentially because Australia is a nation with special regional responsibilities. However, the Government is also co-operating fully with multilateral

agencies active in the development field. Through multilateral organisations Australia is able to play its part in assisting developing countries on a global basis. My Government will there­ fore at least maintain the present balance between bilateral and multilateral aid. Future decisions on specific proposals which may affect this balance will, of course, be taken on their merits.

Australian aid is of greatest benefit if it is concentrated on sectors that are critical to the development strategies of reci­ pients and where we are in a position to provide relevant assistance. In practical terms, this means, in most cases, an emphasis on the

rural sector. This emphasis will involve Australia in a wide range of activities including infrastructure development, agriculture, animal health and nutrition, education and employment creation generally. We are already making considerable progress in this direction with a number of large-scale development programs intended to bring about the balanced development of whole regions, for example in the Philippines, in Indonesia and in Fiji.

The Government has made a firm commitment to furthering equality of opportunity for women. Women in developing countries have special problems which should be taken into account in designing developmental projects. In cc-c-perati on with recipient governments, we are now ensuring that our Australian aid takes account of this

important consideration.

Australia recognises that in the long term, the world food shortage can only be overcome through increased agricultural production, within Third World countries, and the facilitation of international trade in essential food snuffs.

As already noted, our aid. program is very much concerned with helping recipients to increase production = At the same time, however, Australia provides significant amounts of short-term relief in the form of feed, aid, mostly wheat, which has the advan­

tage of great cost-effectiveness in nutritional terms. While wheat is acknowledged as one of the best, forms of food aid, Australia supplements it with other foodstuffs appropriate to Australia's capacity and the needs of recipients, particularly for their spe­ cialised food programs and in emergency situations. Some examples of these foods are skim milk powder-, a high-protein milk biscuit

specially developed by CSIRO, and canned meat.

Non-government organisations are well suited to undertaking valuable pregrams in developing countries which would involve high administrative costs if they were attempted by government or are not suitable activities for government = The Government is therefore

committed to continuing its financial support, for selected Austra­ lian non-government aid. organisations. In addition to the funds specifically provided in the Budget and in recognition of the special

role these organisations play in the South Pacific, I recently announced a special provision of $500,000 for the three years beginning 1976-77 to assist non-government organisations with the cost of development programs in. that region.

The effectiveness of our Australian aid is dependent on many factors, not the least being the professional skill and dedica­ tion of our aid administrators. Thus the Government has re­ affirmed that the functions previously vested in the Australian Development Assistance Agency will be transferred to an Australian Development Assistance Bureau being established within the Depart­ ment of Foreign Affairs.

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The last 30 years has seen Australia emerge as an affluent 'middle1 power fully conscious of her geographical loca­ tion and international responsibilities. Our development assis­ tance is one important means by which we give recognition to our moral obligation to help countries less fortunate than ourselves.

But in a world where the polarisation between rich and poor nations is becoming greater than ever, aid has also become a necessity in the fight for stability and international peace. Australia cannot afford to do less than it is now doing. In the years ahead the Government expects to do very much more.