Australian Aid in the South Pacific

During the Indonesian-Australian death row saga, Prime Minister Tony Abbott brought up the fact that Australia has in the past contributed vast amounts of money to Indonesia. He did this with the hope that somehow this would cause Indonesia to remember how good a friend Australia has been (despite our rocky diplomatic past), and rethink its strict domestic policy regarding drug smugglers. Or at least make an exception to this policy to grant clemency to the two Australian citizens on death row.

This statement was received poorly in both countries, and it is obvious that whatever the outcome, Australia’s history of aid to Indonesia will have no bearing on the decision. This is due to a complex domestic political situation in Indonesia where Indonesian President Joko Widodo has painted himself into a corner by being so vocally against clemency for serious drug criminals, which in turn has lead to a boost in approval ratings in response to his strict approach. There is also a danger that by excusing only the Australians, Indonesia would attract even more negative foreign pressure from other countries with nationals on the Indonesian death row.

These events show that Australia should perhaps rethink its use of foreign aid as a tool of foreign policy. The slashing of Australia’s foreign aid budget in 2014, coupled with recent talk of additional cuts, indicates that the government is thinking along these lines too.

In mid-2013 AusAID was merged with DFAT (much to the dismay of AusAID’s graduate applicants). Aid moneys are now officially a part of DFAT’s toolbox. It is true that there are internal cost savings to be had from merging the organisations, but if there is no significant benefit to Australian foreign policy outcomes, is it really appropriate for a Department whose job it is to seek foreign influence, to administer what is essentially an altruistic activity? This is not to undermine the excellent work that Australian aid has done in the region; communities have drinking water, healthcare and schools where they previously did not.

Australia achieves national security and foreign policy interests by having economically and politically stable neighbours in Asia and the South Pacific, and the supply of aid can help to achieve this. However if Australia’s objective has been the obtainment of soft power and influence in aid recipients’ foreign and domestic policy decisions through aid money, then Australia appears to have failed, at least in the case of Indonesia. Furthermore, the Australian Consular-General in Fiji has previously been ejected for allegedly interfering in domestic politics, and similar complaints have also emerged in the Solomon Islands.

Australia attaches conditions to its aid money, requiring that certain steps be taken in accordance with receipt. This “tied-aid” creates obligations upon the recipient, which is contrary to the objective of increasing Australian influence, as these obligations negatively highlight the obvious power imbalance between the two countries. The implication is that Australia is rich and powerful, and that the recipient country is poor, and must do as Australia says. This sort of relationship does not build mutual respect.

Moreover, If Australia is seeking political clout, the method currently employed is undermined by other nations. For example, China and Taiwan, in order to cultivate influence, simply give condition-free aid to countries via selected influential decision-makers. Fiji’s quick substitution of Australia for China in the aftermath of the 2006 coup, despite years of developmental assistance, serves as a stark reminder of these limitations.

The national security approach to aid is that economically secure countries present a lower indirect risk to Australia. This is because public institutions such as law enforcement are better-funded, and there is less economic incentive for people to get involved with illegal activities. This then lowers the risk of drug smugglers, arms importers or terror cells operating within Australia’s immediate region and affecting Australian citizens. It is true that provision of aid to the region has not created economically self-sufficient states, and the more realistic picture is that Australian aid crucially assists communities and projects that remain dependent on continued aid funding. However the effect is stabilisation to some extent, and the ability for Australian institutions, especially police intelligence, to discourage criminal activity.

The point of this article is not to say that we should diminish our aid to the Asia-Pacific in any way. It is to say that we should learn our lesson from the past decade and accept that although our aid money achieves humanitarian outcomes and lowers the presence of transnational crime, it does not effectively achieve diplomatic heft. We need to rethink where we send our aid in order to maximise the outcomes that aid is actually able to achieve, given the realities of our region.


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