Is 2012 AusAid Budget a Rationale Foreign Policy Choice?

By Francis Hualupmomi in China
The 2012 increase in Australian Aid Budget for PNG raises an interesting question: Is it a rational foreign policy choice?
In international relations, Aid is perceived as one of the most effective soft power foreign policy tools to win hearts and minds of people in a given state of interest by the big power. In this logic, Aid is designed and deployed to either weaken or to strengthen a state depending on the nature of the interest of donor. For instance, in some states in Africa, although there are continuous aid donations from former colonials yet development remains less progressive. This can also be said to PNG with AusAid. Aid therefore, is highly questionable in many developing countries.
According to Joanna McCarthy Australia will donate $520 million in Aid to PNG next year, making it the second biggest recipient. Development Policy Centre also noted that this will be an increase from $4.3bn in 2010-11 to $4.8bn in 2011-12–or from 0.33% to 0.35% of GNI (Gross National Income). Although Australia is still trailing behind other OECDs countries in Aid, it promised to continue increase the figure beyond 2012 given the positive prediction of economic growth from 2012-2016.
The focus of AusAid in PNG expressed in terms of its goals and objectives is to achieve Millennium Development Goals (MDGs) through good governance and reducing poverty focusing on strengthening health and education sectors. Whilst this may sound positive in PNG, whether it will be translated into tangible outcomes remain an issue and challenge.
This raises an important question, is AusAid a development tool or politically engineered foreign policy tool aimed at pursuing Australia’s own national interest in the region? These questions can help us calculate Canberra’s intent and motive and its policy implications behind increase in Aid. It is interesting to note that although the trend of Aid has increased annually PNG remains an undeveloped and often blended as a failed state since independence. If Australia’s Aid is generous why do PNG continue to experience development problems?
From observation, since independence with Australia’s development assistance under different political regimes nothing has really changed much in PNG’s development and modernization agenda. Socio-economic landscape remains worsening until recently given poor socio-economic such as health and education indicators, poor higher education socio-economic infrastructures, poor economic infrastructures, corruption, etc.
Moreover, with changes in geopolitical landscape in the Pacific region, especially with the rise of China and its influence in the region, Australia is caught in between the thin red lines. China’s presence and its influence has greatly affected the island nations especially PNG, Fiji and others through its soft power diplomacy. China is the second largest aid donor after Australia in the region. China offer soft or unconditional aid to finance development in the region. PNG is the biggest recipient of Chinese Aid. There is positive effect of Chinese Aid on PNG’s socio-economic development.
Politically, Australia is not only under pressure from Washington over Chinese regional influence but is worried and in fear that it is slowly loosing its peripheries in the region. This is the most immediate conundrum facing Australia in the region. This could suggest that Canberra’s increase in Aid is only a geopolitical competition against China in the region.
If this is the intent and motive behind the increase, this may have policy implications.
First, should PNG development situations continue to be positively affected by other donors than Australian Aid there could be a tendency of shift in policy behavior. There is a feeling of mistrust on Australia’s development assistance. Political leaders and elites may shift preferences to other donors such as China, EU, etc, should they perceive AusAid as an impediment to socio-economic development progress.
Second, history has shown that geostrategic competitions have structural implications in the economy. The more a state spends on relative strategic competitions there is a tendency of it to collapse. The economy might be affected increasing social chaos and poverty. The competition between US and Russia during Cold War shows that strategic competition, for instance, on Mutual Destructive Weapons led Russia to unwise spending on armaments and consequently its collapse.
Given this conundrum in Aid, what should Australia do? Australia should be mindful in playing Aid card in geopolitical competition. Australia should also consider how it could cooperate with other big important partners in aid diplomacy in the region. A cautious and constructive Aid management strategy is necessary to avoid clash of national interest. Should Australia is not careful enough this could be a waste of tax payers’ money and loosing of grip on its major conventional peripheries in the region.