Australian aid
Devpol’s annual Australasian Aid and International Development (AID) Conference has sold out for another year. The conference, delivered in partnership with The Asia Foundation, will take place on 3-5 December and feature four pre-conference events (no registration required), five keynote speakers, and 36 concurrent panels. The 3-Minute Aid Pitch will close the conference. The full program and conference app link can be found on the conference website and selected sessions will be livestreamed on Devpolicy’s YouTube channel.
At the UN climate summit in Baku, Azerbaijan, the Australian government announced several climate financing initiatives. Some will show up in the aid budget and others are “off-budget”. The aid measures include a grant contribution of $50 million to the new UN Fund for responding to Loss and Damage, the “repurposing” of a further $50 million from the former government’s regional carbon offset scheme to support the Pacific’s energy transition, and $75 million (unspecified) mix of loans and grants for off-grid and community scale renewable energy projects in the Pacific.
The government also announced the provision of up to US$200 million in loan guarantees to support additional Asian Development Bank lending for climate change and $126 million in private sector loans, equity and guarantees for climate-focused businesses in the region through DFAT’s private sector financing vehicle, Australian Development Investments. Climate change and energy minister Chris Bowen has told the parliament that the cost to the Australian taxpayer of the agreements arising from the Baku summit (see below) is “zero”.
At the G20 leaders meeting in Brazil, the government pledged $63 million (US$41 million) to support the World Health Organization’s Investment Round for 2025-28. Prime Minister Anthony Albanese also signed Australia on to President Lula de Silva’s “Global Alliance Against Hunger and Poverty”. There was no financial commitment attached to this announcement.
The government has allocated a further $17 million to help address the famine and meet humanitarian needs in Sudan, the world’s largest hunger and displacement crisis.
Australia has committed $56.8 million to the new Towards Universal Sexual and Reproductive Health and Rights in the Indo-Pacific program, focused on Southeast Asia. Long-term partners the United Nations Population Fund, the International Planned Parenthood Federation, Marie Stopes International and UNICEF will facilitate outreach and digital health services, boost community awareness, support government initiatives and strengthen capacity to make data-informed policy decisions.
Speaking at the annual conference of the Australian Institute of International Affairs, Treasurer Jim Chalmers has confirmed that the government “is in the final stages of negotiations with ANZ to secure its continuing banking presence in the Pacific” and that “this will ensure ANZ’s nine existing operations – from Fiji to the Cook Islands – maintain their services”.
Addressing the same conference, the opposition’s departing foreign affairs spokesperson Simon Birmingham suggested that, should it win the next election, an incoming Coalition government would bring a greater focus on anti-corruption to Australia’s development assistance, aimed at preventing “elite capture” of recipient nations by other donors. He said: “we need to put even more effort into … capacity building across foreign governments to ensure that identification of corruption, identification of other problems within how aid moneys are transferred or handled is given greater frequency and attention in those nations”.
The Australian Government’s new International Disability Equity and Rights Strategy has, for the first time, set a target for performance on disability equity with a phased performance target of 60% of development and humanitarian investments performing effectively on disability equity by 2026, and 70% by 2030. Progress and achievement will be assessed through DFAT’s annual Investment Performance Reporting rounds.
Regional/global aid
The Lowy Institute’s latest Pacific Aid Map shows an overall decline in official development finance flows to the Pacific of 18% in the year following the COVID-19 pandemic of 2020-21. Excluding non-concessional finance, Official Development Assistance (ODA; “aid”) from most major bilateral donors, including Australia, fell in 2022 (Figure 1). China’s aid to the Pacific increased slightly. Beyond ODA, the proportion of development finance provided to the region in the form of non-concessional loans rose to a record high of 28% (US$1.2 billion) in 2022, despite growing concerns about debt sustainability in several Pacific countries.
After protracted negotiations, the Baku climate summit agreed to a new goal for developed countries to “take the lead” in providing at least US$300 billion in annual climate finance “from a wide variety of sources, public and private” to developing countries by 2035. This would replace the US$100 billion by 2020 goal, which was belatedly met in 2022. The agreement also includes a provision to triple outflows from multilateral climate funds by 2030, to US$5.2 billion and to count all climate finance channelled through multilateral development banks, not just that provided by developed countries.
Representatives of the least developed countries from the Pacific, Asia, Africa and the Caribbean characterised the last-minute deal as a “staggering betrayal”. It was well below the $US1.3 trillion advocated by many developing countries and environmental groups. This latter amount was referenced in the agreement, but as a combination of all sources of finance, domestic and international. Modelling from the Center for Global Development suggests that meeting the US$300 billion annual target by 2035 would require minimal fiscal effort from developed countries and, in the absence of clear language on new and additional finance and adaptation support, could further divert scarce development funding to climate change mitigation.
More countries have announced contributions to the 21st replenishment of the World Bank’s International Development Association (IDA) which provides concessional finance to the world’s poorest countries. The US (+14%), South Korea (+45%), and Spain (+40%) pledged increases relative to their contributions to IDA20. The final IDA21 pledging session, covering the 2026-2028 commitment period, will be hosted by South Korea in December. The status of the US pledge, which amounts to US$4 billion, remains uncertain as it will need to be approved by the next Congress, which will convene following the inauguration of president-elect Donald Trump in January. Australia’s IDA21 contribution has not been announced.
Notwithstanding its repeated concerns about restrictions on aid entering Gaza and escalating warnings of imminent famine in the north of the territory, the Biden administration has said it will not restrict arms transfers to Israel. President Biden condemned the International Criminal Court’s issuance of an arrest warrant for Prime Minister Benjamin Netanyahu and former defence minister Yoav Gallant on war crimes charges which include the use of starvation as a method of warfare.
UK civil society groups have strongly criticised the Labour government’s first aid budget, with aid expected to fall to 0.36% of gross national income once the costs of supporting refugees in the UK are deducted. They have welcomed, however, a UK government pledge to double its humanitarian assistance to famine-affected Sudan and neighbouring countries to £113 million.
Books, articles, reports, blogs, podcasts etc.
The latest Devpolicy Talks podcast features a discussion with Dr Sania Nishtar, the Chief Executive Officer of Gavi, the Vaccine Alliance, about the organisation’s financing model, how it assesses country eligibility, and its role in the Pacific.
In an article on Vox, experts from the US discuss what could be in store for foreign aid and global health under Trump 2.0.
The World Bank’s latest report on global poverty trends finds that almost 700 million people (8.5% of the global population) now live in extreme poverty (less than US$2.15 per day) and that “progress has stalled amid low growth, setbacks due to COVID-19, and increased fragility. Poverty rates in low-income countries are higher than before the pandemic”.
The UK-based Institute of Development Studies has released a new series of papers on “re-imagining social protection”, including case studies from Africa, the Arab region, and South and Southeast Asia.
