Aid is necessary to build an environment where policies and infrastructure can be in place to support other sources of finance. Aid to developing countries is only a small proportion of the total level of external financing provided to them. International trade, foreign direct investment, debt forgiveness, remittances from citizens working overseas and domestic savings all contribute to the development of the country.
Why Australia gives aid
Australians value a fair go for all and so help people in need by contributing money, goods, personal time and knowledge.
The Australian Government’s overseas development assistance or aid program aims to promote Australia's national interests by promoting prosperity, reducing poverty and enhancing stability by strengthening private sector development and enabling human development.
The delivery of aid
The Australian Government works to deliver aid in partnership with country governments and international oganisations such as: the United Nations, business and government agencies, non-government organisations (NGOs) and volunteers.
- Bilateral aid – Aid given from the government of one country to the government of another country for long-term development. Australia works through the country’s own systems, helping to strengthen policy and programming as well as deliver aid.
- Multilateral aid – Aid given by the governments of many countries to international organisations such as the United Nations, specifically its World Food Programme, the World Bank and the Asian Development Bank for large-scale projects. This form of delivery helps Australia benefit from the organisations’ specialist expertise and extends its reach and impact.
- Scholarship programs – Australia Awards (which enables students from developing countries to study in Australia) and the Government’s new foreign policy initiative, the New Colombo Plan (which enables Australian students to study in the region).
- NGOs – Grants to accredited NGOs to deliver programs that address Australia's aid priorities.
- Community involvement – Engagement with Australian business, volunteer and academic research to better inform and strengthen programs.
- Infrastructure, trade facilitation and international competitiveness
- Agriculture, fisheries and water
- Effective governance: policies, institutions and functioning economies
- Education and health
- Building resilience: humanitarian assistance, disaster risk reduction and social protection
- Gender equality and empowering women and girls
The Australian Government is providing $5 billion in Official Development Assistance (ODA) in 2014–15, 0.29% of Gross National Income (GNI).
Australian aid is strongly focused on the Indo–Pacific region but it also has a strong commitment to Africa and South Asia. Programs outside the region, where other developed nations have primary responsibility, are being either phased out (e.g. in Latin America and the Caribbean) or scaled back (e.g. sub Saharan Africa).
The top ten countries for Australia Government aid in 2014–15 (in millions of dollars)
|Position||Country||Aid (millions $)|
|2||Papua New Guinea||502.1|
How Australians support overseas aid
In 2011–12 1.9 million Australians contributed a total of $871 million to NGOs for their overseas programs through regular and one-off donations, fundraisers and bequests. Of this 1.2 million Australian were regular donors supporting child sponsorship or other regular donor programs. Also, 45,751 volunteers contributed their time to the work of NGOs. In addition, 739 Australians were volunteering overseas with NGOs.
Making aid effective
Effective aid depends on the partnership between donors and recipients. Donors need to deliver sufficient and predictable aid without unrealistic conditions such as multiple forms of reporting or being tied to purchases from the donor countries. Recipients need good governance, to be able to address corruption, and adopt policies that sustain economic growth and improve human development. To be effective the aid program must adapt to the circumstances in each country.
Some factors which influence the effectiveness of aid are:
- a sound and stable policy framework
- an emphasis on social development
- enhanced participation by the local population, particularly by women
- good governance, transparency and accountability
- support for health, education, agriculture and public infrastructure development
- policies and practices that are environmentally sustainable
- a means of preventing and resolving conflict and fostering reconciliation.
Department of Foreign Affairs and Trade Australian Aid
Australian Council for International Development – Annual Report 2013