SEATTLE, Washington — Australia is the largest donor of foreign aid to the Pacific and a major donor to Southeast and East Asia. The most recent data shows that from 2011 to 2016, Australia accounted for 45% of all aid given to Pacific island countries. Currently, Australian foreign aid is being directed toward helping countries battle COVID-19. While the Pacific and Southeast Asia have not been hit as hard by the virus than other nations worldwide, they have suffered economically, which could drive millions into poverty. Here is how Australian foreign aid can help these countries battle the effects of the COVID-19 pandemic.
Partnerships for Recovery Plan
On June 1, the Australian government revealed its Partnerships for Recovery plan, which will provide $195 million in foreign aid to supply medical care equipment and stimulate economic recovery in the Indo-Pacific region. The project will specifically target the Pacific Islands, Indonesia and Timor-Leste. The Australian government noted that the Pacific Islands had faced severe economic shock due to the shutdown of global tourism.
Australia has provided necessary medical supplies and health expertise to the Pacific islands amid the spread of the pandemic. Australia has also helped governments in the Pacific establish public information campaigns to raise awareness of the virus. Many countries in the Pacific rely on Australian laboratories to test samples for COVID-19, due to a lack of adequate facilities for running tests domestically. These measures are part of Australia, New Zealand and the Pacific’s plan to resume tourism, as it constitutes a significant portion of the regional economy (20% to 30% in certain countries).
How Australian Foreign Aid in the Indo-Pacific Region Can Help the U.S.
The Pacific Islands are seen as a strategic priority for the United States, Australia and China, as establishing relations with countries in the Pacific guarantees access to important waterways connecting the Americas with Asia. In recent years, China has increased its aid to the Pacific, and some countries, such as the Solomon Islands, have turned to China as its main source of aid over Australia. The Partnerships for Recovery plan and Australian foreign aid, in general, will play an important role in securing relationships with countries in the Pacific to maintain access to waterways for Australia and the United States.
Australian foreign aid will also play an important role in maintaining the economic stability of key markets in Southeast Asia. Indonesia is currently the world’s fourth most populated country and on the brink of a possible economic collapse due to the global COVID-19 pandemic. Indonesia has limited economic resources and is simultaneously facing a public health crisis, putting stress on the government. Australian foreign aid will relieve some of this stress and help the Indonesian economy recover. Keeping Indonesia’s economy afloat is ideal for U.S. businesses, as Indonesia is a significant market.
Australia is a major global provider of foreign aid (ranked 13th globally by dollar amount), focusing particularly on the Pacific islands. The recently-introduced Partnerships for Recovery plan will help fight the effects of COVID-19 on the Indo-Pacific region that, despite low instances of the disease, suffer from reduced economic activity, most notably from tourism. Australia’s efforts also have ancillary benefits for the U.S. Their role in propping up Indonesia’s economy, which was ranked as the world’s 16th largest economy, will help stabilize the market for U.S. interests. Moreover, better relationships with the countries that provide access to key waterways for international trade can only help the U.S., particularly as it competes with China for dominance.
– Harry Yeung