Overview and analysis
The White Paper identifies peaceful evolution of the Indo-Pacific as our most important objective. Australia’s aid program promotes our national interests and advances this objective by supporting our region to reduce poverty and become more stable, prosperous and resilient.
Why our aid program matters
The Indo-Pacific is home to a diverse set of countries facing a range of challenges. While fast-growing economies in Asia show great promise, many struggle to deliver the complex reforms required to maintain growth while also addressing inequality, pockets of deep poverty and widespread economic vulnerability. Other countries—particularly in the Pacific—are remote, have few options for diversifying their economies and face extreme environmental vulnerabilities. Our region is home to 40 per cent of the world’s natural disasters and 84 per cent of the world’s people who are affected by natural disasters.
Our aid investments are responsive and targeted to the country context. Our governance assistance supports partner governments to address policy and implementation challenges. We invest in building healthy and skilled populations which, with the necessary infrastructure and rules-based governance frameworks, can contribute to inclusive growth. We also invest in local disaster preparedness and climate change mitigation capabilities.
The aid program magnifies the influence Australia brings to bear on regional and global problems, including efforts to meet the 2030 Agenda and Sustainable Development Goals (SDGs). These include goals to reduce poverty and hunger, improve health and education, advance gender equality and strengthen economic growth. Leveraging all sources of finance for development, including private, is an essential part of delivering the 2030 Agenda.
Environmental and Social Safeguard Policy
In January the department released its Environmental and Social Safeguard Policy for the Aid Program. It outlines our approach to managing the environmental and social impacts of Australian aid investments, including that indigenous issues and relevant protections are considered in design, implementation and monitoring. The policy also enhances our ability to manage aid program risks; comply with Australian and partner government policies and laws for social and environmental protection; as well as improve the consistency, transparency and accountability of decisions. (dfat.gov.au/about-us/publications/Pages/environmental-social-safeguard-policy-for-the-aid-program.aspx).
Our performance in 2017-18
In 2017–18 we delivered an estimated $3.7 billion of official development assistance (ODA) and achieved strong results across all priority areas. We implemented aid investment plans for 25 country and regional programs in line with partner government priorities.
Overseas Development Assistance
The Performance of Australian Aid report for 2017–18 will be published in early 2019 and will provide comprehensive information on results across the program.
In March the OECD Development Assistance Committee released its peer review of Australia’s aid program. It recognised Australia’s advocacy for the interests of small island developing states in the Pacific region and provided a positive assessment of the aid program. It also highlighted our strong approach to gender and performance measurement.
The report made a number of recommendations, including on aid volume, the environment and climate change, the SDGs and our aid capability. These recommendations are being considered.
Our priority sectors
Our aid program has six policy priorities. We are working with partner governments to improve governance, education and health, and to enhance productivity in agriculture, fisheries and water. We have a strong focus on infrastructure and aid for trade, as trade drives growth and job creation. We promote gender equality, social and economic participation for the most disadvantaged, including women and girls, indigenous people and people with disability. We are building resilience through investments in humanitarian assistance, disaster risk reduction and social protection (see p. 105). Recognising that climate change poses a threat to development, we are increasingly tackling climate change across our aid program priorities (see p. 81).
The department provided an estimated $456.1 million during the year to help partner countries respond to health needs and strengthen regional health security (SDG 3: good health and well-being). We supported 30 medical teams to visit 11 Pacific countries where they conducted 2,543 medical consultations and 594 operations.
Our assistance helped improve and embed in government the functioning of the Health Equity Fund system in Cambodia. This system subsidises health care for the poorest Cambodians, with health care provided for 2.64 million cases in 2017, an increase of 340,000 from 2015. We also improved the skills and knowledge of 200 health workers, scientists and researchers across 18 provinces in Papua New Guinea, and strengthened laboratory systems, diagnosis and treatment in the fight against malaria.
In October the Minister for Foreign Affairs launched the $300 million Regional Health Security Initiative. This included establishing the Indo-Pacific Centre for Health Security. It will support research, strengthen partnerships and improve the capacity of regional health systems to help prevent epidemics, strengthen early detection and support rapid, effective responses to disease outbreaks.
Building human capital is essential for countries to realise their economic potential. We invested an estimated $654.2 million during the year to improve access to equitable, quality education (SDG 4: quality education), including scholarships. For example, in Kiribati we helped build a more capable and qualified workforce by investing in the Kiribati Institute of Technology and equipping students to take advantage of opportunities under Australia’s new Pacific Labour Scheme. Through Australia’s role on the Board of the Global Partnership for Education we helped establish the Multiplier Fund to leverage additional investment for education in 65 developing countries. Within six months of its rollout, the fund had unlocked an additional USD325 million for education.
We also invested an estimated $682.9 million during the year to improve the region’s governance. Better public policy, improved financial management and more accountable and transparent government helps create rules-based and stable investment environments. We supported Indonesia to improve business regulation and practices, making it easier for the private sector to grow. Improvements in the business environment helped Indonesia advance 19 places in the World Bank’s 2017 Ease of Doing Business rankings.
During the year we invested an estimated $593.1 million in infrastructure to improve the investment environment and leverage private sector funding (SDG 9: industry, innovation and infrastructure). For example, our membership of the Private Infrastructure Development Group harnessed Australian expertise to help deliver hydropower in Northern India.
We contributed an estimated $248.3 million for agriculture, fisheries and water by strengthening markets, improving productivity and promoting the sustainable use of resources (SDG 2: zero hunger and SDG 6: clean, water and sanitation). In Fiji we invested in storage depots for agricultural goods, as well as flood- and cyclone-proof shelters for seedlings. These initiatives help farmers replant damaged crops and get back to production faster.
Deputy Head of Mission, Pohnpei, Eliza Woolcock, and Senior Program Designer, Suzanne Gallen, at the Micronesian Women’s Conference in Majuro – funded by Australia’s Pacific Women Shaping Pacific Development Project [DFAT]
Across the aid program, we spent $1.3 billion1on investments that helped promote gender equality and women’s empowerment (SDG 5: gender equality). Gender equality remains a priority issue across the Indo-Pacific. For example, through the Australia–Indonesia Partnership for Gender Equality and Women’s Empowerment—better known as MAMPU—we have helped over 50,000 women to gain a voice through established community networks since 2014. These networks are pivotal in influencing government decisions that benefit women on a large scale. MAMPU local partners advocate for women’s issues at national and sub-national levels in almost 1,000 villages across Indonesia where three million women and girls live. Through Australia’s support, these women have not only gained access to essential government services, but are being empowered to act as agents of change themselves.
Our Gender Equality Fund ($55 million in 2017–18) continues to achieve results in the Indo-Pacific region in:
- enhancing women's voices in decision-making, leadership and peace-building
- promoting women's economic empowerment
- ending violence against women and girls.
The fund contributed to a Pacific Women Shaping Pacific Development investment of $40.9 million in 2017–18 ($16.5 million from the Gender Equality Fund) to support Pacific women into leadership roles at the community, provincial and national levels. This includes support, through the United Nations Women Markets for Change project, for over 400 women to join market vendor associations in Fiji, Solomon Islands and Vanuatu, helping them increase their bargaining power and influence how markets are managed and made safe.
Leveraging mutlilateral and private sector engagement
We worked closely with Treasury to secure in-principle agreement for Australia’s contribution to a USD13 billion capital increase at the World Bank, our largest multilateral development partner. This will significantly expand the bank’s lending power over the next decade. The World Bank President said the agreement amongst the 189 shareholders demonstrated confidence in global cooperation and the rules-based order.
Efforts are continuing to ensure the World Bank and Asian Development Bank (ADB) meet their commitment to increase financing to Pacific island countries. For example, we helped develop and implement World Bank and ADB projects to build new and better roads in Papua New Guinea, and to deliver new energy projects in Samoa, Solomon Islands and Tonga.
Our support for UNICEF, United Nations Women and the Office of the High Commissioner for Human Rights helped these organisations to continue work protecting and improving gender equality, children’s education and freedom of expression. We supported reform efforts that encourage United Nations agencies to work more collaboratively on sustainable development, humanitarian and economic programs.
The private sector is an essential partner. With the majority of the world’s capital under private control, engaging the private sector is key to promoting economic development. We collaborated with business in The Business Partnerships Platform to address challenges in the region. We initiated 10 new partnerships during the year, supported by $4.3 million and matched with $5.9 million from partners. These included projects in Sri Lanka where we partnered with Dialog Axiata and Ernst and Young to provide mobile savings and payment technology to rural villages in the north of the country.
The Australian NGO Cooperation Program provided an estimated $128.8 million to 57 NGOs to support more than 450 projects in over 50 countries during the year. These projects were across a range of sectors including education, health, water and sanitation, food security, civil society and economic development.
Australian Volunteers Program
Australian Aid: Friendship Grants
We are leveraging civil society’s skills, expertise and experience to increase the impact of our aid program and project a positive image of Australia in our region. For example, we collaborated with accredited Australian NGOs, Australian volunteers, and more than 100 community organisations across Australia to develop the $10 million Australian Aid: Friendship Grants program. These grants will support community organisations to expand and enhance international development activities in our region.
Aid program highlights
Detailed reporting against the performance framework, including individual program and investment performance, and multilateral replenishments, will be published annually in the Performance of Australian Aid report.
Report—Performance of Australian Aid
Program 1.2, p. 32
p. 33 Corporate Plan 2017–18
Achieving significant development results and demonstrated organisational effectiveness, including progress towards the strategic targets.
1. TOMAK—Farming for Prosperity
3. Aid for Trade
(achieving significant development results)
(progress against strategic targets)
PBS 2017-18 Program 1.2,p. 32
Program 1.3,p. 33
Corporate Plan 2017-18 p. 16
Aid program performance reports against country and regional program objectives.
Corporate Plan 2017-18, p. 15
Identify and report on the Annual Aid Evaluation Plan.
Corporate Plan 2017-18, p. 16
Ongoing review of progress on implementation measures for more effective and efficient aid program delivery.
Detailed reporting against the aid performance framework will be published annually in the Performance of Australian Aid report
Each year the department publishes a Performance of Australian Aid report as part of the aid program’s performance framework. This report:
- assesses performance and results
- reviews implementation progress for the government’s policy and performance framework
- updates progress towards strategic targets
- summarises the performance and results of country, regional and global aid programs
- examines performance across the six priority investment areas outlined in Australia’s aid program policy.
The fourth of these reports—Performance of Australian Aid 2016–17 (dfat.gov.au/about-us/publications/Pages/performance-of-australian-aid-2016-17.aspx)—was published in May 2018. The 2017–18 report will be published in early 2019.
These reports are quality assured by the department’s Office of Development Effectiveness and overseen by the Independent Evaluation Committee.
Achieving significant development results and demonstrated organisational effectiveness, including progress towards the strategic targets
Progress on meeting the strategic targets
Making Performance Count identified 10 strategic targets to ensure the aid program is well managed, achieving value for money and delivering on the key priorities outlined in the government’s aid policy: Australian aid: promoting prosperity, reducing poverty, enhancing stability.
To date nine of the 10 targets have been achieved. The target on increasing aid for trade investments to 20 per cent of the aid budget by 2020 was achieved ahead of its target date (see case study). With the release of the White Paper and achievement of nine targets to date, a review of the targets is being undertaken.
Strategic target 4: More than 80 per cent of investments, regardless of their objectives, will effectively address gender issues in their implementation
This strategic target tracks the integration of gender equality throughout the aid program. It measures the percentage of Australian aid investments that are effectively addressing gender equality issues each year during their implementation. This is assessed through satisfactory or above ratings in the annual aid quality check.
Meeting the target is challenging. With 2017–18 performance at 75 per cent, we fell short of the target because of persistent difficulties, including assessing external technical support for early and ongoing implementation and monitoring of commitments. This is particularly acute in complex macro policy and reform partnerships. Our desire to use local partners, or work in fragile and conflict-affected settings can limit the choice of partners with adequate gender equality capability.
We have initiated actions to improve performance on gender equality for new and existing investments. This action is endorsed and monitored by the department’s senior management.
Case study: TOMAK—Farming for Prosperity
Farmers in Bobonaro are improving their production of onions so more local onions are produced and sold in Timor-Leste [TOMAK/Lewti Hunghanfoo]
Timor-Leste has achieved significant progress since independence in 2002. The number of people living in poverty has fallen from 50 per cent in 2007 to 42 per cent in 2014. There are still major challenges, particularly in rural areas where most people live (75 per cent of the population or 137,000 households). Malnutrition is a serious problem, with stunting rates amongst the highest in the world. Seventy-five percent of rural households grow only enough to eat and have limited opportunity to earn an income from their farm.
We are improving nutrition, food security and commercial farming outcomes through our agriculture program To’os ba Moris Diak or Farming for Prosperity (TOMAK). TOMAK works with communities to stimulate demand for more diverse diets by improving nutrition-related knowledge. To improve commercial farming, TOMAK helps farmers increase production and sell their products. This work improves health outcomes and helps support more resilient households which can earn an income from the food they grow. There is a strong focus on gender and ensuring women benefit from the program.
TOMAK works closely with communities and households to help them understand nutrition and how to source a better diet. The program works through local partners to help people understand why a diverse and nutritious diet is important, and to encourage them to eat more healthily. TOMAK promotes household production of chicken, pigs and fish, and teaches people to establish home gardens. This helps households produce more nutritious food like leafy green vegetables, carrots, pumpkin, sweet potato and others. Improved food and seed storage techniques help reduce food losses and prevent disease.
TOMAK uses demonstration plots to trial and show better ways to grow crops that can make money and improve nutrition outcomes. Since TOMAK started in 2016, 64 demonstration plots have been set up, mainly showing how to grow shallots, red rice, mung beans and peanuts. Early results show that there have been higher yields, better quality and a more uniform harvest. This means less labour and fewer harvests, saving time. Over 1,000 farmers have been trained in better ways to grow food.
Case study: Tupaia
The innovationXchange (iXc) enables us to harness new ideas, partners and resources so we can deliver our aid program more effectively. Better healthcare services, improved prosperity and greater regional security are some of the big outcomes from an iXc initiative called Tupaia.
Given the geographic complexities of the Pacific, ensuring that each remote island has adequate medical supplies is a major challenge. But imagine if you could bring the Pacific islands closer together and track the availability of life-saving medication across the region with the click of a button. Tupaia—a mobile-enabled web platform—gives access to information on medical services and supplies available at health facilities in the Pacific, and helps health care decision makers to direct resources appropriately.
Tupaia has already achieved great success and with Australia’s support it will soon track the availability of medical supplies across the entire region, expanding its coverage to six countries.
Tonga recently used Tupaia’s real-time mobile data to assess damage to medical facilities from Cyclone Gita. In Timor-Leste, Tupaia is helping track availability of essential medicines at the national level, improving previous efforts by more than 20 per cent. These results will get better as the platform becomes more widespread.
Tupaia is supported by the Australian Development Accelerator, managed by the iXc. It won the 2018 Public Sector Innovation Award in the Digital Data category.
Case study: Aid for trade
In 2014 the Australian Government committed to 10 strategic targets in the Australian aid program, including increasing aid for trade investments from 12.9 per cent to 20 per cent of the total aid budget by 2020.
In 2016–17 the 20 per cent target was surpassed and reached 23.3 per cent2. It is expected to remain at around 22.4 per cent of the aid budget in 2017–18.
Aid for trade is about helping developing countries address their internal constraints to trade, such as burdensome regulations, poor infrastructure and lack of workforce skills. Through access to larger markets and by fostering competition, innovation and entrepreneurship, trade is crucial to creating jobs and boosting household incomes and government revenue. No country has achieved high and lasting growth without participating in international trade. Evidence also shows that trade positively affects incomes—an increase in the volume of trade of 10 per cent can raise per capita income by over five per cent.
The White Paper and the 2030 Agenda for Sustainable Development also support aid for trade. The initiative captures Australia’s determination to reduce poverty and promote sustainable development in the Indo-Pacific. Helping developing country partners to become prosperous serves Australia’s interests, as it fosters peace and security in the region and contributes to increased two-way trade.
Investments in aid for trade have resulted in real and significant impacts on the lives of the poor. In 2017 our partnership with the ADB’s Trade Finance Program enabled USD4.5 billion in transactions, benefiting nearly 3,000 small and medium-sized enterprises in developing countries throughout the region. Without Australia’s contribution, the Trade Finance Program would not have expanded into the Pacific and implemented gender-inclusive initiatives in several countries.
The department worked with the World Bank to assist more than 60 developing countries cut red tape when moving goods across the border. In Timor-Leste for example, processing times at Dili port were reduced from 16 to nine days, lowering that country’s costs of trading and strengthening links to global markets. Australia also partnered with the World Intellectual Property Organization to help Bangladesh, Nepal and Sri Lanka to navigate global copyright rules. This included providing tools such as e-books, which allowed 35,000 visually impaired students to access educational materials.
The 2018 OECD review of Australia’s aid program recognised Australia’s strong policy coherence in implementing its trade and development agendas (oecd.org/dac/peer-reviews/peer-review-australia.htm).
Report: Aid program performance reports against country and regional program objectives
For country and regional aid programs, our performance is assessed each year and published in an annual aid program performance report (APPR). All APPRs are peer reviewed and approved by senior management. The department’s Office of Development Effectiveness (ODE) also conducts an annual independent quality review. Judgements about performance are made against program objectives contained in Aid Investment Plans, which capture national interest goals for each country or regional program. In September we published 26 APPRs covering performance in 2016–17 (dfat.gov.au/about-us/publications/Pages/aid-program-performance-reports.aspx). These reports confirmed the majority of program objectives were on track. Progress was not as high in the Pacific as in other regions, reflecting the challenging development context with populations spread across remote areas making delivering services difficult. Economic shocks and natural disasters add to these challenges.
2017–18 APPRs will be published in September 2018. Publication of these reports forms part of our commitment to transparency and accountability in the management of the aid program.
Report: Identify and report on Annual Aid Evaluation Plan
Robust evaluations are an important part of our performance management system, ensuring we deliver a high-quality aid program. Evaluations provide evidence and lessons to:
- underpin aid expenditure
- support an organisational culture focused on innovation and continuous learning
- credibly demonstrate the achievements of the aid program
- strengthen program management
- contribute to addressing accountability obligations.
Under our Aid Evaluation Policy, country, regional and thematic aid programs are required to identify and complete an agreed number of independent evaluations each year. Evaluations focus on the highest priority issues facing each program. Strong governance arrangements ensure the quality of evaluations and their management responses.
In March we established an annual aid evaluation plan (dfat.gov.au/aid/how-we-measure-performance/ode/Pages/annual-aid-evaluation-plan.aspx) which committed to 46 development assistance evaluations over the year. Due to changing priorities, the availability of evaluators, and partner delays on joint evaluations, a revised plan of 43 evaluations was finalised for 2017; 95 per cent were published by 31 December 2017.
Review: Ongoing review of progress on implementation measures for more effective and efficient aid program delivery
Our ongoing internal review process helps us improve the effectiveness and efficiency of aid delivery. Our focus in 2017–18 was across six areas:
- Further strengthening strategic clarity by issuing revised guidance for the next generation of bilateral aid investment plans
- Enhanced governance arrangements to strengthen oversight and accountability by establishing a new aid governance board
- Better and more efficient ways to design investments by piloting an internal assurance unit to appraise projects that are considered high risk or are over $100 million
- Improving performance culture by strengthening systems for annual project review and investment in quality check moderators. A process for refreshing the government’s 10 strategic targets is underway
- Augmenting and protecting aid management skills and experience by developing a workforce plan for building and maintaining aid management and international development capability
- Learning lessons from across the public sector by trialling dedicated ‘senior responsible officers’ for major investments. We established an agreement management unit to support geographic programs developing tools for suppliers and staff.