Australia has cemented its position as the Pacific’s largest aid donor by far as other countries pull back on lending and prepare to cut development assistance. Source: ABC News.
The latest version of the Lowy Institute’s Pacific Aid Map captures the flow of development spending in the Pacific from 2008 until the end of 2023.
The data shows that even before the Trump Administration’s moves to dramatically slash foreign aid this year, total development spending across the Pacific fell by 16 per cent in 2023 to $US3.6 billion.
It is the second survey in a row to show aid falling in the Pacific, with most of the 2023 drop explained by receding emergency lending from the heights of the COVID pandemic.
But a host of countries – including the United States, New Zealand and several European countries – have all flagged or implemented aid cuts since then, which means Australia looks set to take on an even larger role in the Pacific.
The map shows that Australia provided about 43 per cent of all overseas development finance to Pacific countries in 2023, which is “more than four times the contribution of New Zealand, the next largest donor”.
The aid map’s lead author, Riley Duke, said Australia’s dominant role was set to expand, and that by 2028 it would “likely deliver more than double the combined support of Japan, New Zealand, the United States, France, Germany, and the United Kingdom”.
“Australia has never before shouldered quite as much responsibility in the Pacific before, particularly among like-minded countries which also offer development assistance in the region,” Mr Duke said.
He said most of that increase would not come from Australian grant programs, which are likely to remain steady, but from its move to continue ramping up infrastructure lending to the region.
While that will hold risks, with some Pacific nations already holding uncomfortably high levels of debt, Mr Duke said that lending would also “protect” the region from global aid cuts, which are set to hit the developing world hard.
He said global strategic and financial strains were pushing many donor countries to become more parochial in their outlook, either slashing aid or focusing more tightly on their key priorities.
“It’s not optional for Australia, whereas for some other countries, it has clearly dropped down the list.”
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Australia outpaces regional neighbours as Pacific’s largest donor (By Stephen Dziedzic, ABC News)
