Neoliberal governments and their supporters are accustomed to trumpeting peculiar solutions to world problems, where peculiar means making it easier for companies to profit and harder for workers to get pay raises, claiming that the fate of individuals is in their own hands (denial of the system). sexual failures) and reduce regulations to ensure enhanced fairness. Australia adds another dimension (not exhaustive) to that list – it gets mean when it comes to the world’s less wealthy countries. The problem with this approach is that it doesn’t deliver on its promises – it does make those who are already rich rich – but by the time the rest of us realize there’s a problem, the horses have run away and picking up the pieces has become more “expensive than before” In the past few weeks, our government has been yelling at China again. China is a threat, China is a liar, China is this, China is that. The trigger this time is that China’s foreign strategy has reached the Solomon Islands. , there is a problem with anti-China paranoid gangs within the Australian government. The Solomon Islands are less than 1,700 kilometers from our mainland, and the fear that China will build a military base there sends shivers down the spine of our conservative government (a euphemism). Be more generous and the Chinese will not invest there as easily.
background reading
1. Australia’s overseas aid cuts reveal a country that has lost its spirit (May 15, 2017).
2. Australians have many reasons to be ashamed – ODA is one of them (December 29, 2016).
3. Australia’s generosity to other countries is collapsing (April 9, 2015).
4. Advanced countries should invest in fair trade businesses (no ownership requirements) (22 March 2022).
I have written about the ways in which the privatisation of the UK water company has delivered bad results.
1. UK floods show short-sightedness of austerity (January 4, 2016).
2. Fiscal austerity short-sighted (June 10, 2015).
I’ve written about how the privatisation of Australia’s power generation and retail systems can be disruptive:
1. Market manipulation and blackouts (February 13, 2017).
2. Welcome to the world of privatized electricity and canned music (October 3, 2012).
I’m currently working on a large project on aviation fire services which is again under attack from the Australian government which is trying to cut investment and let the “market” work.
Next stop: major aviation disaster!
There have been countless examples over the past few decades of privatization, outsourcing, funding cuts, imposing so-called “competitiveness”, etc., as a disaster.
Cutbacks in foreign aid are another example.
One of the ways the Australian government is trying to hide its ODA track is by diverting ODA funds from sectors such as hospitals, education, infrastructure, etc. and using it to maintain the privatization of Manus Island and Nauru Prisons, where we have been sending people to seek refugee protection.
We imprison these people indefinitely, without rights, and then say the ODA budget is increasing.
For Australia, operating a concentration camp is ODA!
China’s foreign policy exposes our lack of generosity
It is reported that China is about to sign some kind of treaty with the Solomon Islands, I don’t know the specifics.
There is some evidence that such treaties between China and materially poorer countries are problematic for those countries.
But again, there is evidence that they improve the material prosperity of citizens.
So the jury is out, I’ll consider whether- The Belt and Road Initiative ——It has always been a sound development strategy.
Solomon Islands joined the Belt and Road Initiative in 2019, marking the growing involvement of the Chinese government in the Pacific region (Kiribati joined the initiative at the time).
Of course, Australia likes to see itself as the region’s trump card – the bullying nation that helped us resist Japanese aggression in the region during World War II.
For example, the way we have treated East Timor over the past few decades is a disgrace (geographical note – East Timor is not in the Pacific Ocean, but it is still a close neighbor).
Our own global obligations
In 1970, the 25th United Nations General Assembly adopted – Resolution on the development of financial resources – (paragraph 43) said:
…Each economically developed country will gradually increase its ODA to developing countries and will do its best to reach a minimum net market price of 0.7 per cent of its gross national product by mid-century.
Many developed countries, including Australia, have failed to deliver on this promise.
Thirty-two years later, the United Nations reaffirmed these goals— Report of the International Conference on Financing for Development – At the Monterrey Conference (18-22 March 2002), declared:
…We urge developed countries that have not done so to make concrete efforts to achieve the target of 0.7% of gross national product (GNP) in ODA to developing countries…
This – 0.7% ODA/GNI Target – History – Worth a read (short).
The ODA/GNI ratio tells us how much ODA is allocated by any country’s government relative to the size of the economy (gross national income).
The latest OECD – 2021 Development Cooperation Report – Tell us about Australia:
…official development assistance (ODA) as a share of gross national income (GNI) has declined over the past decade
data
The OECD publishes fairly reliable official development assistance figures.
The graph below shows the change in ODA/GNI ratios for selected (advanced) OECD countries between 2000 (red triangles) and 2020 (blue bars).
The dashed line represents the 0.7% target.
In 1970, when Australia signed on to the 0.7% target, we spent 0.37 of the GNI on ODA, and we were a pretty poor country in material terms (1970).
The chart below shows the history of Australia’s ODA/GNI ratio since 1960, when the OECD first collected data.
Since the mid-1970s, when Australia’s fiscal deficit paranoia really started, we have gradually reduced the proportion of GNI that goes to foreign aid.
It is now at record lows and successive governments have shown no willingness to reverse the downward trend.
Australia likes to claim it’s “overweight” when it wins some sporting events, but when it comes to important things (I love sports) like feeding hungry children, we largely ignore our international responsibilities and commitments.
Still, we always seem to find millions of dollars to buy military equipment and invade countries with the United States.
The graph below uses data from the Australian National University’s Centre for Development Policy – Australian Aid Tracker – The report, first published in 2016, provides a valuable source of data on “The State of Aid Work in Australia”.
Raw data from the Commonwealth – Ministry of Foreign Affairs and Trade.
As far as the Asia-Pacific region – Australia’s immediate neighbour – is concerned, “the vast majority of Australia’s bilateral aid goes to countries in East Asia and the Pacific.”
You can also explore great visual resources – here.
The graph below shows Australia’s total aid to the Asia-Pacific region in millions of dollars.
After the global financial crisis, the official development assistance budget took a hit.
There were some temporary shots in the early stages of the pandemic, but that’s over.
As a result, Australia is not only failing to meet its UN obligations on ODA/GNI commitments, but also cutting its ODA grade Basic terms adjusted for inflation.
The graph below shows Australia’s actual official development assistance to the Solomon Islands.
It replicates the pattern in the image above.
In fact, our ODA to the Solomon Islands has fallen from a peak of A$342 million in 2009-10 to an estimated A$161.1 million in 2022-23, a decrease of 52.9%.
In 2010, the population of Solomon Islands was 527,861.
So on a per capita basis, Australia’s ODA equals A$649 (per person).
In 2020, the population grew to 686,878 and Australia’s per capita ODA spending actually fell to $268.
By 2022-23, with the estimated population growth, the real value of Australia’s per capita ODA spending will fall further to $217 per person.
Miserliness is not the word.
Remember, the Solomon Islands were the main battleground of conflict during World War II (between 1942 and 1943) when the Imperial Japanese Army tried to protect its southern regions and prepared to invade Australia (resource).
The islands were badly damaged during the conflict, and many civilians lost their lives as the attempted invasion of Australia was defeated.
My own father was also involved in this conflict.
Many civilians died protecting Australian soldiers.
The Australian government doesn’t seem to remember being grateful.
So with Australia’s ODA withdrawal and population growing, the Chinese government clearly sees an opportunity.
While China’s ongoing investment is shifting from ODA to lending, the fact remains that with a little more generosity from Australia, the chances of the Chinese government reaching these deals with the Solomon Islands government may be smaller.
A lot of shady things have happened between China and Solomon Islands MPs (allegedly), but Australia’s declining influence in the Pacific can only be blamed on itself.
in conclusion
Another negative effect of neoliberal austerity mentality when applied to fiscal policy design.
Enough for today!
(c) Copyright 2022 William Mitchell. all rights reserved.
