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Asian Development Cooperation: Insights from Australia

December 5, 2012

While the Asian Century is most often used to describe the global shift of economic power to Asia, Asia’s rise is also significant in the area of development cooperation. Asian countries have emerged as game changers in the aid arena, challenging traditional notions of aid, reshaping global aid architecture, and placing new challenges on the global development agenda.

Subway in Korea

Asian countries like Korea have emerged as game changers in the aid arena, challenging traditional notions of aid and reshaping global aid architecture.

Last week, The Asia Foundation, in partnership with the Lowy Institute for International Policy, Australian National University, and AusAID, hosted three events on Asian Approaches to Development Cooperation (AADC), in Canberra and Sydney. The events featured government officials and policy experts from China, India, Indonesia, and Korea, who shared their country’s role and approach to development cooperation in this rapidly changing global aid landscape.

AusAID directs half of its $4.8 billion annual budget (2011-12) to the Asia-Pacific region. At the same time, Australia is acutely aware that rising Asian powers like China and India are shifting the political and economic dynamics in the region, including in the area of development cooperation. Indonesia is Australia’s largest aid recipient, while at the same time being a leader in South-South and Triangular Cooperation. Although Australia is one of the largest and fastest growing providers of development assistance in the region, it and the other “traditional” large donors are now operating alongside India, China, and Korea as providers of significant development assistance to the region. Given the difference in approaches, this new landscape offers both opportunities for collaboration and possibilities for competition.

Participants at the AADC events discussed and debated some of the most salient issues on Australia’s development agenda:

Aid and foreign policy

Australian development and foreign policy pundits debate whether aid is less effective if it is linked to the donor country’s national interest. Over the last two decades, many Development Assistance Committee (DAC) donors have danced delicately around the relationship between their foreign policy and their development cooperation programs. Some, in attempt to protect the primary humanitarian and developmental interests of aid from national political and economic interests, have created dedicated and independent aid agencies.  Asian country participants in the AADC events were unequivocal about the link, stating that development cooperation is an intrinsic component of Chinese, Indian, and Korean foreign policy, for example. Government officials from China and Korea were firm that cooperation is extended first based on the stated needs and requests of the partner country, aid is not perceived as charity, but as a mutual benefit. Indeed words like aid, donor, and recipient do not sit well with Asian development actors. Korea, for example, understands its cooperation as development knowledge exchange, emphasizing Korea’s belief in knowledge-based development models.

Poverty

Even though economic progress in Asia, particularly China and India, accounts for significant reductions in global poverty, poverty nevertheless remains a pervasive problem. Middle-income countries, such as China, Indonesia, and India, are home to 75 percent of the world’s poor. Inequality in Asia is rising, with China and Indonesia topping the charts. Australian audiences questioned how, in the face of persistent domestic poverty and development challenges, Asian countries can justify being aid donors.  For Indonesia, sharing with other countries is enshrined within Indonesia’s constitution. Indonesia’s approach to development cooperation is less a matter of financial flows. Rather it is based on the principle of South-South Knowledge Sharing. This approach is valued by both partners and does not detract Indonesia from addressing its own domestic challenges. Similarly foreign aid does not conflict with China’s domestic concerns. China has promised to improve the welfare of its people, doubling their income within 10 years, while at the same time increasing its foreign aid budget. Foreign aid, because it is based on the principle of mutual benefit, is perceived as beneficial for China’s own development, promoting trade and investment, strengthening partner countries socially and economically, and enhancing China’s image abroad.  Based on these win-win principles, it is understandable that for both China and Indonesia, development cooperation has been a key and explicit feature of their foreign policy for decades.

Post-2015 Development Agenda

Australian development experts were keen to hear Asian perspectives on the post-2015 development agenda. 2015 marks the deadline set by world leaders in 2000 to achieve the Millennium Development Goals, a set of eight targets and indicators for addressing global poverty. Since the launch of the MDGs, Asian countries have been both leaders in achieving the targets as well as critics of their relevance in a rapidly changing global context. Asian and Australian experts noted current challenges like rising inequality, climate change, management of global public goods, and peace and security – which beg attention yet fall outside most aid frameworks.

Many Asian countries regard the G20, with its focus on economic growth and significant membership from Asia, as a viable platform for championing a 21st century development agenda targeting these emerging challenges. A recent study by the Korea Development Institute and the Centre for International Governance Innovation offers a revised set of goals which are designed to finish the job of the MDGs, fill the gaps, and tackle new challenges. These comprehensive goals which include inclusive growth, quality infrastructure, security, and civil and political rights, would comprise a shared global agenda and be applied to all countries, developing or developed.

Despite the different development cooperation approaches pursued by Asian countries in comparison to more traditional donors, the discussions in Australia revealed that there is increasing consensus around the challenges facing the Asian century. As the world discusses the future of international development post 2015, the need and value for an inclusive partnership, which includes the vital contributions and participation of Asian actors, is undeniable.

Anthea Mulakala is The Asia Foundation’s country representative in Malaysia and regional adviser for donor relations. She can be reached at amulakala@asiafound.org. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.

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