Australian House of Representatives, Canberra.
Photo Credit: Aditya Joshi
As Australia reviews its international development policy, Palladium’s Rex Wickenden places the review in context and summarises some key recommendations for decision makers to consider.
Three years ago, the Australian Department of Foreign Affairs and Trade (DFAT) published the Foreign Policy White Paper, setting the Australian aid program on a different path. Engaging the private sector as a partner and stakeholder in achieving development outcomes, and advancing women’s political, social and economic participation were elevated to the forefront of strategic priority across DFAT’s global aid investments.
Considerable progress has been made since then. The private sector's role in providing jobs, creating opportunities and spreading prosperity is now widely accepted as the most powerful force in eradicating poverty. Innovative approaches to engaging the private sector to achieve development outcomes have been piloted, adapted, refined, and in many cases, successfully scaled-up. DFAT’s investments across a range of sectors and geographies have broken new ground, proving the model by unlocking the vast skills and resources held in the private sector to achieve lasting development impact at the greatest possible scale.
The current review of DFAT’s international development policy comes at a critical time. Challenges to regional security, stability, prosperity and resilience are increasing, and now more than ever, require a coherent, coordinated response. Here are four recommendations that build on the successes of the Australian aid program to accelerate progress toward developing a more prosperous, secure, and resilient Indo-Pacific region.
1. Unlock the potential of the private sector.
It’s widely accepted that greater security, stability, prosperity, and resilience can be achieved by unlocking the potential of the private sector to achieve development outcomes. While individual pockets of excellence are found across DFAT’s portfolio, the practice of engaging the private sector is not a consistently applied, and significant parts of Australia’s aid program still miss the opportunity to increase the scale and sustainability of impact.
To deliver better value for every dollar invested, support inclusive economic growth, and accelerate regional economic integration, DFAT should continue to champion private sector engagement and take steps to broaden and deepen best practice across the aid program.
2. Recognise that complex challenges require systemic solutions.
Addressing complex challenges such as poverty, gender equality, climate change and other deeply rooted social or environmental concerns requires approaches that can adapt to rapidly changing, constantly evolving contexts. Systems approaches have proven to be among the most effective tools at DFAT’s disposal to understand, diagnose, and intervene in complex, interconnected markets. These approaches are technically demanding, involve a higher level of risk, and take time to yield results – but the rewards are worth the investment.
Systems approaches are increasingly applied in diverse sectors from Health, Education, Governance, and Security, to Humanitarian Relief. The Pacific Labour Facility is a prominent, recent example of how a systemic approach can be applied to new sectors (in this case, labour markets) to achieve greater, more sustainable results.
DFAT should view all its activities that are addressing complex challenges through a systems lens to increase the scale and sustainability of its impact.
3. Capitalise on synergies between initiatives working to achieve similar goals.
The Pacific Step-up, and this current refresh of DFAT’s international development policy, offer a significant opportunity for improving coordination and collaboration between Australia’s aid investments and foreign policy objectives. More effective collaboration is required not only between DFAT’s own programs, but also with those of like-minded partners with major investments in the Pacific, such as New Zealand. This will reduce duplication and inefficiencies arising from a range of overlapping – and even competing – investments targeting limited geographies and small populations.
DFAT should strengthen mechanisms and incentives for better coordination and collaboration between investments working in adjacent spaces; for instance, between private sector development programs (MDF, PHAMA+), education investments (Australia Awards and Pacific Scholarships), infrastructure investments, and broader Australian Government initiatives focused at the policy level.
4. Protect the aid program as a unique tool in Australia’s foreign policy.
The aid program has a unique ability to reach people across societies, including in some of the most remote and challenging areas of the Indo-Pacific region. Economic diplomacy objectives are more effectively achieved by engaging through multiple channels, at multiple levels, establishing the people-to-people connections that are foundational to closer political and economic alignment.
Taking a principled, partnership approach to international development that acknowledges countries as equal partners in achieving mutually beneficial outcomes, rather than recipients of aid, significantly increases the effectiveness of any development activity. To be most effective, aid investments need to maintain a degree of independence and alongside this partnership approach to development cooperation.
Australia has a unique role and status in the Indo-Pacific region. The Australian aid program has achieved remarkable successes, particularly in promoting cultural norms around gender equality and human rights, to the benefit of millions. In the face of growing threats to the regions’ collective security and prosperity, Australia’s foreign and international development policy calls for increased engagement with its development partners. Australia’s leadership in turbulent times has the potential to set the course for decades to come, with profound consequences for our own security and prosperity.
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