7 Foreign Affairs and Trade
7.1.1 Interests in North Asia
7.6 Development Cooperation
East Asia Analytical Unit
The creation of the East Asia Analytical Unit (EAAU), within the 'Interests in North Asia' Sub-program of the Department of Foreign Affairs and Trade, stems from a decision in 1990 to establish a specialist unit in the Department to enhance Australia's research and analytical capacity in relation to Northeast Asia. The decision was in response to one of the conclusions of the Garnaut Report, Australia and the Northeast Asian Ascendancy (1989, p. 372). The EAAU has produced a series of reports on strategic and economic developments in Northeast, Southeast and South Asia, and Australian business relations with these areas. (The most recent EAAU report is a detailed assessment of China's development of a market economy.) Work for these reports has been conducted by both DFAT staff and consultants: the Unit is currently headed by Dr Frances Perkins.
In 1993 the funding provided for the EAAU in the DFAT portfolio was raised to $1.3 million per year, to be continued up to June 1997. $1.347 million was provided in 1996-97. Specific funding for the EAAU has now come to an end and funds for the maintenance of the Unit will have to come from DFAT running costs. This will be done in 1997-98, but the Unit will be reduced in size (details of the changes to the Unit and its operations are not yet available).
In 1997-98, Australia's aid Budget is forecast to be $1429.9 million, a reduction of $15.9 million, or 1%, on the estimated outlays for 1996-97. However, the real decline (at constant 1996-97 prices) amounts to 3.2% over last year's outlay. The estimated expenditure for 1996-97 itself represents a reduction of 9.7% over the expenditure in 1995-96.
The ratio of the volume of Official Development Assistance to the Gross National Product (the ODA/GNP ratio) will fall to an all time low of 0.27% compared to 0.31% in 1995-96 and 0.29% in 1996-97. This will bring it on par with the latest available (1995) average ODA/GNP ratio of OECD countries.
In May 1996, the Government terminated the Development Import Finance Facility (DIFF) scheme. Consequently, while no specific appropriation for this program was made in 1996-97, $11.8 million was spent to meet the cost of projects which had a pre-existing offer of DIFF support. The Government further indicated to the governments of Indonesia, China, the Philippines and Vietnam that some high priority projects in the pipeline could be considered under their respective country program allocations. To this end, their country program funding was increased in 1996-97. Several other projects have now been identified and included within the country programs for China (9), Indonesia (3) and the Philippines (2). Overall, aid commitments have been maintained at 1996-97 levels with the exception of aid to Indonesia which has suffered an overall decline, reduced from $106.3 million in 1996-97 to $88.9 million in 1997-98. This decline 'primarily reflects the completion of final legal commitments under the former DIFF scheme which were discharged in 1996-97'.
Initiatives announced in the 1997-98 Budget include:
Programs which have been cut include:
Programs covered by legal obligations and international treaty commitments have been maintained. This includes commitments to multilateral development banks and for the Montreal Protocol and the Global Environment Facility. Outlay for Australia's contribution to the Asian Development Fund increases from $75.7 million in 1996-97 to $107.8 million in 1997-98.
Other salient features of this year's aid Budget include:
