Official Development Assistance (ODA)
Dr Ravi Tomar
According to the
Budget Statement Australia’s Official Development
Assistance (ODA) budget for 2009–10 is $3818.8 million, $29.2
million more than the 2008–09 expected outcome of $3789.6
represents a 2 per cent increase over the expected outcome for
2008–09. The ODA/Gross National Income (GNI) ratio will
increase from 0.33 per cent in 2008–09 to 0.34 percent in
The statement recognises the global effects of recession:
The past year has seen a dramatic change in the prospects of
developing countries due to the effects of the global recession.
Declines in foreign direct investment, export revenue, remittances,
tourism and other adverse impacts of the recession will reduce
economic growth and, in turn, may unravel progress towards the
Millennium Development Goals (MDGs)…
The impacts on growth will vary across the developing world but
overall will have an enormous human cost. Poverty reduction gains
will be substantially lower as a result of the recession.
There is also an acknowledgement of its effect on the Australian
Economic circumstances require some small adjustment to previous
plans for scaling up ODA in the near term. Despite this, the
Government expects to increase Australia’s ODA levels to
equivalent to 0.35 per cent of GNI in 2010-11, 0.37 per cent of GNI
in 2011-12, and 0.40 per cent of GNI in 2012-13. Increased
Australian aid will be directed first to achieve faster progress
towards the internationally agreed MDGs.
This contrasts with the projected increases forecast in the
Paper No. 2, 2008–09 in which the amounts were
The 2008–09 Budget provides $1.3 billion of new
initiatives over four years. It is expected that the ratios of
Australia’s ODA to GNI will be 0.35 per cent in 2009–10
(a year earlier than originally targeted), 0.37 per cent in
2010–11, and 0.38 per cent in 2011–12. These ratios
correspond to amounts of $4.2 billion, $4.6 billion and $5.0
billion in 2009–10, 2010–11 and 2011–12
There is also a reiteration of the government’s commitment
to increase Australia’s ODA to 0.5 percent of GNI by
Sectoral allocation of the AusAID administered ODA budget and
new initiatives in these sectors are as follows:
- expenditure on rural development is expected to be $230 million
in 2009–10, approximately six percent of total ODA
- a new initiative costing $464.2 million over four years to
strengthen the ability of certain countries in Africa and the
Asia-Pacific region to address food insecurity.
- expenditure on infrastructure and water and sanitation will be
$560 million in 2009–10, approximately 15 per cent of total
- a new initiative costing $454 million over four years to
improve infrastructure in East Asia and PNG.
- outlay in the education sector will be some $690 million,
approximately 18 percent of total ODA.
- expenditure for the health and HIV sector will be over $595
million, approximately 16 per cent of ODA
- the government will cancel up to $75 million in debt owed by
Indonesia provided the latter invests $37.5 million in the Global
Fund to Fight AIDS, Tuberculosis and Malaria for tuberculosis
- expenditure in the governance sector will be about $820
million, some 22 percent of total ODA
- a new initiative costing $138.6 million over four years to
‘improve the effectiveness of government and accountability
to citizens’ in East Timor and the Pacific
- after a two-year trial, it is proposed to invest $336.1 million
over four years ‘to enable the inclusion of significant
performance-linked aid elements within the new Pacific Partnerships
for Development’ and the expansion of existing arrangements
- expenditure in the environment and climate change sector in
2009–10 will be some $170 million, about five per cent of
In terms of the geographical distribution of ODA, Africa has
seen a large increase in allocation by AusAID—a total outlay
of $163.9 million for 2009–10, up from $116.4 million in
2008–09. In addition, the
Attorney-General’s Department ‘will provide $17.3
million over four years to assist African countries to develop
effective law and justice frameworks’.
Another budget initiative will boost Australia’s
non-military ODA to Afghanistan and Pakistan to over $500 million
over four years.
Given that the overall increase in the ODA budget from
2008–09 is just 2 per cent, the projected increase in the aid
budget as foreshadowed in Budget Paper No. 2, 2008–09
has effectively been put on hold in 2009–10.
Unless otherwise indicated, all information is derived from the
statement by The Hon. Stephen Smith, Minister for Foreign Affairs
and The Hon. Bob McMullan, Parliamentary Secretary for
International Development Assistance, Australian Government, Budget
statements 2009–10: Australia’s International
Development Assistance Program: a good international citizen,
Commonwealth of Australia, Canberra, 12 May 2009,
Statement, p. 11.
Statement, p. 16.
Australian Government, ‘Part 2: Expense measures’,
Budget measures: budget paper no. 2: 2008–09,
Commonwealth of Australia, Canberra, 2008, p. 186.
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