Indonesia Becomes Main Recipient of Australian Aid

By Shar Adams, Epoch Times Australia Staff

May 14, 2007

Children play on a busy street next to their parents' hut in Jakarta. Australia's aid to Indonesia is increasing from $328 million to nearly $460 million in the coming financial year.

The Federal Government's decision to select Indonesia over Papua New Guinea (PNG) as the number one recipient of Australian aid does not reflect a downgrade of Australia's relationship with PNG says Asia Pacific observer Dr George Quinn.

It is instead a positive message to South-East Asian countries that the Australian Government recognises the enormity of problems faced by the region, Dr Quinn said.

Australia's aid to Indonesia will jump from $328 million to nearly $460 million in the coming financial year, putting Indonesia ahead of PNG for the first time.

Annual aid funding for the Philippines was also up from $30 million to $100 million but PNG's aid only lifted $10 million, albeit to $355 million, over the next financial year.

Foreign affairs Minister Alexander Downer said the increase in aid to Indonesia was partly in response to the tsunami which hit Aceh two years ago and partly due to the sheer weight of population numbers in Indonesia.

"Remember Indonesia is a vast country of more than 200 million people. Papua New Guinea of course is a fraction the size in population terms of Indonesia," he told Australian broadcaster ABC. "So, you know, I think it's inevitable that over time Indonesia is going to become a bigger recipient of Australian aid, and that's happened." Dr Quinn, a specialist in South-East Asia at the Australian National University, said in terms of per capita expenditure, Indonesia was still way behind other countries in the Pacific, and the increase in aid was a move he hoped would be repeated.

Relegating Indonesia to top aid recipient, however, was not a slant on the Australia Pacific relationship, he said.

"This is not a reduction in aid to Papua New Guinea and Pacific countries, it's a very small upping of the Indonesian budget" Dr Quinn told The Epoch Times, "I don't think there is any reason for the countries of the Pacific to think that Australia is losing interest in them."

However, relationships between Australia and Pacific nations have cooled in recent years with the Australian Government increasingly concerned about where and how its aid dollars are spent.

Mr Downer has said that corruption, poor governance and a lack of leadership are issues that need to be addressed if Pacific nations want to maintain high levels of funding from Australia.

"Real progress in essential economic and governance reforms will be recognised through performance incentives," Mr Downer said in a Budget media release.

While Papua New Guinea's Health Minister, Sir Peter Barter, thanked Australia for its aid, he lashed out at Mr Downer's negative appraisal of the PNG Government.

"The Australian Government needs to consider carefully how it evaluates other countries," Mr Barter told PNG's Post Courier. "I predict that Indonesia will react far more negatively if Mr Downer imposes his paternalistic and negative assessments on it. There will be suspicion of strings attached."

Dr Quinn said that while Australia's relationship with Indonesia had and will continue to "rollercoaster" because the countries were "so very different", the Australian Government had invested considerable resources over the years in building up expertise within Australia on Indonesia.

The Australian Government had not shown the same interest or sensitivity in regard to the Pacific nations, Dr Quinn said, resulting in an unnecessary cooling of relations.

"It is true to say Australia could be a shade more sensitive in the way it deals with countries of the Pacific," he said. "We don't have, in universities and in the training of diplomats, a really comprehensive programme to alert diplomats and aid workers and government officers to the niceties of the culture and the languages of the Pacific".