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Last Update: Thursday, March 10, 2005. 7:20pm (AEDT) Aust promises neighbours economic help

Australia is to investigate the long-term economic problems confronting East Timor, Papua New Guinea and the South Pacific.

Foreign Minister Alexander Downer announced the program when giving his annual statement to Parliament on Australia's aid program.

Mr Downer says Australia wants to stimulate economic growth, as well as help confront corruption and poor governance.

"I'm pleased to announce a Pacific 2020 exercise, which will investigate the long-term economic prospects for East Timor, PNG and the Pacific," he said.

"This will culminate in a regional conference early next year.

"Poor leadership and corruption plague many of our partner countries.

"Unless leaders act and make decisions based on the broader interests of the state, the future of these countries is bleak."

http://www.ausaid.gov.au/media/release.cfm?BC=Speech&Id=4181_6837_1755_8392_9413

SPEECH MINISTER FOR FOREIGN AFFAIRS ALEXANDER DOWNER 10 March 2005 Ministerial Statement to Parliament on Australia's Aid Program

Speech by the Minister for Foreign Affairs The Hon Alexander Downer MP delivered to Parliament on 10 March 2005.

I am pleased to deliver the thirteenth annual Statement to Parliament on Australia's aid program.

Since the tabling of my last Statement to Parliament in November 2003, we have witnessed yet another devastating event that has redefined our approach to the world and our place within it.

The tsunami that hit Indian Ocean rim countries on Boxing Day killed hundreds of thousands of people; displaced another million; and left five million without basic services.

None of us will ever forget the images of grief and devastation that emerged from the affected areas.

The tsunami crisis demonstrated Australians' compassion. Australian citizens responded with unparalleled generosity.

At last count, Australian non government agencies had received more than $280 million in donations.

The Government's response mirrored, in its speed and size, the response of the Australian people.

The Australian Government swung into action on the same day as the disaster, with our first relief flights, loaded with emergency stores, taking off the following day.

An AusAID officer was one of the first outsiders to enter Aceh to undertake an assessment of its needs - and Australian aid personnel will stay in Aceh and other affected areas, until we are satisfied their work is done.

We made an initial aid commitment of $60 million alongside substantial defence and police support, in the immediate aftermath of the disaster.

Building on an existing $800 million program to Indonesia over the next five years, the Government has committed an additional $1 billion to the long-term reconstruction and development of Indonesia. This $1 billion package is the largest single aid allocation in Australia's history.

And it cemented a strong sense of partnership between the peoples of Indonesia and Australia.

Innovative approaches

This initiative is just the latest in which Australia's aid has adapted to the changing global environment.

We don't rely on traditional solutions. We are not bound by theories.

We focus, not on rhetoric, but on action and results.

This is underpinned by a truly coherent, whole of Government approach to the region's development challenges.

We have demonstrated this repeatedly.

Our responses to the crisis in Solomon Islands, to the instability and economic vulnerability of Papua New Guinea to which Australia has committed an additional $800 million, and to the tsunami crisis, were all possible because of the strong and flexible relationships we have established over the years with our key development partners.

And, in particular, reflect the seamless working relationship that has developed between Australia's aid program and other arms of Government.

The Australian approach to development is mature.

It is sure-footed and innovative.

It weighs up a challenge and determines the most appropriate and effective response - in which the aid program represents a part of a broader Government response.

AusAID now has a more educated professional workforce - and they are increasingly in the field

And this is not self-praise.

Last December, the OECD's Development Assistance Committee, in its review of Australia's aid, praised our leadership role in the Asia Pacific and called on Australia to share its experience more widely.

Another OECD report has cited the Australian led Solomon Islands intervention as an example of how a donor's security and development assistance can help a country regain legal and economic stability.

In the lead up to the UN Summit in September, there is great discussion around the Millennium Development Goals.

Of course Australia is committed to helping countries accelerate progress against the Goals.

But we start with a fundamental question: what makes countries successful?

In doing so it is instructive to look into the experience of East Asia where 520 million people have been lifted out of poverty over the past twenty years.

Put simply, the key to lifting people out of poverty is sustainable, broad-based economic growth. No durable solution to poverty can be achieved without it.

And we know how such growth is obtained - its through:

* providing secure and stable environments * improving governance and the investment climate, including property rights * opening up to trade * and by helping the poor to participate in such growth through health, education and market access.

And Australia is focused squarely on helping countries in our region in this way.

In doing so we are helping countries in our region accelerate progress towards the Millennium Development Goals - a message we will be taking to the UN Summit in September.

It is important to again underline the importance of a more integrated global trading environment, particularly in agriculture, in reducing poverty.

A recent World Bank study 1 has found that reform of agricultural and food trade policy will result in global gains of $US265 billion by 2015 - with the benefits shared roughly equally between developed and developing countries

Fourth Term Agenda

The aid program has adapted to new circumstances - and it continues to change.

The Government's fourth term agenda for the aid program will build on its achievements to date, but will take them further in key areas.

We will be developing further our closer partnership with Indonesia.

The centerpiece for this is the $1 billion partnership.

This will support tsunami recovery, and provide long term assistance for Indonesia's programs of reform and capacity building.

Priority areas will be determined through a Joint Commission headed by our Prime Minister and Indonesia's President, and involve ministers from both countries.

Our ongoing aid program will help Indonesia stimulate the growth necessary to make inroads into poverty, and implement key governance reform.

There will also be a focus on basic education support, including for Islamic schools, and to expand people to people linkages.

We will develop further our long term engagement with our immediate neighbours grappling with governance and economic problems.

The economic, social and security costs of neglecting states suffering from such fundamental problems are significant.

They need the help of the international community to overcome these challenges and Australia is determined to continue to assist.

The Enhanced Cooperation Program for Papua New Guinea and the Regional Assistance Mission to Solomon Islands remain core elements of our engagement to those two countries.

There is an opportunity to entrench improvements and maintain services for the poor as part of our programs to PNG and Solomon Islands.

In PNG we will be developing a new country strategy to articulate a long term vision for our aid relationship, with particular attention on growth, political governance and HIV/AIDS.

And for both PNG and Solomon Islands we will continue to focus squarely on the task of building sound institutions.

This is not a question of creating extensive institutions, but its about building strong ones that work.

We will also back up our rhetoric on growth.

We are developing an initiative to stimulate growth to complement the strong governance focus of our program.

This will centre on improving market access, encouraging rural development and agricultural productivity, reducing the costs of doing business and enabling the poor to participate in growth.

In this regard, I am pleased to announce a Pacific 2020 exercise which will investigate the long term economic prospects for East Timor, PNG and the Pacific.

This will culminate in a regional conference early next year.

Poor leadership and corruption plague many of our partner countries.

Unless leaders act and make decisions based on the broader interests of the state, the future of these countries is bleak.

We will expand our assistance in political governance to enhance the integrity and transparency of decision makers and to build the internal demand for accountable government.

Effective use of all the assets of the state - particularly its people - needs to be centre stage.

Where we can we will help strengthen political and parliamentary processes and practice, and community participation.

We will expand our assistance for anti-corruption activities.

These will build on the partnerships we have developed with organisations such as Transparency International, ASEAN and APEC with the later benefiting from a $3 million contribution to build anti-corruption capacity announced by the Prime Minister last November.

I have already announced a major increase in support for HIV/AIDS in the region, to $600 million.

I am determined to do whatever is necessary to help countries in our region fight this devastating pandemic.

This will focus particularly on PNG.

Australia is joining with PNG and Indonesia in a study to better understand the pandemic in our sub-region in order to inform effective approaches to combat it.

And earlier this week I committed $3 million to foster partnerships between Australian HIV/AIDS organizations with their regional counterparts.

We will continue to contribute to security and stability.

Sustainable, broad-based growth is impossible in countries which cannot guarantee public safety.

And security is not merely a problem for business. In violent or insecure environments, inevitably the poor pay the highest price.

We have doubled our assistance to Indonesia and the Philippines to help manage terrorist threats.

We will build upon our partnership with the Philippines Government in support of peace building in Mindanao, as well as in basic education.

Conclusion

Australian aid is delivering results.

Development is not easy to measure. But one can point to some dramatic, undeniable success:

* like the eradication of polio from the south-west Pacific; * or the restoration of law and order in Solomon Islands; * or the doubling of the number of children attending school in PNG in the last ten years; * or the swift delivery of much-needed emergency aid following the Asian tsunamis.

People who have been afraid to leave their homes for fear of being attacked, who are struggling with corrupt and inefficient bureaucracies, or who simply need their child immunised or to be able to attend school, are in no doubt about the effectiveness of Australian aid.

Nor are the people of Aceh.

I am committed to delivering the best possible aid program. I refuse to become complacent.

For that reason after substantive research, analysis and consultation, I intend early next year to deliver a white paper outlining a medium term strategic blueprint for the aid program in the Asia Pacific region.

This exercise will draw on the best possible external expertise.

I expect this process to identify ideas for an aid engagement by Australia which continues to be at the cutting edge, and working to meet the challenges ahead.

As we move in new directions one thing is for sure - that is the Australian aid program will continue to reflect qualities that characterise the Australian people: pragmatism, resourcefulness, and an emphasis on getting the job done.

And, overarching all those qualities, a sense of partnership with the people with whom we work.

I present the paper- Australian Aid: An Integrated Approach and move: That the House take note of the paper.

1 Aksoy, M. and Beghin, J. (eds)(2005) Global Agricultural Trade and Developing Countries, World Bank.

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