The poor security situation in parts of the Middle East and Africa continues to impinge on Australia’s interests.

Despite Daesh losing territory in Iraq and Syria, the group still poses a major threat to the region and international community.

Through the department’s posts in the region and the Iraq and Syria Task Force in Canberra, we facilitated Australia’s military contribution to the counter-Daesh coalition, led our political engagement in coalition meetings and working groups and advocated for political progress in Iraq and Syria.

We also provided $71.5 million in response to the humanitarian crises in Syria and Iraq and developed a new $220 million three-year assistance package to support Syrian refugees and the neighbouring countries hosting them. The department managed the provision of significant assistance to the Palestinian Territories, including the development of new multi-year programs.

The department oversaw the easing of sanctions on Iran in line with the Joint Comprehensive Plan of Action nuclear deal reached between Iran and the P5+1. We facilitated a visit to Australia by Iranian Foreign Minister Zarif, the first such visit in 14 years. We also intensified exchanges with Israel on regional security and innovation.

Australia’s trade and investment relationship with Gulf Cooperation Council countries grew, supported by our posts’ economic diplomacy work and the January 2016 visit by the Minister for Tourism and International Education. We strengthened links with the region through visits by the Secretary-General of the Organisation of Islamic Cooperation in February under the Special Visitor Program, and by the UAE Foreign Minister in March 2016.

The department readjusted the focus of its engagement with Africa in 2015–16 to concentrate on growing and diversifying economic relations, while recalibrating a reduced development program to maximise impact.

The Foreign Minister’s attendance at Africa Down Under Mining in Perth, our participation at the Cape Town Mining Indaba in South Africa and the then Minister for Trade and Investment Andrew Robb’s visit to Nairobi all advanced our economic diplomacy objectives and provided support for Australian business. Despite the commodities downturn, the department estimates that Australian mining investment in Africa was worth $30 billion in 2015 and two-way trade was $7.6 billion.

The department’s $31.8 million Africa bilateral aid program focused on Australia Awards, providing quality targeted training in extractives, agriculture and public policy. Australia also provided $65.5 million in humanitarian assistance to the Horn of Africa (Somalia, South Sudan and Ethiopia). The innovative Australia Africa Community Engagement Scheme (AACES) surpassed original targets and expectations in providing health, water and sanitation and food security assistance.

Our posts maintained a strong reporting focus on security in Africa. In response to the increasing threats in the Horn and Sahel region, the department also stepped up cooperation to counter violent extremism and terrorism. We were active in encouraging a resolution of the South Sudan conflict, including through financial assistance to the International Joint Monitoring and Evaluation Commission.

We established the Advisory Group on Australian African Relations to provide advice to the Government from business, universities, NGOs and community representatives on initiatives to advance links with Africa.


Promoting a stable and prosperous regional and global environment by cultivating and deepening our engagement with bilateral and regional partners and multilateral institutions

Countering Daesh in Iraq and Syria

Case Study

In 2015–16, the department led Australia’s whole-of-government response to the threat posed by Daesh, facilitating our military contribution in Iraq and Syria and helping shape political outcomes to promote a more stable regional and global environment.

During the reporting period local forces, with support from the counter-Daesh coalition, made steady military gains and reclaimed territory. But long-term stability requires both military outcomes and progress in addressing the underlying political conditions that enabled Daesh’s rise. Recognising this, we stepped up our efforts in three key areas:

  • our advocacy raised the importance of political strategy in coalition decisionmaking and led to improved coalition coordination on cross-cutting political and military issues;
  • we pushed for more strategic and joined-up coalition advocacy on political reconciliation in Iraq. By better aligning our diplomatic efforts with key partners, we were able to amplify our outreach on the fundamental political issues Iraq must address to build the conditions for long-term stability and avoid the emergence of another Sunni insurgency once Daesh is defeated; and
  • we secured membership of the International Syria Support Group (ISSG). The Foreign Minister attended an ISSG ministerial meeting for the first time in May 2016 where she pressed at the highest levels for improved humanitarian access and compliance with the cessation of hostilities—key issues underpinning peace talks in Geneva and priorities for Australia.

Iraq and Syria are challenging environments where progress will be incremental and difficult to measure. Our efforts have helped to ensure focus remains on the important political issues that ultimately hold the key to bringing a sustainable end to the conflicts in those countries.

Improving market access for Australian goods and services, attracting foreign investment to Australia and supporting Australian business abroad

Encouraging foreign investment

Case Study
Ambassador to the UAE Arthur Spyrou (3rd left) and Consul-General Dubai and Senior Trade Commissioner Gerard Seeber (2nd right) meet with CEO Masdar HE Mohammad Jameel Al Ramahi (3rd right), Abu Dhabi, 7 June 2016. Pictured also, left, First Secretary John Cavanagh and Masdar Senior Business Development Manager Amalia Giannakikou; right, Austrade Senior Investment Manager Preeti Rekhari. [DFAT/Mostafa Farghaly]

Encouraging foreign investment

The United Arab Emirates is home to sovereign wealth funds (SWFs) that together manage an estimated US$1 trillion in assets. Our embassy in Abu Dhabi engaged actively with the funds to promote Australia as an investment destination and to help funds assess obstacles and opportunities in the Australian market. This close engagement is central to our economic diplomacy strategy and whole-of-government effort to attract long-term, high-quality institutional investors to Australia.

The department facilitated advocacy by high-level Australian visitors to the Gulf, including the Minister for Trade and Investment, the Minister for Tourism and International Education and the Minister Assisting the Minister for Trade and Investment, and senior Treasury officials.

The department also coordinated whole-of-government efforts to facilitate visits to Australia. One highlight was the visit by Masdar—a subsidiary of an SWF based in Abu Dhabi, with a reported US$66 billion under management and a world-leading investor in renewable energy projects. Masdar visited three Australian states, which involved a number of ministerial-level meetings.

Against the backdrop of fierce international competition for UAE investment funds, high-level and sustained engagement by the department and Austrade helped facilitate large-scale UAE investment in Australian infrastructure. In November 2015, the New South Wales Government announced a 99-year lease of its electricity transmission grid—a 12,600 kilometre network connecting seven million customers—to a consortium of buyers, including an approximately $1 billion dollar stake from the Abu Dhabi Investment Authority. The authority is reportedly the second-biggest SWF in the world with assets of around US$773 billion. It holds the largest hotel portfolio in Australia and is an important investor in Australian infrastructure, including three major ports.

Delivering an innovative aid program, centred on the
Indo–Pacific region, which contributes to sustainable economic growth, poverty reduction and regional stability

Australia Africa Community Engagement Scheme

Case Study
Women and children in Rwanda accessing basic health services. [WORLD VISION/Ilana Rose]
Australia’s support through AACES for health services in rural and remote areas in Rwanda is enabling women and children to access basic health services through a partnership with the local government. [WORLD VISION/Ilana Rose]

Australia Africa Community Engagement Scheme

The AACES was a five-year (2011–16), $83 million partnership between the department, ten Australian NGOs and their in-country partners in 11 African countries. Through AACES, the department funded 26 projects to improve access to food security, maternal and child health, and water, sanitation and hygiene services for marginalised communities.

AACES surpassed original targets and expectations. Over 2.3 million people directly benefited, of which almost 1.5 million were women and girls.

Approximately 1 million people accessed water, sanitation and hygiene (WASH) services, over 800,000 people experienced improved agricultural productivity and almost 500,000 people accessed maternal and child health services. By improving agricultural practices and increasing access to healthcare and WASH facilities, AACES supported sustainable economic growth and poverty reduction.

Through AACES we focused on empowering women, youth, and people living with disabilities. Beneficiaries and stakeholders agreed AACES had improved their lives:

‘… thanks to the project we are not registering any diarrheal outbreaks since the system was rehabilitated dating back to five years ago. The system has really helped in reducing under-five mortality due to reduced incidences of diarrhoea and dysentery. Again, women no longer have to walk long distances to collect water now than before. This has helped them spend the time saved on collecting water on other economic activities such as groundnut farming to boost household incomes’.

A Water Users Association Board Member in Malawi (WaterAid Australia)

The scheme demonstrated how local ownership, relationship building and joint problem-solving can lead to more effective program delivery. Communities worked together through coalitions and negotiated directly with local governments. The scheme also demonstrated how the department can work collaboratively with NGOs, through sharing information and policy dialogue, to maximise the impact of our aid in Africa.

The AACES monitoring and evaluation system has been nominated for an award for excellence by the Australasian Evaluation Society (2016).

Analysis and outlook

The department provided very strong support to facilitate Australia’s effective military contribution to the counter-Daesh coalition. We also played a significant role in shaping Australia’s policy approach to the counter-Daesh effort, and were very active in seeking to encourage enhanced coalition coordination and strategy. Coalition coordination has strengthened as a result. While military gains against Daesh have been made, addressing the political and sectarian challenges that brought about the group’s rise will continue to be challenging, and will require continued attention by coalition partners, as will the dire humanitarian situation in some locations.

As nuclear negotiations between Iran and the P5+1 moved towards agreement, the department successfully led a re-engagement strategy with Iran. Key elements included the first exchange of foreign minister visits in over a decade, which have laid the foundation for ongoing constructive dialogue on key regional security and bilateral issues and the growth in commercial links. The nuclear deal is an opportunity for Iran to engage more constructively in the region and with the international community, but much will depend on Iran’s approach.

Australia along with other like-minded partners advocated for a resumption of direct negotiations between Israel and the Palestinians to reach a two-state solution. Negotiations remain paused, but we will continue to support renewed international efforts to encourage a resolution of this issue.

Ministerial visits to and from the Gulf countries enabled us to promote Australia as a strong trade and investment partner and to push for Gulf Cooperation Council (GCC) FTA negotiations. While a resumption of FTA talks has not yet been agreed by the GCC, through the active engagement of our posts there is a growing awareness of Australia’s commercial strengths, and two-way trade in goods and services with the GCC grew 5.3 per cent in 2015. The Gulf will remain an investment and trade priority and we will continue to encourage the development of commercial links, including through new bilateral initiatives.

A reduced budget allocation for development assistance to Africa required tightening of the geographic and sectoral focus of the program. This was done with minimal impact on bilateral relations. Our continued focus on the Australia Awards program was valued highly by African partners.

While the commodities downturn highlighted risk for Australia’s economic engagement with Africa, the department provided strong assistance for our commercial interests with Africa, including through our support for the key Africa Down Under and Mining Indaba conferences to showcase Australia’s mining sector capabilities. Further diversification to take advantage of Africa’s economic growth trajectory will be important, notwithstanding the range of challenges across the continent. Terrorist threats also impinged on Australian interests and will continue to pose a threat in the Horn and Sahel.

Our growing contribution to the education of the continent’s leadership, both through the Australia Awards and self-funded study, will assist African development and support our broadening economic and political engagement over coming years.

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