Overview

Australia’s aid program contributes to sustainable economic growth and poverty reduction by supporting economic and human development, with a focus on the Indo–Pacific region.

The program is implemented in line with the Government’s aid policy, Australian aid: promoting prosperity, reducing poverty, enhancing stability and performance framework, Making Performance Count: enhancing the accountability and effectiveness of Australian aid.

The department continued reshaping the aid program in accordance with the six priority areas of the aid policy framework. We developed new strategies to guide investments in aid for trade, economic infrastructure, education, gender equality, humanitarian assistance, private sector development and social protection. We supported over 1,300 Australians to volunteer in the region to achieve sustainable development outcomes in priority sectors.

We published Aid Investment Plans for 25 country and regional programs in line with partner government priorities. The plans identify the focus of Australian assistance in each context. In fast-growing middle income countries we continued transitioning Australian support from development to mutually beneficial economic partnerships.

We delivered an estimated $3.723 billion of Official Development Assistance (ODA) and delivered strong results across all priority areas. The Performance of Australian Aid report for 2015–16, to be published in early 2017, will provide comprehensive information on results across the aid program.


Infrastructure, trade facilitation and international competitiveness

Our aid for trade investments, which span a number of sectors, comprised 16.5 per cent (an estimated $613.3 million) of the department’s ODA and prioritised regulatory reform to facilitate more efficient market processes in developing countries. We published the Strategy for Australia’s Aid for Trade Investments to guide our work in this area.

ODA tackled infrastructure bottlenecks to help create the right conditions for sustainable economic growth and enhance trade and investment opportunities across the region. Guided by the Strategy for Australia’s Investments in Economic Infrastructure, achievements included:

  • helping address the infrastructure financing gap in our region by investing in initiatives like the Global Infrastructure Facility and the Private Investment Development Group that aim to catalyse private investment in infrastructure in developing countries;
  • the Philippine Strengthening Public Private Partnership Program—a collaboration between governments, donors and the private sector which helped develop projects worth over US$4 billion; and
  • building a bridge over the Mekong river in Vietnam to open up a major new transport corridor, in partnership with the Asian Development Bank and Government of Vietnam.

Our estimated $219.8 million of ODA expenditure in this area supported livelihoods, increased food security, improved nutrition and strengthened water management among communities in our partner countries. Achievements included:

  • increasing agriculture and fisheries production in developing countries in our region by over US$58 million, including through activities that open up new markets and business opportunities;
  • assisting Pacific regional fisheries agencies to increase tuna revenues to over $350 million; and
  • working with the Government of Myanmar through the Australian Water Partnership to improve water management for the 40 million people who depend on the Ayeyarwady River.

We invested an estimated $642.2 million of our ODA to support enhanced governance in developing countries, including by building effective public sectors and functioning institutions that provide the foundations for economic growth, private sector investment and trade. We contributed to:

  • fair and broad-based tax systems, enabling quality public service delivery;
  • more transparent and accountable law and justice systems and stronger efforts to tackle corruption;
  • a range of national efforts to prevent violent conflict, including a new Joint Peace Fund to achieve lasting settlement of ethnic armed conflict in Myanmar; and
  • the establishment of the Pacific Leadership and Governance Precinct in Papua New Guinea.

The department invested an estimated $735.1 million of our ODA in improving the quality, access and equity of education in our region. Achievements included:

  • support for improved education system management, classroom teaching and the curriculum in Kiribati, leading to 78 per cent of year 4 students performing at or above the expected standard in 2015, up from 26 per cent in 2013;
  • 345,620 students (61 per cent girls) completed pre-primary education through the international development organisation, BRAC, an NGO in Bangladesh; and
  • 2,031 new Australia Awards in higher education.

We also invested an estimated $562.1 million of our ODA in the health sector, which included improving regional preparedness to respond to emerging health threats, water, sanitation and hygiene, and nutrition. Highlights of our support included:

  • expanded coverage of Health Equity Funds, the system that reimburses essential health care costs for over 2.9 million poor Cambodians; and
  • increased detection of tuberculosis cases in Kiribati, leading to improved treatment.

Our investment of an estimated $608.8 million of ODA in this priority area helped save lives and build community resilience in partner countries. We launched the Humanitarian Strategy and Strategy for Australia’s Aid Investments in Social Protection to strengthen the guiding frameworks for our support. Achievements included:

  • effective responses to more than 20 humanitarian emergencies across the Pacific, Asia, and the Middle East, providing approximately $329 million in life saving assistance, including deploying over 1,000 personnel to support the Fiji Government’s response to the impact of Tropical Cyclone Winston and providing an initial relief package of over $15 million for shelter kits and water and sanitation assistance to over 200,000 people; and
  • improvements to the Indonesian Government’s $5 billion per year social protection system, which covers approximately 100 million poor Indonesians.

Gender equality and empowering women and girls

We dedicated $1.96 billion of ODA to investments across the department’s aid program that included gender equality and the empowerment of women and girls as a principal or significant objective and released the Gender Equality and Women’s Empowerment Strategy. In particular, we:

  • accelerated our support for gender equality in the aid program, assisted by the new Gender Equality Fund ($50 million);
  • developed the Investing in Women Initiative aimed at increasing women’s economic participation in Southeast Asian economies; and
  • supported 14 Pacific nations to improve political, social and economic opportunities for women through the Pacific Women Shaping Pacific Development program.

The department also maintained its focus on the cross-cutting issue of disability inclusion and rights. We empowered people with disabilities as contributors to, and beneficiaries of, our aid investments.


Managing performance in the aid program

The department demonstrated effectiveness through implementation of the performance framework for the aid program.

In 2015–16, we undertook performance assessment at three levels:

  • whole of aid program level;
  • bilateral (country and regional) and global programs; and
  • individual aid investments.

At the whole of aid program level, the performance framework has 10 targets
to assess the effectiveness of the aid program and alignment with the Government’s policy directions.

At the program level, the approaches to performance assessment are tailored to the characteristics of different programs. For country and regional aid programs, we assess performance each year against program objectives in the Aid Investment Plans and publish these assessments in aid program performance reports (APPRs). APPRs also report on progress against program-specific performance benchmarks and mutual obligations. We published 26 APPRs covering 22 country programs and four regional programs. For global programs, we assess the performance of selected multilateral organisations which receive core funding from Australia against program-specific performance frameworks. We assessed seven multilateral organisations and found these organisations are performing effectively and their work aligns with Australia’s priorities.

The department assesses the performance of individual aid investments through an investment quality reporting (IQR) process comprising aid quality checks, end of investment reporting, partner performance assessments and aggregate development results. We also complete quality reporting annually for all aid investments and agreements valued at $3 million and higher. We reviewed the first year of implementation of the new IQR system, and made adjustments to improve the quality of reported performance information.

Aid quality checks measure performance across seven criteria. We assessed all eligible aid investments. Partner performance assessments review how well implementing partners (commercial contractors, NGOs, multilateral organisations) are delivering services against five standard criteria. We assessed 95 per cent of eligible aid agreements.

Performance information generated at the individual aid investment level feeds into assessments of program performance, which in turn provides the basis for assessing the performance of the aid program as a whole.

Strategic and operational independent evaluations complement the department’s systems of aid quality checks and performance reports. Operational evaluations are commissioned by staff with direct aid management responsibilities and generally review the performance of a single aid investment. Strategic evaluations are undertaken by the Office of Development Effectiveness (ODE) and involve a multi-country, thematic or sectoral examination of expenditure. The ODE, under the guidance of the Independent Evaluation Committee, also provides independent oversight of departmental aid performance assessment systems.

As part of the performance framework, the Government publishes an annual Performance of Australian Aid report. The third of these will be published in early 2017 and will summarise the performance of the Australian aid program in 2015–16.


Transparency

The department pursued high standards of transparency and accountability in the aid program. We published information on Australia’s aid program on our website, including Aid Investment Plans, thematic and sector strategies, a new interactive map showing the distribution of Australian aid and the annual statistical publication Australian Engagement with Developing Countries. We also published a range of performance-related documents, such as APPRs, program designs and evaluations. We provided estimated allocations for country, regional and global programs in a timely manner through the Australian Aid Budget Summary 2016–17. Australian investment-level aid data is made publicly available through international databases such as the OECD Development Assistance Committee Creditor Reporting System, the International Aid Transparency Initiative and the World Bank’s Open Data.

Results

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

The innovationXchange

Case Study
Assistant Director innovationXchange David Kelly discussing an upcoming innovation challenge. [VICKI SKARRATT PHOTOGRAPHY]
Assistant Director innovationXchange David Kelly (right) discusses an upcoming innovation challenge with Save the Children Senior Policy Adviser Majella Hurney, Sydney, 19 May 2016. [VICKI SKARRATT PHOTOGRAPHY]

The innovationXchange

The innovationXchange (iXc) has a mandate to forge new partnerships and to experiment in the delivery of aid through a pipeline of innovative projects. Partners of the iXc include Google, Intel, Bloomberg, CSIRO, Monash University, SecondMuse, USAID’s Global Development Lab and Results for Development, and private sector fund managers. A core principle for the iXc is to invest in higher risk, higher potential impact initiatives, such as those which seek to use new technologies or scientific findings for transformational impact. The iXc also seeks out innovations which have the best opportunity for cost-effective development impact through sustainable business models.

The iXc entered into a partnership with Bloomberg Philanthropies for a data-for-health program to transform the availability and quality of health data so scarce public and private resources can be better targeted at emerging health crises. The program is working with 18 countries, including in the Indo–Pacific. The iXc is working with other major donors through a Global Innovation Fund to support new ideas such as using ICT breakthroughs to screen babies for infections using new but affordable and accessible technologies.

The iXc is currently testing the frontiers of what marine scientists and entrepreneurs can achieve in the Indian Ocean with our Global Blue Economy Challenge focused around sustainable aquaculture. We are also initiating an ambitious impact entrepreneurship and financing agenda to equip local innovators and entrepreneurs in developing countries with the skills, networks, capital, and access to markets required to make their businesses viable, investable and scalable.

The iXc is partnering with USAID’s Global Development Lab on LAUNCH: Food Revolution to leverage new partners, resources and solutions to address malnutrition and non-communicable diseases caused by dietary factors. It is also working with the Lab and the Republic of Korea on the Global Innovation Exchange—an online platform which enables hundreds of organisations globally to share information on innovations and match available finance with innovation proposals. This platform already has over 100 contributors, featuring more than 4,300 innovations and enables connections with over 9,000 collaborators globally.

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

Strengthening Australia’s response to protracted humanitarian crises

Case Study

The department progressed implementation of recommendations from two evaluations by the Office of Development Effectiveness—the Evaluation of Australia’s response to the Horn of Africa humanitarian crisis and the Evaluation of Australia’s humanitarian response to the Syrian crisis. The evaluations acknowledged Australia’s leadership role in both crises but also identified areas where responses to protracted humanitarian crises could be enhanced.

Decision-making in humanitarian crises is often complicated by a paucity of information, insufficient human and financial resources and multiple competing priorities. The evaluations recommended that the department be clearer in its strategic intent when responding to similar crises in the future, and that it consider establishing a dedicated, multi-year program fund for Syria.

The department subsequently adopted a more strategic multi-year approach to protracted crises to better articulate policy, sector and funding priorities, and deepen partnerships with host governments and key humanitarian agencies. We developed a strategy to guide Australia’s funding for the Syria humanitarian response which included a three-year $220 million allocation announced in the Budget on 3 May 2016.

The evaluations highlighted the value of having skilled and experienced personnel on the ground. We deployed a humanitarian officer to Jordan and Lebanon to help design the new aid package for Syria and monitor Australian-funded activities. A number of additional humanitarian positions in the region are also being considered.

The evaluations identified the need for improvements in accountability and transparency and the sharing of lessons learned. The department’s new Humanitarian Strategy emphasises monitoring and evaluation, including by partners. It also commits the department to share insights and data with all stakeholders, including beneficiaries.

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

Civil Society Water, Sanitation and Hygiene Fund

Case Study
DFAT aid funding helped train Mr Nguyen, a concrete ring producer and mason in Vietnam. [INTERNATIONAL DEVELOPMENT ENTERPRISES/Quang V. Nguyen]
DFAT’s Civil Society WASH Fund supported International Development Enterprises to deliver technical and business training to Mr Nguyen, a concrete ring producer and mason from Trung Thanh Commune, Nghe An Province, Vietnam. [INTERNATIONAL DEVELOPMENT ENTERPRISES/Quang V. Nguyen]

Civil Society Water, Sanitation and Hygiene Fund

The department’s Civil Society Water, Sanitation and Hygiene (WASH) Fund enhanced the health and quality of life of the poor and vulnerable by improving sustainable access to safe water, sanitation and hygiene. We will spend $103 million over four years to 2018, working with civil society organisations to implement projects in 19 countries in the Pacific, Asia and Africa.

Adequate water, sanitation and hygiene are preconditions to good health and are fundamental to supporting sustainable economic growth and human development. Through our activities to date, over 497,000 people have gained access to improved sanitation, over 103,800 additional people have safe water, and 1.2 million people have increased knowledge of hygiene practices.

The fund prioritised our engagement with the private sector. In Vietnam, Laos and Cambodia, we incentivised local governments and the private sector to work together to improve household sanitation standards. In Papua New Guinea, Fiji, Vanuatu and Solomon Islands, the fund supported the establishment of community-based enterprises for sanitation.

Through the fund, we partnered with Australian and international civil society organisations and promoted shared learning to improve water, sanitation and hygiene practices. We supported an Innovation Award to promote new approaches in the water, sanitation and hygiene sector, which was presented at the Australian-sponsored WASH Futures Conference in May 2016 in Brisbane.

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

The Pacific Humanitarian Challenge: Rethinking Disaster Response

Case Study
Participants in the Pacific Humanitarian Challenge run by the innovationXchange test new methods of communication. [SECOND MUSE/Darvar Ardalan]
The innovationXchange tests new methods of communicating to engage a global community of innovators during the Pacific Humanitarian Challenge, reaching almost 200,000 people through live streaming interviews from the event, broadcasting on DFAT’s YouTube channel and harnessing social media, 29 March 2016. [SECOND MUSE/Darvar Ardalan]

The Pacific Humanitarian Challenge: Rethinking Disaster Response

The Pacific Humanitarian Challenge marked a new approach for the department in sourcing solutions for problems inherent in responding to disasters in the region. We wanted ideas on how to deliver humanitarian assistance more effectively following a disaster and build the resilience of vulnerable and often remote communities. We posed three broad challenges:

  • How do we assess and communicate the needs of affected communities more efficiently;
  • How do we improve logistics to respond to those needs more effectively; and
  • How do we build financial resilience to accelerate recovery?

The department considered 129 potential solutions from entrepreneurs, NGOs, innovators and researchers from 20 different countries. The winning innovations were:

  • communicationsan easily deployed unmanned aerial system, a drone imagery dashboard and infrastructure-independent mobile communications
  • logistics—a local supplier engagement project
  • financial resilience—affordable mobile insurance.

The challenge process was a success and demonstrated that by incorporating new ways of working, the department can effectively and cost-efficiently access a global pool of ideas and approaches with greater impact for disaster-affected communities in our region. We are now preparing for the next global challenge and also considering ways in which affected communities can benefit further from this new community of practice in disaster response. Additional information on the winning ideas is available at http://pacifichumanitarianchallenge.org/

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

Australian NGO Cooperation Program

Case Study
A recipient of DFAT’s Australian NGO Cooperation Program vocational training to in Afghanistan. [WORLD VISION AFGHANISTAN/Narges Ghafary]
The department’s Australian NGO Cooperation Program funded vocational training for Masoma, who has congenital hearing and speech problems, Afghanistan. [WORLD VISION AFGHANISTAN/Narges Ghafary]

Australian NGO Cooperation Program

Established in 1974, the Australian NGO Cooperation Program (ANCP) is the department’s longest running funding program for NGOs. Our annual grants program ($127.3 million in 2015–16) provided funding to 53 accredited Australian NGOs to support community development in over 50 countries.

ANCP NGOs helped the department progress several aid priorities, including gender equality, innovation, disability-inclusive development and private sector engagement.

Through the ANCP, we effectively promoted gender equality at all levels but particularly with communities. For example, the International Women’s Development Agency working with Palaung Women’s Organisation in Myanmar operated four Women’s Crisis and Resources Centres. It also raised awareness on gender based violence and trafficking.

Australian NGOs trialled a range of innovative approaches to development. Motivation Australia worked with the Spinal Injuries Association in Fiji to provide wheelchairs that were designed specifically for areas with limited disability access. Motivation Australia supported design development and feedback on their use in Fiji to the global organisations supplying these products.

CARE Australia worked with the department to advance private sector partnerships. In Malawi, CARE partnered with banking institutions and mobile service providers to improve access for Village Savings and Loan Associations to formal financial services. This established formal linkages with banks to increase access to credit for business growth. In Laos, CARE linked commercial traders with coffee producers to increase the quantity and quality of Arabica coffee produced. Building partnerships that connect producers and commercial traders facilitates trade cooperation and promotes environmentally sustainable opportunities for investment.

Analysis and outlook

The department’s aid program is implemented in varied and challenging environments. While many countries in Asia experienced relatively strong economic growth contributing to positive development outcomes, this was not uniform across the Indo–Pacific region. We ensured the aid program responded to these changing contexts. We continued transitioning to economic partnerships in parts of Asia and adopted new development partnerships with Pacific Island countries. With the adoption of the 2030 Agenda for Sustainable Development, there is a growing recognition of ODA’s diminished importance compared to other sources of development finance. Accordingly, the department has identified measures to increasingly leverage non-ODA sources of finance for development, such as domestic taxation.

We further consolidated the aid program in line with budget reductions and performance targets relating to individual investments and geographic focus. Australian Volunteers for International Development continued to deliver an effective program with strong development and public diplomacy outcomes across the sectors in 29 countries in the Indo–Pacific.

Our Aid Investment Plans, together with the new strategies around key investment priorities, publicly demonstrate how we are implementing Australia’s development policy objectives. We will continue to improve the timeliness and quality of publicly available information on the aid program.

We will continue to support stability and enabling environments for investment and growth in partner countries, while adapting to the changing development landscape. Promoting economic growth that is inclusive and benefits women and girls will remain a priority. Our region will continue to experience crises and long term development challenges that require collaboration and multi-faceted approaches, such as combatting transnational health threats. We will remain innovative and responsive to partner needs, focusing on where our efforts and expertise can have the greatest impact.

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