1. AUSTRALIAN AID: PROMOTING GROWTH AND STABILITY

2. A commitment to aid volume…. Prime Ministers announcement at UN Summit in September –Doubling to $4 billion by 2010 –Conditional on strengthened governance, anti-corruption efforts and aid effectiveness

3. Outline of the White Paper 1)Introduction 2)Operating environment, values and interests 3)Strategic framework 4)Where Australia will work, and why 5)What the aid program will focus on 6)Strengthening effectiveness 7)Aid management AUSTRALIAN AID: PROMOTING GROWTH AND STABILITY

4. Average annual GDP per capita growth in the Asia–Pacific region, 1995 to 2004

5. Operating Environment Major reductions in poverty in Asia Pacific But…. –significant disparities between and within countries –existing challenges intensifying, new challenges emerging –high absolute number of poor –a region of developing countries, many are fragile (e.g. Solomon Islands, PNG, East Timor), and Indonesia

6. Development lessons Economic growth central to poverty reduction Countries that have integrated grow faster than those that have not Growth by itself not sufficient – needs to be sustained and shared Institutions matter Each countrys path is different Aid only small part of the development equation Poor aid can do harm Need new approaches to fragile states.

7. Strategic Framework Objective Asia Pacific focus Overarching principles of gender equality, fully untied aid and partnership

8. AUSTRALIAN AID: PROMOTING GROWTH AND STABILITY

9. Thematic Initiatives Growth – infrastructure : ideas and funding. States - incentives for good performance up to 10% of total aid budget over time. People – major scaling up of health, focussing on women and children, and education to get more children into school for longer and a better education. HIV/AIDS, pandemics, malaria. Regional stability – regional responses to transboundary threats.

10. Effectiveness Office of Development Effectiveness and Annual Review linked to budget cycle Output based aid Country strategies covering all ODA, performance frameworks and link to allocations Anti-corruption Australian engagement – research, linkages Partners: delegated responsibility, leveraging multilaterals

11. External communication is a critical function to support aid effectiveness It does this in two main ways: 1.As a critical component of development activities: to inform, educate and assist in changing behaviour 2.Informing taxpayers and aid recipients about our aid program. The risks of not communicating: 1.Our aid is less effective 2.We lose public support and therefore political support.

12. Conclusion Geographic flows: rebalancing to Asia from Pacific Not just more aid Different way of doing business for AusAID and other Australian agencies Greater focus on effectiveness, less contracting out More rigorous approach to corruption Greater use of partner government systems and processes Very different aid program and agency in 2010, more effective, more transparent and more integrated.