Development Policy Centre at the Australian National University gave a very nice presentation on the future of Australian aid at the Conference on the Future of International Development in Asia and the Pacific.
Put simply, his thesis is (1) don't forget aid in Asia, (2) move beyond aid in the Pacific.
In Asia, aid is not part of the Australian narrative of growing economies that can take care of themselves. Aid was barely mentioned in last year's White Paper on Australia and Asia. But as Howes points out, hundreds of millions of people still live below $1.25 a day in even the fastest growing countries (and $1.25 is a very low threshold to begin with). India, China and Pakistan may be classified as low middle income countries, but they are poor and very large proportions of their populations are poor. And they will experience climate variability and a wide range of shocks that make development fragile. In these countries, although aid is a very small resource, it is highly flexible and can be focused on removing impediments to development. For these countries, aid can be a lubricant in big clanking economic growth machines, to make sure these machines work in a more broad based, sustainable and poverty reducing way and do not get too buffeted by shocks. A new aid narrative has to be found for these countries, one that supports the wider narrative of new relationships between Australia and Asia.
In the Pacific, aid dominates the discourse. Aid is too often put forward as the answer to problems and it is a bargaining chip in most interactions. This focus is crowding out other instruments focused on trade and other forms of collective action. The Pacific nations are too small to survive on their own, they need to work more collectively and Australia can facilitate that.
The Australian relationship with the Pacific needs to move beyond aid, and the relationship with Asia needs aid to move beyond aid.
It is clear that Australia's regional co-location with many of the countries it gives aid to makes it unique among DAC donors. Aid needs to be integral to its overall growth policy--it cannot so easily separate aid from the rest of government activity. Other donors would like to have a whole of government approach, but don't have the same imperatives.
More and more I think we will be looking to Australian aid policy as a window on what aid will look like for other donors in the 21st century. We need to learn from Australia's experience.