Australian Politics

The Necessary Value of Foreign Aid

Alex McKenzie argues in favour of Australia maintaining a strong foreign aid program, highlighting the importance of promoting Australian values and strategic interests.

This article was first published in our 2018 print edition.

At a time when our farmers are struggling and many areas of the country are in drought, domestic issues take centre stage. The Australian dream is centred around the idea of a ‘fair go’, and for this reason many Australians begin to critique our foreign aid program.

Indeed, during the drought in eastern Australia earlier this year, nationalist sentiments began spreading rampantly across social media platforms.1 Such stories and memes, which are not necessarily substantiated, have critiqued the extent of Australia’s foreign aid during a time when our farmers are suffering. Many have considered this to be unfair, and have called for this money to be redirected to struggling Australians. Such ideas are perfectly understandable in times of crisis and struggle. However, it cannot be understated that Australia’s foreign aid is more than just giving away money. It is an inherently strategic investment in the promotion of Australian values.

Australia has one of the world’s most generous foreign aid budgets. For 2018-2019, $4.2 billion has been allocated to development assistance, with $1.3 billion of this amount directed to the Pacific region.5 This is in line with Coalition government policy in recent years, which has seen the overall foreign aid budget significantly reduced, yet alongside this reduction a greater proportion of the budget has been re-allocated to the Pacific. This reflects the strategic value placed on the Pacific island region and the prime role that foreign aid plays in advancing Australia’s interests overseas.

Of course, the foreign aid program of any nation is motivated by strategic interests. The phrase “there’s no such thing as a free lunch” is particularly relevant in considering how foreign aid is utilised as a geopolitical tool. But in times when the existence of a foreign aid budget is critiqued by members of the public and even some parliamentarians, it is imperative to emphasise the strategic necessity of foreign aid.14

Australia is the pre-eminent state actor in the Pacific region. Referred to by former prime minister John Howard as ‘our patch’, in the Pacific, Australia still plays the hegemonic role. In the ten years 2006-2016, Australia committed $US7.7 billion in the Pacific; the largest of any donor. Trailing Australia was the United States, and in third place was China, who have contributed $US1.78 billion in the same period.7 China has been advancing its presence within our backyard in recent years, in line with its goals of exerting greater influence elsewhere around the world.

An often criticised feature of China’s foreign aid is so-called ‘debt-trap diplomacy’, which can be seen in Sri Lanka. The Hambantota Port was a development funded primarily by China. The China Merchants Port owned 85% of the project, with the remaining 15% owned by the Sri Lankan Government.10 Sri Lanka was subsequently unable to repay the loans it had used to fund construction of the port, and had little choice but to subscribe to the desires of the Chinese. China now maintains a 99-year lease over the Sri Lankan port.12

This acquisition has sparked fears that many of China’s international development initiatives may just be carefully hidden ways of acquiring key infrastructure around the world. Indeed, President Xi Jinping’s ‘One Belt One Road’ initiative highlights China’s ambitious goals of spearheading massive international investment and construction. The Australian government is conscious of the threat posed to its hegemonic status in the Pacific island region by China’s expansive aid and development projects, and the potential for such key infrastructure to eventually be ceded to China as part of debt relief measures.

Earlier this year, the Chinese telecom company Huawei was refused landing rights in Australia for a communications cable it was planning to connect between the Solomon Islands and Australia. The government cited national security concerns, and DFAT then stepped in to cover half of the Solomon Islands’ costs for a new cable to be constructed without Huawei and now with Australia’s approval.2 China’s growing influence in the region highlights our need to stay true to our western, liberal democratic values, and to be a source of such values in this region.

Although having just critiqued the debt-trap diplomacy tactics of China’s foreign aid practices, it’s important to acknowledge the complexities surrounding the issue, and the good that China is also doing. Earlier this year, Australian senator Concetta Fierravanti-Wells claimed that China’s aid constructed “useless buildings” and “roads to nowhere”.3 This comment received strong criticism from the Chinese government and Chinese state-owned media outlets. Such comments may carry some truth to them, but they aren’t particularly helpful in advancing Australia’s interests in the region, or at promoting cooperation with the Chinese.

Instead of merely critiquing China’s aid program, we should also be seeking ways to work alongside the Chinese to deliver suitable aid to this region. China’s aid can and does lead to benefits for recipients, as in the case of Samoa where Chinese aid “has in general met the expectations and demands of the recipient government and civil service”.6 However in other countries such as Tonga and Vanuatu, Chinese aid has led to “less positive” outcomes.8 In addition, a great deal of the success or failure of Chinese funded initiatives depends on the “actions of Pacific Island Governments”.8 In other words, China doesn’t force these governments to sign on to their programs. These governments still exercise autonomy in their decision to agree to these projects.

The senator’s comment also highlights what we must not do: criticise without acknowledging our own shortcomings. An article in the Vanuatu Daily Post this year responded to the comment that China’s roads ‘lead to nowhere’, by stating bluntly that they do lead somewhere: “they lead to our homes”.13 The article then further critiqued a past Australian road project, labelling it a “laughing stock”. Perhaps most poignantly, the article ended with this recommendation: “If Australia is serious about helping, it should do more, do it better, and gripe less.”

Australia’s economic ties with China are important, but when it comes to value alignment, there is no question that Australia sides with a US-led global order which strives to maintain a ‘free and open Indo-Pacific’.9 Our role in the Pacific is not to force China out of the region, nor to paint China as the enemy. Rather, Australia’s role should be to provide a choice, an alternative option for Pacific Islands seeking aid and cooperation to that of China’s often “opaque” infrastructure development programs.11 Australia’s development assistance in the Pacific is focused on four main objectives including economic growth, effective regional institutions, healthy and resilient communities and the empowerment of women and girls.4 DFAT states that they prioritise programs that are “effective, deliver positive change and address priorities identified by Pacific island governments”.4 This shows that Australia’s aid program is designed to support the sovereignty of recipient countries while still improving their economic competitiveness and the welfare of ordinary people.

When thinking about the Australian dream, one is reminded of fundamental values such as fairness, egalitarianism and freedom. These values are reflected in our common slang through iconic phrases such as ‘fair dinkum’ and ‘true blue’. The idea that everyone deserves a ‘fair go’ is so heavily ingrained in the national psyche that it is often taken for granted. If foreign aid is at its core simply a tool of international diplomacy, then it is essential that we use our foreign aid to promote these decent and good values, particularly in our own backyard. Debt-trap diplomacy, as practiced by China, threatens the sovereignty of small Pacific island countries. Australia’s values of fairness, egalitarianism and freedom directly conflict with the practice of debt-trap diplomacy. It is just, for Australia to act peacefully yet sternly critique the opaque development programs run by China.

Australia wants to be seen as a country that is kind, benevolent and helpful. We want to show countries in the Pacific that a relationship with Australia is mutually beneficial. We, as citizens, should want to be seen as a positive power that stands up for the fundamentally important values of freedom, democracy and a ‘fair go’.

If China is left as the only major source of aid in the Pacific, this is not good for the regional promotion of liberal democracy. For the entirety of our existence as a nation, Australia has been an avid advocate of a free society. Our involvement in the Second World War alongside the Americans saw us liberate the Pacific region from the grip of imperialist Japan. We have a moral duty to remain a free leader in the Pacific. In order to effectively lead, we need an effective foreign aid program.

Australia’s foreign aid budget is necessary and justified. As attractive as it may be to give in to nationalist sentiments and the true, bitter reality our farmers are facing, it would be irresponsible for a middle power and regional hegemon such as Australia to eliminate its foreign aid program. The drought is a horrible situation, but there will always be significant problems at home. That fact does not justify limiting or eliminating foreign aid.

We are lucky enough to live in one of the most prosperous nations on earth and we are privileged to enjoy the fruits of a free society. We live in a time where the free and open international order we benefit from is increasingly threatened by authoritarianism and nationalism. It is important for us, for Australia, to promote the Australian dream which at its core is a ‘fair go.’ We want to give Pacific island governments the option to have a ‘fair go.’ We want to give Pacific residents the opportunity to have a ‘fair go.’ We should even give Chinese aid initiatives a ‘fair go’ in the grand scheme of things. But we cannot give anyone a fair go if we don’t have an international presence through a robust and comprehensive foreign aid program.


1ABC News 2018a, ‘Australia’s foreign aid budget called into question when farmers face drought’,

2ABC News 2018b, ‘Deal to be inked for Solomon Islands undersea internet cable Australia stopped China building’,

3CGTN 2018, ‘Chinese envoy hits back at Australian criticism of Pacific aid’,

4Department of Foreign Affairs & Trade n.d., ‘Overview of Australia’s Pacific Regional aid program’,

5Department of Foreign Affairs & Trade 2018, ‘Australian aid budget at a glance’,

6Dornan & Brant 2014, ‘Chinese assistance in the Pacific: agency, effectiveness and the role of Pacific Island governments’, Asia & the Pacific Policy Studies, vol. 1, no. 2, pp. 349-363.

7Lowy Institute n.d., ‘Chinese aid map’,

8Lowy Institute 2018a, ‘The bad – and good – of China’s aid in the Pacific’,

9Lowy Institute 2018b, ‘A “free and open Indo-Pacific” and what it means for Australia’.

10New York Times 2018, ‘How China got Sri Lanka to cough up a port’,

11Sydney Morning Herald 2018, ‘Australia will compete with China to save Pacific sovereignty, says Bishop’,

12Times of India 2018, ‘Inside China’s $1 billion port in Sri Lanka where ships don’t want to stop’,

13Vanuatu Daily Post 2018, ‘Postcard from the ‘Road to Nowhere’’,

142GB 2018, ‘Pauline Hanson has grave concerns over use of foreign aid’,


Cover image from DFAT (via CARE).

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