Performance of Australian Aid 2015–16 May 2017



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An evaluation by the Office of Development Effectiveness (ODE)31, released in May 2016, assessed the effectiveness of Australia’s recent investments supporting trade facilitation and regional trade agreements to find out how Australia’s investments may be better targeted in the future. The evaluation found that DFAT investments in trade facilitation have been effective in addressing capacity issues, have the potential to make significant impacts on poverty reduction, and contain many elements of good global practice. Australia’s trade facilitation investments were found to have assisted partner countries in Asia and the Pacific to better integrate with regional and global economies. Overall, the investments have been effective in addressing capacity issues across a diverse range of areas, with the flexibility in designs enabling programs to be responsive and well-targeted. 

Nonetheless, the ODE evaluation identified a number of improvements that can be made, including a stronger focus on promoting gender equality and women’s economic empowerment. DFAT acknowledges that aid for trade investments have historically performed poorly on incorporation of gender considerations. This is a common issue across other donor programs due to an historical lack of expertise in the area. The department is making significant progress in the intersection of aid for trade and gender, and exploring good practice and lessons learnt, including opportunities to incentivise partners (partner government agencies and aid program deliverers) and donors to undertake practical steps to address gender inequalities. The Aid for Trade Strategy highlights women’s economic empowerment as a priority area for aid for trade investments. The Strategy aims to incorporate a gender equality objective in every aid for trade investment to help ensure that Australia’s aid for trade target can be achieved simultaneously with the target on gender equality. Recent aid for trade investments have strengthened their gender considerations, and some include a specific focus on women’s economic empowerment.

Overall, investments in the infrastructure, trade facilitation and international competitiveness investment priority had performance results higher than the whole-of-aid program average for all quality criteria with the exception of gender equality (Figure 27). While lower than the aid program average, performance on gender equality improved with the proportion of investments rated as satisfactory or above rising from 64 per cent in 2014-15 to 76 per cent in 2015-16.


Australia’s approach to aid for trade 


Australia’s aid policy puts a strong emphasis on aid for trade. Aid for trade helps developing countries address internal constraints to trade, including regulations, infrastructure and workforce skills. Trade is crucial to creating an enabling environment for economic growth and development. No country has achieved high and lasting growth without participating in international trade. The OECD and WTO estimate that one dollar of aid for trade investment is associated with an increase of eight dollars in additional exports32. 

The Strategy for Australia’s Aid for Trade Investments was released in July 2015 and encourages innovation, including by partnering with the private sector and promoting market-based solutions. Australia’s aid for trade priorities include trade and investment policy and trade facilitation, global value chains, infrastructure, private sector development, economic empowerment of women, knowledge and skills development, agriculture, and services. 

As outlined in Chapter 1, the Australian Government has set itself a target of increasing aid for trade expenditure to 20 per cent of Australia’s aid budget by 2020. The target positions Australia as a key provider of aid for trade in line with other major donors. Australia is on track to meet this target — in 2015-16 estimated expenditure on aid for trade represented 17.3 per cent of Australia’s Official Development Assistance, up from 16.4 per cent in 2014-15. 

Aid for trade supports the aid program’s key objectives of reducing poverty and lifting living standards through sustainable economic growth. The role of trade as an engine for economic growth and poverty alleviation is recognised by the global development community — aid for trade is embedded in the UN Sustainable Development Goals. 

Australia categorises its aid for trade investments under the broad headings of trade policy and regulations, economic infrastructure, and building the capacity of the private sector. This is in line with the OECD’s definition, which is also followed by other major donors. 

Australia’s aid for trade investments are made through multilateral, regional and bilateral channels. The bulk of aid for trade funding is provided through bilateral country and regional programs. Australia’s multilateral aid for trade flagship, the Global Trade Integration Facility (GTIF) is designed to support multilateral and regional investments that help developing countries in the region to participate in global trade. Examples of Australia’s aid for trade investments under the GTIF include: 

• building the capacity of 600 women entrepreneurs in the Pacific (Papua New Guinea, Vanuatu and Samoa) to establish womens export co-operative associations to help access to new international and regional markets for selling their products (e.g. the Bilum Export Promotion Association in Papua New Guinea)

• partnering with the World Intellectual Property Organization and local civil society actors, to provide educational and reading materials in accessible formats, such as braille, audio and large print to the visually impaired and blind in Bangladesh and Sri Lanka. A project in Bangladesh, for example, is training a local organisation to produce accessible educational materials in Bengali, and teaching blind students to use reading devices; and



• supporting the International Labour Organization to expand the Better Work Programme in Indonesia, Cambodia, Vietnam and Bangladesh. The Better Work Programme helps improve labour standards and reduce gender discrimination in garment factories in developing countries, in partnership with the private sector.  



Agriculture, fisheries and water


In 2015-16, Australia invested an estimated $305.7 million or 7.6 per cent of ODA in the agriculture, fisheries and water sectors to help improve food security and sustainable use of resources in the IndoPacific region. Figure 28 shows the areas of expenditure for this investment priority in 2015-16.

Figure 28: Agriculture, fisheries and water areas of expenditure, 2015-16

Figure 28: Agriculture, fisheries and water areas of expenditure, 2015-16
In line with the Australian Government’s Strategy for Australia’s aid investments in agriculture, fisheries and water (released in February 2015), investments in these sectors aim to strengthen markets, innovate for productivity and sustainable resource use, and promote effective policy, governance and reform among Australia’s developing country partners. 

These sectors make a major contribution to sustainable economic growth and poverty reduction efforts in the region. Australia’s assistance is directly supporting several of the SDGs including Zero Hunger (SDG2), Clean Water and Sanitation (SDG6), Life Below Water (SDG14) and Life on Land (SDG15). 

With support from the Australian aid program in 2015-16, over 443,000 poor men and women (at least 54 per cent women) adopted innovative agricultural and fisheries practices. Across the region, 1.3 million women and men (at least 79 per cent women) have increased access to financial services, and over 589,000 women and men (at least 60 per cent women) have increased incomes as result of Australia’s aid investments in these sectors.

During 2015-16, to give practical effect to the strategy, Australia pursued a diverse portfolio of global, regional and country-level investments. At the global level, Australia assumed the chairing role in September 2015 for AgResults. This innovative G20 initiative is driving private sector-led agricultural development, research and delivery for smallholder farmers by rewarding businesses for achieving development results, such as low-cost on-farm storage. At the regional level, in collaboration with the World Economic Forum and the ASEAN Secretariat, Australia continued its support for the fledgling agribusiness partnership platform, ‘Grow Asia’. Results include the establishment of 36 new commodity value chain initiatives across five countries, benefiting almost 500,000 smallholder farmers.

At the country level, through a number of its existing agricultural investments, Australia worked closely with the private sector and research organisations, including through the Australian Centre for International Agricultural Research (ACIAR), to help small-scale farmers and entrepreneurs, particularly women, to improve productivity and access markets. A mid-term review of the multi-country Market Development Facility (MDF) in late 2015 recommended that this program be extended into a second phase (commencing in mid-2017) based on its strong results to date. Since its launch in 2011, MDF has generated additional incomes that have benefited over 42,000 poor men and women.

In fisheries, Australian core funding for the key regional fisheries organisations in the Pacific – the Pacific Islands Forum Fisheries Agency and the Secretariat of the Pacific Community – support multi-year strategies to safeguard tuna resources and increase economic returns to Pacific Island countries. Australia invested around $15 million in the sector in 2015-16. This funding includes support to improve community-based fishery management and aquaculture in a number of Pacific Island countries, to improve food security and ensure long-term sustainability. Australian support is also assisting Pacific Island countries to implement the Niue Treaty Subsidiary Arrangement, which will help combat illegal fishing and improve legal and governance arrangements. 





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