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China, aid and the gift of interdependence

  • 19 April 2018


In recent months comment on international politics has been about taking sides, making stands and falling into line. National self-interest is taken to imply aligning yourself with or against the United States or China on trade, Great Britain or Russia on poisoning, and Syria, the United States, Iran, Israel, Russia or any combination of them in Syria.

Against such strident calls to be counted or counted out, two isolated and apparently unrelated pieces of speculation in the Australian press passed with little response. The ritual leaks designed to test public opinion before the next federal budget included the prediction of a further cut to overseas aid. A little later it was also asserted, and quickly denied, that China wanted to establish a military base in Vanuatu. The news briefly stoked already anxious speculation about China's threat to Australia.

The conjunction of these two items invites us to ask whether the prevailing 'realistic' judgment that in its relationships with other nations Australia should always put Australia first, and look only to its national self-interest, is actually realistic. Might cuts in foreign aid on the grounds that they have no strategic importance, for example, have unforeseen consequences in international relationships that will disadvantage Australia? Vanuatu's recent relationship with China does not provide evidence for this conclusion, but adds weight to the question.

The proportionate decline in overseas aid under the Coalition government has been noticeable since the traditionally Liberal governments of Robert Menzies and Malcolm Fraser. The decline has been precipitous under the current Coalition Government, amounting to one third in real terms since the election of the Abbot government in 2012.

The principle that governed the awarding of foreign aid has been to give priority to Australian national interests rather than to the needs of the recipients. Accordingly aid to Africa, Asia and the Middle East was savagely cut.

The Pacific region, however, was spared these cuts because the Australian government recognised that Australia has a strategic interest in the region, particularly at a time when Chinese military and economic power and influence have grown. Australia is the biggest contributor of aid funding to the region and wishes to be the partner of choice to the nations of the region.

At first sight the willingness of Vanuatu to accept a Chinese offer to build and perhaps to expand a wharf on the Island of Espiritu Santo argues that giving aid in order to influence the recipient nation's policy is