Foreign Trade Essay

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Foreign Aid
Foreign Aid is a transfer between a developed country (donor) and a developing country of money, skills/services or resources. There are five main forms of foreign aid: tied aid (where the aid comes with strict terms decided on by the donor), Un-tied aid (where it is up to the receiving country to allocate uses for the aid), Food Aid, Technical Assistance and Emergency Aid (Also known as crisis aid; given to a country experiencing a disaster such as war or an earthquake). Countries give foreign aid to support their national security, to gain power, to improve bio security and to support fellow humans in need. In Australia, whilst our government gives foreign aid, it is more often than not one of the first areas cut in every budget by both sides of politics; with Abbott’s $7.6 billion dollar cut over the next 5 years being the latest. However, whilst our government’s aid budget shrinks, around 2 million Australian households donate to NGO aid programmes every year- one of the highest private donor rates in the world.
Australia is a part of the Asia Pacific Region. Being the richest country in the area, it is unsurprising that it is also the largest donor across the region with around 20 percent of our national aid budget being invested within it. In 2013-2014 we spent $1.1 billion in Aid on programmes and building regional institutions that aim to keep the region safe, secure and prosperous (i.e.- our peace keeping programs in Timor Leste, the Solomon Islands and the Autonomous region of Bouganville). Most of this money went towards Papua New Guinea and Indonesia where our bilateral ties are strongest. In keeping the region stable, we are also supporting our own national interests and investments.
The Australian department of Foreign Affairs and Trade claims that “the fundamental purpose of Australian Aid is to help people over come poverty.” The UN has recognised that poverty is shared problem and Australia, as a part of the UN recognises that we must do something about it. Our aid budget goes towards health, education, humanitarian, economic development and governance programmes that are all in place to help reach a world goal of ending poverty and empowering smaller nations like our pacific neighbours. In the Solomon Islands Australian Aid has helped reduce malaria by 75 percent, and assisted 330,000 children in Indonesia attend school by building over 2000 school there.
Australia’s strongest tie to aid in the region is PNG; a country that was in fact a part of Australia up until 1975 when it received independence. We are the source of around 70 percent of the total ODA (overseas development assistance) to the country. PNG has poor governance as it is a nation of small communities scattered over rugged terrain with very poor infrastructure and education systems. Being our closest neighbour, it is in the best of our national interest to maintain a level of stability there to ensure their support in the safety of our own borders and bio security. By having a strong influence in PNG, we are reducing influence from other countries that, at an extreme; could lead to an invasion threat.
Australia is also involved in various Aid for Trade initiatives in the region. Aid for Trade is where a donor country helps a developing nation develop a stronger economy by helping them to build infrastructure that allows the nation to utilise its resources for international trade. An Aid for Trade agreement usually come tied with certain trading agreements determined by the donor country. One of Australia’s Aid for Trade initiatives in the pacific was training farmers to improve their production processes in order to meet international market requirements. The Australian government spent $692 million on Aid for Trade in 2012-2013.
The advantages of giving aid to other nations as a wealthy country far outweigh the disadvantages. Because of our influence in helping multiple countries in our region through aid and trade
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