Foreign aid

Indian and Australian aid programs to the Pacific: Opportunities for trilateral aid cooperation

India and Australia can work together to address the clear and present danger of climate change in the Pacific Islands through trilateral aid partnerships, writes Hemant Shivakumar

An edited version of this article appeared here

After the Indian Prime Minister Modi announced India’s big-ticket foreign policy reform – the Act-East Policy – in 2014 at Myanmar, he travelled further east to visit Fiji. Figuratively, it was a fitting statement of intent: flying to the easternmost part of the globe to give shape to his words where he pressed for deeper development partnerships between New Delhi and India’s hitherto neglected Pacific neighbours.

Development assistance partnerships have emerged as recognizable tool in Indian foreign policy thinking. The volume of Indian assistance has grown since the turn of the century – rising seven-fold to rival and surpass many OECD-DAC donors. Modi’s renewed commitments to the Bainimarama regime in Fiji and to the other Pacific neighbours signal the use of development partnerships in India’s renewed engagement with the Pacific. However, as an emerging donor, India’s aid history to the Pacific Islands is relatively new.

Soon after New Delhi was inducted as a dialogue partner into the PIF forum in 2002, the Indian republic announced a grant-in-aid of US$ 100,000 to each of the PIF nations to be used towards socio-economic development. During the visit of the Minister of State for External Affairs E.Ahamed to Cook Islands in 2012, this grant was raised to US$ 125,000 and subsequently increased to US$ 200,000 during Modi’s visit in 2014. In addition, New Delhi’s credit lines through the EXIM Bank have helped build a decade-long partnership towards industrial development of the Fijian sugar businesses.

Rising commitments aside, India’s aid volumes fall well behind behind the other major donors in the Pacific – Australia, China, Japan, USA and New Zealand. Australia for example has successfully maintained a strong focus on the PIF despite a shrinking aid budget. However, political differences with Canberra in the recent past have driven PIF nations to expand its range of development partners, partly explaining the rise of assistance efforts from China, India, and EU in the Pacific.

In March 2016, some PIF nations were among the first countries to ratify the Paris climate change agreement; these nations have also called for others to do the same. PIF nations have also expressed unhappiness about Canberra’s reluctance to help tackle climate change issues, while appreciating India’s leadership on the same. During the FIPIC forum meeting at Jaipur in 2015, the President of the Marshall Islands called India a ‘clean energy crusader’. Not forgetting Canberra’s differences with the islands, Australia’s proximity to the Pacific islands and the presence of a large Pacific contingent in its own shores make the climate refugee problem a looming threat. Despite PIF nations blaming Canberra’s lack of enthusiasm, climate disasters can force these nations to make Canberra their first port-of-call. In addition to its own aid efforts, Canberra could therefore consider providing support to India’s development assistance projects in the region to tackle climate change.

Surprisingly, the aid programs of India and Australia already share a lot of commonalities – overall and in the Pacific too. The overall size of the Indian and Australian aid programs are nearly US$ 4 billion (in purchasing parity terms). The highest proportion of Indian assistance (nearly US$ 80 million) and Australian aid (nearly US$ 700 million) in the Pacific is directed towards the Melanesian region – key recipients include Fiji, Vanuatu, Solomon Islands and Papua New Guinea. Given Canberra’s bigger aid budget to the Pacific, countries such as the Cook Islands, Kiribati and Nauru also receive considerable aid support as well. Both nations focus resources on capacity-building measures such as skill-training, building economic infrastructure and improving social life in the islands. While maritime links, commercial interests and common strategic goals are bringing India and Australia closer, trilateral partnerships to tackle climate change can use the comparative strengths of each nation’s aid program, and reap dividends for all involved.

In the Pacific, trilateral cooperation between DAC-non DAC donors is an emerging trend. China is working with Australia to reduce malaria in Papua New Guinea; it is also partnering with New Zealand for a water supply project on the Cook Islands. With satellite data undoubtedly crucial in supporting the PIF nations against climate change vagaries, Australia could begin with supporting New Delhi’s commitment to set up a satellite monitoring station in the Pacific. Moreover, working with India’s renewable energy sector to build solar or wind energy resources in the islands can help the island nations reduce their dependence on fossil fuels.

An India-Australia trilateral development partnership with a recipient nation in the Pacific therefore seems ripe: building on each nation’s interests and history of engagements in the region to deliver aid. Such efforts are unlikely to face a broadside among domestic constituents in Australia, who desire strong leadership from their government on climate change. For India, knowledge exchange with a DAC donor can help improve New Delhi’s global development assistance programming efforts. Doing so will also move away from a hard-power narrative that threatens to override India’s growing engagements in the Asia-Pacific story.



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