By Stephen Dziedzic, ABC
Australia has supported Vanuatu and others in the Pacific more than any other country. Photo: ABC News / Lillyrose Welwel
Australia has cemented its position as the Pacific's largest aid donor by far as other countries pull back on lending and prepare to cut development assistance.
The latest version of the Lowy Institute's Pacific Aid Map captures the flow of development spending in the Pacific from 2008 until the end of 2023.
The data shows that even before the Trump administration's moves to dramatically slash foreign aid this year, total development spending across the Pacific fell by 16 percent in 2023 to $US3.6 billion.
It is the second survey in a row to show aid falling in the Pacific, with most of the 2023 drop explained by receding emergency lending from the heights of the Covid pandemic.
But a host of countries - including the United States, New Zealand and several European countries - have all flagged or implemented aid cuts since then, which means Australia looks set to take on an even larger role in the Pacific.
The map shows that Australia provided about 43 percent of all overseas development finance to Pacific countries in 2023, which is "more than four times the contribution of New Zealand, the next largest donor".
The aid map's lead author Riley Duke said Australia's dominant role was set to expand, and that by 2028 it would "likely deliver more than double the combined support of Japan, New Zealand, the United States, France, Germany, and the United Kingdom".
Australia has advanced ahead of China in its spending on aid in the Pacific. Photo: AFP / Ding Lin/Xinhua
"Australia has never before shouldered quite as much responsibility in the Pacific before, particularly among like-minded countries which also offer development assistance in the region," he told the ABC.
"Australia is a big fish and it's only getting bigger."
Duke said most of that increase would not come from Australian grant programs, which are likely to remain steady, but from its move to continue ramping up infrastructure lending to the region.
While that will hold risks, with some Pacific nations already holding uncomfortably high levels of debt, Duke said that lending would also "protect" the region from global aid cuts, which are set to hit the developing world hard.
He said global strategic and financial strains were pushing many donor countries to become more parochial in their outlook, either slashing aid or focusing more tightly on their key priorities.
"Global aid is receding, and as the tide goes out it becomes clearer that the Pacific has been a 'nice to have' in the key priorities for a number of countries," he said.
"It's not optional for Australia, whereas for some other countries, it has clearly dropped down the list."
Australia has boosted its support for the Pacific Islands Forum. (AAP Image: Ben Mckay) Photo: AAP Image / Ben Mckay
China narrows focus
Meanwhile, China provided about $230 million in development finance to the Pacific in 2023, putting it below New Zealand, Japan and the US.
But the map report says China's "narrower focus on a smaller set of Pacific countries" ensured it remained the second-largest bilateral donor behind Australia in several countries including Kiribati, Federated States of Micronesia, Papua New Guinea, Solomon Islands, and Vanuatu.
The map also shows that Beijing was continuing to move away from its earlier strategy of lending heavily for major infrastructure projects in the Pacific, a legacy that left some nations - primarily Tonga, Samoa and Vanuatu - with high levels of debt.
Duke said China's aid strategy had shown "remarkable adaptability" and Beijing was now shifting to record levels of grant financing and grassroots projects.
"China has transitioned out of big projects and loan infrastructure, and in the course of a few years, it's moved to a far more nimble model, with far more locally targeted projects," he said.
"Occasionally, you still see large shiny high-profile projects, but now it's going with smaller, high-frequency, high-volume projects.
"This is the model China wants to take forward."
-ABC
