Transcript

Why is international development essential to Australia’s diplomacy and security outlook? 

Do the recent Trump tariffs and withdrawal of aid demand a more active role for Australia and other middle powers? 

In this episode Melissa Conley Tyler and Mira Sulistiyanto join David Andrews to unpack the current state of foreign aid and international development, with a focus on cuts to USAID, its implications, and Australia’s role as aid partner for the region. 

(This transcript is AI-generated and may contain inaccuracies.)

Melissa Conley Tyler

There are documented cases in both the Pacific and South East Asia where US funding was cut and China came straight in.

Mira Sulistiyanto

In an ideal world, we would see an increase in Australian ODA and a redistribution to fill some of the gaps left by the US.

National Security Podcast

You're listening to the National Security Podcast, the show that brings you expert analysis, insights and opinion on the national security challenges facing Australia and the Indo-Pacific produced by the ANU National Security College.

David Andrews

Welcome to the National Security Podcast. I'm David Andrews, Senior Manager for Policy and Engagement at the ANU National Security College. Today's podcast is being recorded on the lands of the Ngunnawal and Ngambri people, and I pay my respects to the elders past and present. This week, I'm joined by Melissa Conley Tyler and Mira Sulistiyanto for a discussion on foreign aid and international development. To briefly introduce our guests, Melissa is Executive Director of the Asia-Pacific Development, Diplomacy & Defence Dialogue. and was previously Director of diplomacy at AsiaLink at the University of Melbourne and National Executive Director of the Australian Institute for International Affairs. Mira is an international Australian development expert currently working at the Development Intelligence Lab as senior analyst. Among other things, Mira leads the lab's pulse check capability, a survey that delivers data to inform policy processes by placing experts in the shoes of policymakers and asking them to grapple with their choices and trade-offs. Mira, Melissa, welcome to the podcast.

Melissa Conley Tyler

Thank you.

Mira Sulistiyanto

Great to be here.

David Andrews

Well, this may just be my impression and I accept I'm not an aid practitioner by training, but my impression is that it feels a bit sometimes like aid and development are only really in the news when things go wrong. And I think that category would probably apply to some recent major events that we're seeing around the world and seeing in this space, whether it's the dismantling of the United States Agency for International Development and other related institutions like the United States Institute for Peace and and the US agency for global media that looked after Radio Free Europe and Radio Free Liberty. So these actions by the Trump administration have definitely grabbed headlines, but we've also recently seen reductions in aid from the UK down about 40%, I think, in the most recent budget. And that question seems to be a perennial one. Melissa, could you possibly describe the current state of play for us in the aid and development space? What are we seeing play out across the world at the moment? Is this just...principally a US dynamic fuelled by a particular ideological outlook or are these more widespread trends that we think are going to continue and spread across the world?

Melissa Conley Tyler

Well, it's certainly a key issue for the US. For me, it's the moment that US credibility died in the majority of the world. The majority of the world being developing countries and development being what they care about most. So, if you think of it as the US had different leaders, defence diplomacy development with which it tried to shape the world, it's now just vacated, now just abandoned one of those completely.

For me, that sort of shock is analogous to what we've seen with the US stepping away from Ukraine and what that's meant for European security. There's a sort of before and an after, and I feel the same for this. And for me, of course, that has massive security implications. You're thinking about, I don't know, country like Jordan, say, perhaps slightly strategically important to the US – its whole education system was funded by US foreign assistance. I mean everything. I mean the schools and the teachers and the books and the whole things. Then you say, well, good luck getting Jordan to treat you the same way, to accede to your request. I also think it goes into broader Russia, China, Chinese narratives about the West. Those, I think, are very concerning for us, a sense that the West doesn't care.

We have to make sure that what I see as a sort counterproductive US own goal doesn't turn into a narrative about the whole West stepping away from aid. And that's tricky because as you say, it's not just the US, it's also UK, Germany, France, Netherlands, Sweden, Belgium. For Australia, I think we have to see it differently. We have to be a partner for the countries around us. And I think defence and security professionals need to be talking about this to see the importance of it.

I think we should think of our relationships in Southeast Asia and the Pacific as a national asset, and we do not want them to be trashed during this time of turmoil. They have to be preserved for the future. So, for me, that's what's at stake in the discussion. It's not a niche issue. It's absolutely core to our relationships in the region and the developing countries that surround us.

David Andrews

Mira, what about yourself? What are your reflections on the current sort of USAID cuts and their impact on the regional security?

Mira Sulistiyanto

Yeah, well, look, I completely back in everything that Melissa has said so far. perspective at the lab shortly after the executive order came down, pausing for an assistance, we knew that one of the most important things would be to hear about how that impact is being felt on the ground and what sort of some of the largest concerns of experts across places like Southeast Asia would be in light of these massive disruptions.

So, we went to 100 plus Southeast Asian experts to really ask them that question, what has the impact been? And there were some important implications for Australia's security positioning. So some of the most immediate concerns that experts across Southeast Asia had were the things that you would expect. Service delivery interruptions to things like health, education, disruptions to humanitarian assistance and UXO clearance. Also sort of longer-term organisational grant funding and because a big part of what the US did was support organizations on the ground and we're seeing sort of the erosion of really a whole ecosystem of civil society organisations as a result. But some of the longer-term concerns that experts had really pulled around the support that the US was providing to things like democracy and human rights support across the region. Implications for Australia in the security space – because these are pursuits that we really care about and that really enhance security back home.

 So across Indonesia, for example, one of our closest neighbours, we had an expert saying things like, one of the most significant impacts is to organisations and initiatives which focus on issues of democratic governance. Due to the highly political nature of their work, there's limited support with most bilateral donors nervous about the impact of their relationships if they support these things in Indonesia.

Australia's close vicinity to Southeast Asia and Indonesia is good example where USAID fills the gaps on matters too sensitive for Australia to support. In the Philippines, we had experts saying, look, the US has really strong ties in many sectors in the Philippines, but the aid program has the widest reach and a very positive public perception, which is not the same for its military and security presence or its economic investments. These experts are really telling us that the relationships built through the aid program of valuable and enhance the kinds of interest that Australia has in the region.

David Andrews

One thing that listeners may have noticed and that I'm certainly conscious of myself is that there are lots of different terms and language we're using here that can be done interchangeably. So whether that's aid or development or sort of foreign assistance and things like this. And maybe it's just worth confirming for everyone's sake. Are these all talking about the same thing or they're actually sort of nuanced differences in what's distinct between foreign aid versus development assistance. Are they synonymous or are they actually talking about different parts of the process?

Mira Sulistiyanto

Yeah, so they are used fairly interchangeably, but there are important nuances. So development ultimately is obviously referring to a process of strengthening economies, alleviating poverty, strengthening human development, stable governance, things like that. I guess when we're talking about aid, foreign aid, that's more specifically narrowing in on the resource transfer that occurs from a donor country or a development partner to a recipient country, typically in the form of things like grants or concessional loans.

When we're talking, as I think we will, in a little bit about ODA or official development assistance, that's really referring to the Organization for Economic Cooperation and Development's official term. that process of concessional resources being provided by agencies like DFAT or the US Agency for International Development. I guess we really favour the term development cooperation because it refers to that more holistic partnership and kind of joint action that occurs between states and actors, recipients or beneficiaries and development partners to achieve those outcomes that they're seeking in the development process.

David Andrews

Melissa, can I just jump back to something that think you, that neatly transitions into this next point I was going to raise and you're talking about how the kind of, I guess, perception or understanding of the US's presence in the region and beyond has been very significantly harmed by the decisions they've taken lately. And I guess the potential risk for countries like the UK and Australia as well, if we were to step back in concert, that leaves us exposed as well.

One thing that I've noticed some reflections on, in the last few weeks has been whether in development or in broader foreign security policy, human rights, all kinds of different fields. There's this question of have we reached peak issue X in this case, have we reached peak development? You know, was, are we now over the top of the hill in this post-Cold War, unipolar moment where now things have reverted to a more might is right force-based, a more sort of fractured global order. Do you think in that context we could say that we've reached or passed peak development and we're having to actually reassess what development and aid and ODA looks like in a new context? Or is that an erroneous claim do you think?

Melissa Conley Tyler

Yeah, look, I think you could certainly say development is going to have to change. So best projections from a DevPolicy at ANU is that you're looking at least 25 % of the global development assistance are disappearing and possibly as much as 50%. So business is usually just not going to cut it anymore. But I would say the needs are still there and the interests are still there. So it's going to be working out how to achieve those differently. I will say on this, David, I wouldn't say it's just about what's happening with US reputation. I think it's actually making the US less safe, and I think it makes countries less safe. Just to put it really clearly, to me, particularly I saw this with the UK when they said, we will cut our aid by 40% so we can put it into Defence.

To me that was like saying, the emergency rooms are full, we're going to huddle our preventive health programs, which is just insane. The way I think of it is in many ways, development is preventive security and defence. If you don't fund that, it's not that it doesn't hit you, it just hits you later and worse. The problems of the world still come to your door. Development keeps them further away.

So if I'm thinking about things we might care about, a security threat stress, so we're worried about a failed state on our doorstep, and what would that mean for us politically and economically? If we're worried about pandemics and the impact that has on us, if we're worried about climate refugees, we're worried about crime and drugs, all of those threats to our security need to be dealt with at source, which means development and development cooperation. Now, whether that looks the same as the current model of donors getting official development assistance or whether it looks quite different. Whether we do our development programs from the Department of Defence because that's the way we keep ourselves safer, I don't know. I think that's what we're going to see over coming months. This is a massive shift globally in how we see development, but the needs and the common interests don't go away.

And so we've got to think about how do we respond to that. I think so far I've seen a lot of the discussion really just focusing on China. Is China going to step in? And obviously that's an issue for us in the Pacific. There are documented cases in both the Pacific and Southeast Asia where US funding was cut and China came straight in. But in an odd way, I think I'm almost more scared of the places I know China won't come in. So that's the things Mira talked about, about things like democracy promotion and civil society and women's rights, anti-corruption. If that space is no longer occupied, if countries don't have partners to try to shore up good governance, civil society, what are we going to see in the countries around us? The way I would put it is what we're going to see is more security problems coming to our shores.

They will be more expensive to deal with because we'll be dealing with a full-blown crisis. If you think about what a RAMSI looks like and what that cost, the very small amount of money we put into development is an excellent investment in our security.

David Andrews

I think that's a really crucial point because I think for a lot of people in the broader national security, international security space understand well that sort of balance of development and diplomacy and defence, to give a nod and a wink to your final organisation, Melissa. potentially people outside of our community don't understand that distinction in that relationship quite as effectively. And so I guess you've probably already answered this question, but I might just sort of frame it to Mira as well and hear her perspective. But for the lay audience, I guess, what is the point of aid? Like what's it trying to achieve? Is it to pursue Australia's national interests in terms of having a more secure and stable region? Is it a reflection of our sense of ethic and human right to ensure that other people are at a higher standard of development? it to open up markets for us to grow our economy? it, I mean, could it be all of the above? I'm not sure, but is there a sense of what aid and development is for principally?

Mira Sulistiyanto

I mean, look, it's a really good question and to some extent I feel like you're already hinting to this for some people that there's a bit of a Rorschach test. Certainly in Australia's, in the example of Australia, we always revert back to development, pursuing development outcomes that are listening to and responding to the needs of our partners in line with Australia's national interest. Now that question around what Australia's national interest is, is always up for grabs.

But I think one helpful indication can actually be looking at where the sort of majority of our official development assistance is flowing and that's to our immediate region. So we see according to the latest federal budget figures, approximately 42% of Australia's ODA being committed to the Pacific, around 25% to Southeast Asia, and the remainder going regionally to South and Central Asia.

And so that sends a really strong signal that the interests that Australia is pursuing by way of its development cooperation is really laser focused on securing ties, promoting economic prosperity and security with our most immediate neighbours. And that's particularly true of the Pacific.

Melissa Conley Tyler

Yeah, look, I agree with that and I probably agree with David with the all of the above idea on why aid. I think the arguments are different for individuals and for government. So as an individual, I may feel a sense of morality, of humanity, a sense of connection, a sense of solidarity. And those are all beautiful reasons to feel connected. And I love the fact that actually the Australian populace gives more than the government, as I understand it, on the current figures. I wouldn't shy away from making those arguments to individuals. In my role, I focus on government and I focus on self-interest. I think there's a superb case there. You don't have to like the countries around us. You don't have to care about the countries around us. But you have to understand our strategic circumstances. We are surrounded by developing countries. It's not like the US and the UK.

 What that means is that we have common threats and we have common interests. We have a stake in their success in a way that may not be the case for others. I'd also put in there though that the multilateral side is a very important one. There are global problems that we can only deal with multilaterally. Multilateral institutions, whether it's through the UN or whether it's through the multilateral development banks, they're actually a core part of the way that we work together on some of these overarching problems. And they're also at threat because of just the scale of the funding cuts.

David Andrews

I don’t want to put words in your mouth, Melissa, so tell me if I'm off base here, but what you were just saying reminds me a bit of the comparison that's often made about the federal budget and running government and the comparisons that people make with say running a household. There's often positives being erroneous comparisons because the way you budget and sort of debt you can take on and approaches you take to a household budget.

It might seem like a very nice and simple analogy, but they actually don't track across what it means to run a national budget and strategy and all those bigger pictures. And maybe in a similar way, we might individually feel compelled to give to charity for different reasons to why we may wish to provide development assistance, though those reasons are not fully disconnected.

Melissa Conley Tyler

No, I think it's a really good thing to analyse a bit more. I would actually say what I find is when you talk to ordinary Australians, they are staggered at how little we give in development assistance. If you say to them, in the federal budget, what sort of percent do you think goes to our neighbours and international development broadly? They say, maybe like 14%. And as I hope people understand, it's nothing like that. In fact, at the moment, it's under 70 cents in every $100 in the budget. We're nowhere near even that sort of 1%, let alone 14%. And I think people are quite shocked by that because they just assumed that we will be doing more. I think that makes a really strong case to say, gosh, 99% for the things at home, but 1% for the problems of the world? Yeah, that seems reasonable. I think we should be able to go there. We haven't had that since we had it under Howard, under Rudd and Gillard, but we haven't had that since. So it's worth thinking about whether we can get there again and how important it is to those relationships.

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David Andrews

Well, I think that's probably a good time, Melissa, for us to sort of pivot to the Australian context specifically in the Australian budget. So aid is always a sort of a topical conversation in that context as well. And Mira, perhaps you could give us a bit of a rundown on how aid and development fared in the recent Australian budget and maybe a sense of, with an election only a few weeks away, would we expect to see a change in the status quo, whether it be a different government elected, or even if the government were returned? What's the election prospects like and where's the budget situation tracking at the present time?

Mira Sulistiyanto

Yeah, absolutely. So as Melissa was saying, there's a fair amount of advocacy around pushing Australia to that 1% mark. We haven't seen that and there's a relatively speaking low appetite for that. What we did see in the most recent budget was a stabilisation of Australia's current ODA budget, which sits at around 5.097 billion, which is about 0.818% of GNI, so kind of actually a historic low in terms of measuring Australia's generosity as an international partner.

But essentially what we saw was that budget stabilised and that is very consistent with the Albanese government's commitments and the signals that they've been sending since they were elected. If the Coalition were elected, things might be different. We don't really know because it's not necessarily a major election issue and we've seen essentially the Coalition be fairly tight lipped about any movements on aid. Dutton did address the Lowy Institute and made no real mention of Southeast Asia focusing instead on highlighting sort of the Morrison government's commitments and achievements under the Pacific Step-up. But the easiest answer is we're just not sure.

But I would really stress this point while it might be tempting to some to follow in those footsteps of the US and the UK. I really back in what Melissa was saying earlier, Australia's strategic circumstances are just so different. We're surrounded by low- and middle-income countries and countries with whom Australia is pursuing closer and closer, not just security ties, but economic ties. So really to cut the aid program further would be damaging towards Australia's of diplomatic developmental presence in that region and really risk-reducing sort of that soft power that we generate in those relationships and contribute to that sort of threat-multiplying effect when it comes to Australian national security. So it really would be a bold choice, I think, for a government to do less at the moment.

Melissa Conley Tyler

Yeah, I agree. And I hope it would feel like a risky thing to do. I think we've got some protective factors. So for example, we've already had major cuts during the Abbott period when a billion dollars was cut off the development budget in one night. And what we saw happen was that left a vacuum in the Pacific, which China filled, which became a political problem. So from that perspective, I hope we have learned from some of that.

I also think the fact that we don't have a separate AusAid makes a difference. Minister Pat Conroy now talks about it as an egg that can't be unscrambled. Our development is all over Department of Foreign Affairs and Trade. It would be genuinely difficult to pull all of that apart. I think those things do help us. The other one I think that helps is transparency.

So we now have, after the new international development policy, Australia now has a portal which will list every single one of our development programs. So if you are so minded as a member of the public, you can just look up exactly where the money is being spent. And I think it's astonishingly reassuring if you look through it. You look through and say, okay, Indonesian health and biosecurity. yeah, I get that. We don't want like foot and mouth disease, we don't want TB. Peacebuilding and PNG? Yep, look, that makes perfect sense. Working in the MECON and Drugs and Crime? Yep, all of those actually make a lot of sense. I know we've heard in the US context, Trump has made claims about what USAID went to and a lot of them are flat out untrue. If you have the time to fact check them, you can prove that they are just wrong.

But that said, there probably were a percentage of USAID programs that weren't tip top. That's how life is. I was listening recently to someone who'd been in the first Trump administration. That sense that there are politics, things get put here or put there. Every single project is not the world's best project.

But I'd say when we think about defence, for example, we don't say, gosh, one defence project wasn't perfect, we'll abolish the whole thing. And so I think it's a strange argument to say that either people don't know where all projects aren't perfect. We needed to hold the line in the budget and we did hold the line. It doesn't make up for what's happening worldwide, but if we can work with other countries, whether it's Japan or South Korea or Indonesia, you know, we can try to preserve as much as we can of the important programs that exist to keep us all safe.

Mira Sulistiyanto

If I could just jump off the back of what Melissa was saying about kind of quilting together an understanding about how these different arms of Australian international engagement are treated between defence and development, but also between sort of diplomacy, the AFPs, international policing, and of course intelligence work. Two colleagues of mine, Will Leben and Ruby Saulwick did a really detailed analysis of portfolio budget statements for each of the agencies managing these back to 1999, so 25 years of budgetary information. By presenting all of these budgets in one place, we really think that readers are then better positioned to understand how Australia is really balancing its international and domestic priorities, but also importantly how resources and effort and attention is distributed across these various and important arms of Australian international affairs. In short, what we saw was that international affairs as a whole, typically across that period, has amounted to around 9% of the budget that's remained fairly steady. But over that 25-year period have seen massive growth in the defence budget and the intelligence budget lines, whereas things like official development assistance and diplomacy, they've really chopped and changed during that time. And so I think to use that really important sort of AP for D terminology that government has now adopted when we talk about using all tools of statecraft, it's interesting to look at how we're really allocating efforts against that.

Obviously, we know that when it comes to things like defence and intelligence, there's been a sense that they require really steady investment. So we could be asking the question, know, are we investing in these different capabilities in the same way across all of these areas?

Development, diplomacy, really crucial. I think that becomes an even more live question. We've obviously touched on the importance of ODA and those development partnerships.

But diplomacy is something that obviously also is so crucial for securing Australia's place in the world. We're a middle power in this complex region and we have sort of a major ally who is withdrawing from our immediate region. Those diplomatic ties have also never been more crucial than they are now.

Melissa Conley Tyler

And just building on that, I think we've just got to think about it differently. Not that we have this 9% envelope on international, which we all fight about, but in fact, we need a bigger envelope. In the research I've done, I've looked back all the way to 1949. And on that, in 1949, we spent 9% of the federal budget just on development and diplomacy – plus then the much more we were spending on defence. I think if you're times of war, times of heightened security, huge international challenges, we have to actually explain to Australian people that in that time, that's just not enough. You have to put more of your budget into international challenges if you're really going to face them.

David Andrews

One thing that, just maybe to put a practical example around what this interconnection looks like. earlier, Mary, you mentioned UXO and for those that aren't familiar, that's an acronym for unexploded, so it could be landmines. could be bombs and shells in the second world war that are, or from Vietnam that are in the ground in forests in villages and communities around not just in the Pacific and Southeast Asia, but further afield. But, say that is the disposal of them is a project that could be funded through our development program, but it could also then be assisted by defence engineers who are out there to actually physically detonate and dispose of that UXO. And that's in itself a partnership that's being delivered, that's delivering a security and development outcome for local communities, but it's not just being done by one arm of this bigger statecraft piece, but it's actually inherently combined. And also I think it's all these kinds of things and the ones that you mentioned as well before, Melissa, that a lot of the projects that we're talking about here, it's not like public servants hanging out of helicopters, throwing sort of food packages out the door, which I think people can sometimes have this false impression of what aid actually is in what we're doing – that development is often much more sort of industrial in a way. It's actually, as the name suggests, it's helping develop societies. It's not just providing food packages and things like that. And I just thought that's probably a useful point for us to emphasize that these perceptions, whether it's the volume of aid we're providing, that 17% when actually it's sort of a tiny fraction of that, it's twice as much as the whole international budget, is actually that the tangible things themselves are very different from that too.

Mira Sulistiyanto

Yeah, I just, completely agree and back that in. Certainly there is growing momentum and that needs to continue in looking at much more integrated ways of doing development cooperation. The grants, the technical assistance that's channelled through aid and through ODA is really a really critical piece of that. But absolutely right that there is so much more that can pull on these different and better connect these different arms of Australian engagement and Australian interests too. mean, if we're thinking sort of about what more innovative ways of looking at that cooperation might be, really, kind of an example that I really like is the policy innovation like the Falepili Union. So that treaty between Australia and Tuvalu that addresses these shared climate change, climate resilience and security challenges, that essentially sets out agreement that as sea levels in Tuvalu continue to rise, the union offers these migration pathways for citizens as well as a commitment to recognizing the ongoing statehood of Tuvalu, even if the horrifying circumstance eventuates that land there becomes uninhabitable. It also includes more immediate climate adaptation cooperation. And then importantly, from a security perspective, the commitment that both countries will agree on any arrangements Tuvalu enters into with other partners relating to security or defence. Another huge opportunity that I see and that has only become more crucial in light of the recent tariffs that the Trump administration is handing down is Australia's Southeast Asia economic strategy to 2040. So essentially this guiding document filled with recommendations and actions across a range of sectors aimed at boosting Australia's two-way trade and investment with Southeast Asia, a really crucial piece of policy work and a really important policy document under Wong.

But of course, Australia has multiple relationships with Southeast Asia. It has these economic ambitions and it has these development engagements and partnerships across Southeast Asia. So in the same countries where we're trying to strengthen economies, we're also looking to secure our own economic interests. That is a perfect opportunity to be better integrating development with economic engagement for the mutual benefit of our country and the region.

Melissa Conley Tyler

I agree. I think that idea, of really updating the picture we have in our head of what this means, development cooperation, and I like that term, the way that Mira's been using it. I think that's probably the clearest is it could look like embedded AFP officers in local police. could look like a treasury expert trying to help the country get its finances under control. mean, there are so many things we do which are development cooperation, but you might not think of them as aid when you think of aid. And I think it's really important we do update our thinking on that. This is working together on common problems.

David Andrews

Just to build on Mira what you just said and also I think tying back into some of the things that Melissa had raised, the tariffs are obviously a hugely topical dimension to this as well. So we're recording this on about a day after all the tariffs have been announced. So it's still very fresh in all of our minds, but we're seeing some of the biggest tariffs being applied against key states in Southeast Asia particularly. So Cambodia, 49%, Vietnam 46, Thailand 36, Indonesia 32, combined with the dissolution of USAID and the withdrawal of US funding and support for the region.

I guess the question that I'm left at asking is, what does all this mean for Australia and for our security? And also maybe, I guess in the spirit of what we've been talking about, thinking of innovative ways to address this is that while the US may have stepped back from its role in the broad international order, countries like Japan, Korea, Canada, Australia, et cetera, we are still interested in upholding those standards and those principles. And does this mean that more will be expected of us individually by Southeast Asian states and by Pacific states? Does it mean we'll have to actually develop more kind of middle power coalitions of a sort to sort of collectively redress this imbalance because we all benefit from the security that it provides? What are your reflections on the tariffs and their implications so far?

Mira Sulistiyanto

Yeah, it's a great question. And obviously as you flag a really evolving situation, I'd like to come back to that idea of multilaterals or minilaterals in a second, I guess, yeah, zooming out slightly on Southeast Asia and the tariffs, and hopefully you don't have any economists dialing in after this. But in short, so many of the countries that have had these really hefty tariffs applied in Southeast Asia, Cambodia, Vietnam, Thailand, many are relying on export-driven development models. So essentially the economic strategy where our country's growth is really hinging on our production of goods and services for export rather than sort of mainly servicing domestic markets. So really true of sort of Vietnam in garments and footwear, Thailand in automotives, electronics.

So these tariffs obviously pose really substantial challenges to these economies. We might see decreased exports, reduced foreign direct investment, economic slowdown. And a sense of course that these affected countries are going to need to seek negotiations or diversify their trade partnerships. But analysts are really saying that, you know, in some of the worst affected countries, like Cambodia, for example, have very little negotiating power.

So I think what's interesting in the maps to previous research done by the lab where we did speak to a large panel of Cambodian experts about the biggest threats that they were seeing to development. This was prior to the tariffs. Leaders are already identifying that economic circumstances and geoeconomic game playing like this does really threaten and sort of destabilize economic trajectories. So we saw experts saying that they're increasingly concerned about, for example, the volume of Chinese foreign investment in their country because they see linkages to the sort of risks of elite capture, corruption and poor governance that can come alongside with that.

So a lot of experts really desiring to promote broader foreign direct investment. I guess what the question really, what this means really is that the imposition of these tariffs in sort of threatening Cambodia's ability to again sort of diversify those economic relationships may well over the longer term turbocharge some of those developmental threats that have already been identified by these experts. So guess the question for Australia really is, you know, is our current footprint sufficient to support countries like Cambodia navigate these things? Is there going to be some kind of recalibration of the aid program that you would expect as a result? And I guess linking back to sort of my earlier point, it's a perfect example of why we can't just think about development in terms of the aid budget alone. It is about harnessing different levers of power . Sort of understanding where we can put a stronger development focus and development lens over other areas of Australian engagement in the region like the Southeast Asia economic strategy.

But just briefly back to that idea of kind of, where we may be required to step up more, to cooperate more with other partners. I think that is absolutely a question that would be really looming large on the minds of Australian policymakers at the moment. We saw sort of in the research that I was referring to earlier that did go to Southeast Asian experts and, you know, ask not just what the impacts of the US aid cuts had been, but also on what they hoped Australia would do to respond. We saw these experts saying, yeah, stabilising the budget is really important, but in an ideal world, we would see an increase in Australian ODA and a redistribution to fill some of the gaps left by the US. Now, the US were the biggest OECD donor, so it's completely improbable that any actor, including China, could step in to fill those gaps. Nor that every development partner who is active in Southeast Asia would fill the gaps in the kinds of work that the US is leaving behind like that pro-rights, pro-democracy work.

But I think it does put Australia in this really tough position or this great opportunity to work with partners like Korea, South Korea for example, who is one of the few development partners actually that you see increasingly upping their development cooperation to really work with partners like that to understand how we could sort of quilt together a response that's going to address some of the big gaps that have been left.

David Andrews

Do you think, Melissa, does that, what are the prospects from your perspective? What are you seeing as the next steps for Australia in stepping into this space to addressing that imbalance?

Melissa Conley Tyler

Look, that is what I would love to see Australia stepping into that space. I think what we saw in the budget was very positive in the federal budget in the sense that within fixed resources, it showed an attempt to rebalance, to talk to partners throughout the region, to find out what were the key areas at risk, and to essentially retarget our development programs in the areas that were highest priority for them following these cuts. I think that was all extremely positive, but it was within the limited of what was already promised. The idea of working with others in the region, I think that has to be how we move forward. Again, I'm very heartened with South Korea.

I hope Japan will continue to hold the line the way that we have. And then yeah, we do have new donors we can talk to. So like so many areas where we're all trying to make up for US withdrawal, one of our only realistic strategies is to find others that care about the issues we care about and work with them. So that's what we have to do here.

Mira Sulistiyanto

One other thing that I would add is that obviously a really important piece is looking at where the partners that remain can fill gaps. But another important action I would think is given the commitments that we've heard from major donors, the US, the UK, Germany, are cutting their ODA contributions. think Australia would want to be pulling whatever around coalition-building and sort of influence it can to also support those partners who are working in our immediate region to cut wisely. I think that's a really important piece and then making that assessment around sort of what remains and possibly reassessing as well what Australia's comparative advantage is against that sort of new landscape.

David Andrews

How frequently does this kind of cooperation occur at the moment? So if we're thinking that the optimal solution or maybe not solution, but a means of addressing the situation we find ourselves in is to pursue more cooperative development initiatives. Is that actually a norm at the moment or does it tend to be very bilateral state-based sort of trying to leverage this into national advantage. I'm not sure if either of have any perspectives on that, but if we're sort of trying to almost troubleshoot it while we're thinking through the idea as well, would that present a challenge to overcome? Melissa, do you have any thoughts? Yeah.

Melissa Conley Tyler

Yeah, just quickly, I'd say development cooperation is actually very, very difficult. Trying to manage the different processes and reporting and governance and paperwork, it's actually relatively rare to run joint projects. But coordination, that is very achievable. To say that we all care about, say, anti-corruption in this region.

How about we coordinate what we're doing and make sure that there's enough funding and make sure that we're keeping the organizations that need to be kept going going. So I'd be suggesting more of that.

Mira Sulistiyanto

Yeah, I would completely back that in. It's really, really tricky. But if any circumstances call for sort of an increased effort on that, it's the current extraordinary ones that we're facing at the moment.

David Andrews

Okay, well, I have learned a lot and I think we've got some really sort of tangible ideas to think through as a sort of broader policy community to work out what might be a way of moving some of these ideas forward. But Mira, Alyssa, thank you so much for your time and for your insights and thank you for joining us on the National Security Podcast.

Melissa Conley Tyler

Thank you, David.

Mira Sulistiyanto

Thanks, David.

 

National Security Podcast

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