Our Analysis

International Development Policy: First Impressions

August 2023

For the last year, we’ve been saying that Government faces a strategic choice with this new policy.

They can put down a host of priorities that satisfy their stakeholders; they can stabilise the program after a decade of instability and short-termism; or they can write a transformative policy of the future.

In the end, Government has landed somewhere between options one and two, and in doing so has created a solid springboard for serious development reform.

While these foundations certainly are encouraging, the implementation road will be tough unless it’s supported by political will, departmental leadership, stamina, and adequate resources.

Here’s where we landed as we sat down as a team and asked: what’s new and novel? What’s unsurprising? What’s missing? What’s yet to be tested? And importantly – where to next?

More to come – but for now, dive into what we made of the new development policy as it landed.

Bridi Rice
Bridi Rice
Madeleine Flint
Madeleine Flint
Strategic Advisor
Heather Murphy
Heather Murphy
Head of Analysis and Engagement
Isabelle Coleman
Isabelle Coleman
Project Officer
Mira Sulistiyanto
Mira Sulistiyanto
Senior Analyst

One | What’s new and novel?

The policy makes headway on the purpose of development, and our place in the world.

Government has grappled with establishing the purpose of the development program better than we expected. Where past policies have fluctuated between including ‘national interest’, naming ‘poverty’, or staying vague and running the risk of being able to drive a truck through the purpose, the Ministerial forewords in the policy attempt to connect how a peaceful, stable, and prosperous Indo-Pacific is central to Australia’s national interest – articulating that this is best achieved by fostering sustainable development and poverty reduction. It’s not the most elegant explanation, but it is a huge leap forward.

Critics of the development program would say that Australia is too reluctant to put pen to paper and state who it is and how it sees itself as a development partner in the world. The fact that there’s now a whole chapter on this? Absolutely new and novel. It’s broad and general and doesn’t focus down, but is nevertheless a step in the right direction.

And it doesn’t stop here – there are other indications of a more modern conceptualisation of development. Schematically, there is evidence of a complexity lens at play in the commendable global challenges map (p.17): seeing shocks, trends, and underlying fragilities rather than just areas of sectoral investment. The policy platforms both poverty and sustainable development as central concepts, and it also maps the performance framework to the Sustainable Development Goals.

Dropping down a level, there’s a bigger focus on HOW Australia engages with the world.

The policy sets out a five-point approach (p.11) that reflects course corrections (partnerships of respect, understanding our own strengths, working together to maximise impact) and a push of the program into the 21st century (supporting locally-led change and deepening quality and transparency).

What’s more, we’ve noticed a shift in how the policy talks about Australia’s development partners: it’s listening and working with them (not novel), but also enabling greater exchange between bilateral partners with different strengths to bring to the table and shared interests (rather than Australia imposing its priorities one-way).

The policy’s specific mention of the need to shift DFAT’s risk appetite to be more agile, innovative, and modern – while not a shock – is welcome in its frankness, coupled with Minister Wong’s remarks that “achieving our goals will require meaningful changes to how we think, plan, and engage.”

While the focus on the Indo-Pacific isn’t new, it’s encouraging to see a recognition that different approaches are needed to achieve ‘development’ in different areas – the needs of the Pacific are not those of Southeast Asia, and the policy explicitly differentiates this and includes focus areas. That said, the dominant development paradigm of the policy is skewed towards engagement in the Pacific.

And there are some headline inclusions that are commendable.

The policy is launched alongside a development finance review. The review positions development finance as a critical element of development, but not the holy grail. It’s a measured piece of work, falling short of recommending Australia establish a development finance institution in favour of reconsidering existing development finance tools and their delivery.

State effectiveness and governance make more of an appearance than they have in the past. This isn’t entirely surprising, but commendable given the complex challenges facing our region. There is also a big focus on civil society engagement with new initiatives – like the Civil Society Partnerships Fund – that show encouraging tangible action.

International Development Policy: First Impressions

Two | What’s unsurprising?

Australia isn’t wavering on its flagship priorities.

Promoting gender equality, social inclusion and the rights of people with disabilities has long been a mainstay of our development program, and the Government is unsurprisingly continuing with this approach. This makes sense – Australia is known for this work and has built significant sectoral expertise in these areas, which will continue to stand it in good stead. On a similar note, humanitarian assistance is another constant and unsurprisingly highlighted.

Since its election in 2022, the Government’s made it clear that it will take a scaled-up approach on climate change, and this is unsurprisingly a major focus of the new policy. It’s a relief to see the acknowledgment of the inherent tie between domestic and international action here and the incorporation of climate change objectives in the Performance and Delivery Framework.

We’re staying the course on geographic focus.

Again, naming the Indo-Pacific as Australia’s main area of bilateral focus is unsurprising. We know that development of this region is crucial for Australia’s interests, and sensible given the small scale of funding available. But it also means that stakeholders advocating for our development dollar to be directed towards regions of the world where the most absolute poverty remains – e.g., Sub-Saharan Africa – will be disappointed.

Locally-led development was always going to be in there.

There are no surprises that the Government has paid particular attention to locally-led development, including putting down a number of initiatives to back up the rhetoric. This intention spans across political and community leaders, as well as civil society organisations although the commitments may fall short of stakeholder ambitions.

There is evidence of a complexity lens at play… seeing shocks, trends, and underlying fragilities rather than just areas of sectoral investment.

Three | What’s yet to be tested?

The age-old question of geostrategic competition.

While the policy includes a handful of subtle nods to the PRC’s growing influence in the Indo-Pacific (committing Australia to being the region's “partner of choice”), there is a notable silence on whether navigating strategic competition is also a key objective of the development program. Where other donors are tackling this issue head-first – be it Japan naming it explicitly, USAID developing its own separate response, or New Zealand naming it (and development) in its National Security Strategy – the policy is largely silent on the aid for influence debate. Ideally, this policy reflects the nuanced position of some development experts, who see Australia’s development agenda best advanced in parallel to its geopolitical agenda, rather than subordinate to it. But there’s also a chance this silence perpetuates the current pressures on the development program to be everything to everyone, all at once.

There’s a raft of implementation and impact questions.

The biggest question on our minds is whether the Development Partnership Plans (DPPs) will be the panacea the new policy promises they’ll be. This isn’t the first time an aid policy has identified country plans as the place where lofty visions will come to life. Yet experience over the last decade casts serious doubt on their utility and usefulness – once set, there’s a tendency for them to sit on the shelf while DFAT staff go ahead and respond to the priorities of the day. There’s a lot of work ahead – and it will need to be rapidly executed – for this vision to be realised.

The policy was refreshingly honest about the need to disrupt the current risk appetite in DFAT to encourage greater experimentation and innovation (p.31). But will this change happen – or will the bureaucratic incentives around risk management and a low tolerance for public failure mean Australia keeps playing it safe?

Starting with the Ministers and trickling down into other areas of the policy, the ambition to communicate a program that all of Australia can be proud of is admirable – but fraught with challenges. DFAT’s new Strategic Communications Division will have its work cut out for it to walk the line between communicating successes (as the Ministers wish), while at the same time navigating an increased risk appetite (owning things going wrong) and transparency mandate. All three things are very welcome – how they work together is to be tested.

There are some critical success requirements that are yet to be operationalised.

The policy rightly identifies the importance of building connections between Australia and the region. This is sensible for a modern development program – but a question remains over what connections achieve what goal. Australia could connect with different partner countries on almost any issue and for almost any purpose – avoiding tokenism will be key here.

There are several nods to the need for coordination and coherence across all areas of the policy. Donor coordination is a perennial challenge, and everyone agrees better coordination leads to better results – but the conundrum is always how. The policy doesn’t have a clear answer. Stronger coordination across the Australian government agencies is also a no-brainer, but there are serious barriers to overcome. It’s unclear how the whole-of-government aspirations of the policy will be brought to life. The gender equality strategy, and stronger action on climate change, are likely platforms to drive this.

The budget elephant in the strategy room is very much still here.

The policy flags a number of changes that are needed across multiple levels of implementation: new ways of thinking, new ways of working, and new initiatives to get going. While there are hints that there’ll be greater, more transparent use of non-ODA spending to achieve development outcomes and commitment to be both creative and disciplined, with no new money, we can’t help but wonder how the Government is going to pull this off. How we justify such a boutique program – and our position near the bottom of the global rankings on aid generosity – remains unknown.

International Development Policy: First ImpressionsInternational Development Policy: First Impressions

Four | What’s missing?

Focus - and therefore protection against geographic, thematic, and timeline drift.

We’ve seen previous development policies lose impact when they’re not clear enough on what matters - allowing the definition of what development needs, and what’s in Australia’s interests to address, to expand. This policy lists climate, gender, disability, infrastructure, locally-led leadership, civil society, governance, and more as important. Add into this a vague statement of when we’ll engage in activities outside the Indo-Pacific, and no clear timeline for the raft of commitments, and it’s potentially a recipe for continuing the ‘everything is important’ approach to Australian development. If everything’s a priority, then nothing is. We’ll have our eye on what mechanisms are put in place to guide policymakers. Day-to-day decisions will be made by busy people weighing up apples with oranges – let’s hope they have more than the policy’s headline statements to guide them through.

The DFAT capability deficit features – but the underlying drivers of the problem remain unaddressed.

We were heartened to see in both this year’s budget and the policy such a big focus on the much-needed capability uplift for DFAT. It’s commendable that the department will appoint Senior Responsible Officers for development programs and that staff will receive further training and encouragement to do postings in the Indo-Pacific, alongside improved career pathways for locally engaged staff. However, the Government has not addressed the underlying drivers of Australia’s development capability deficit. The overwhelming focus is on DFAT’s contracting mechanics and an assumption that more skills will result in greater capability, rather than creating the incentives to be a great development policymaker – and have a career in development in the first place.

The performance framework appears to be more of a monitoring framework.

The policy’s accompanying performance framework is a great piece of architecture, but there are some serious measures missing. Tier two is purported to be the key performance indicator tier for measuring the impact and contribution of Australian assistance to the region’s development. What appears instead are a set of monitoring indicators that lack concrete targets, ambitions, and a clear way to assess the overall direction of travel. So, we’re left wondering how we’ll be able to make a judgement on what all this effort is adding up to.

Technology is named as a challenge. How we’ll tackle it remains a mystery.

Apart from a nod to this in how we’ll work with Southeast Asia, there’s little on how exactly Australia intends to get to grips with the ubiquitous challenge that is technological change, despite it being named as a central trend shaping development. Where Australia has taken baby steps into the land of technology for development, the way it will grapple with the impact of technology on development remains unclear. When it does determine its approach, it’ll have to be multi-sectoral.

...the Government has not addressed the underlying drivers of Australia’s development capability deficit.

Five | What’s next?

After rounds of drafting, consulting, and a pandemic in between, an Australian development policy has finally landed. Where to next?

For Ministers and political leaders, there’s no rest in sight.

The launch of this development policy is an extremely significant step forward. Government has laid the foundations for a good-practice development program fit for today – but the situation is far from ‘job done’. With questions over whether there is adequate bandwidth and resources to implement the policy, resourcing and budget discussions must be on the horizon. But that’s just the start. With a “decisive” decade ahead, Australia’s ambition will need to move beyond the basics. The Foreign Minister, Minister for International Development and cabinet must take serious and ongoing ownership of Australia’s development agenda.

For DFAT, there’s a mountain of implementation thinking and design to do.

DFAT has finished a monumental job in consulting and getting this policy out – and now the hard work of implementation begins. The trick will be to keep the momentum and imagination going through this phase and avoid falling into the trap of ‘what we did last time’. This looks like holding true on reimagined DPPs, learning from past mistakes and working incredibly hard to narrow focus as much as possible.

For the broader development sector, there’s a line to walk.

This policy should put a handbrake on some misguided policy and implementation trends, but there’s a long way to go. The sector will need to work empathetically with policymakers as they translate policy to practice, while at the same time pushing politicians and bureaucrats to build a future-fit development program that is resourced and managed effectively.

For regional leaders, there’s a need to hold Australia to account.

Australia has stated how it sees itself in the world and what it believes the development program has to offer. As this comes to fruition, regional leaders will need to keep holding Australia to account on what’s working – and what’s not up to scratch – in a region we all share, whose stability, security and prosperity will determine our own.

International Development Policy: First Impressions

Six | Want more analysis?

The Lab is a think tank working on development cooperation in the Indo-Pacific. We’re convinced that great development cooperation comes from unusual collaborations, inspired leadership, good natured debate and cracking analysis.

For more analysis from the Lab, catch up on the Pulse Check, the Lab’s survey of 50+ regional and 50+ Australian experts on the critical choices they’d make ahead of the new development policy.

You can also join us for the latest debates over on The Intel, where we pose one question a week that’s bubbling away in the development and foreign policy community, with three short and sharp responses. Find the latest ideas over on The Pitch, a collection of ready-made policy proposals for policymakers. And keep an eye out for our signature Situation Room events which invite insightful conversation in off-the-record settings. Stay up to date as we apply our analysis to live policy problems facing Australian development cooperation in the region.

International Development Policy: First Impressions