00:00What this data does emphasise, I think, or really display is that it's Australia first,
00:07daylight second and then the rest. Australia already gives multiple times more than the
00:13second most generous donor, New Zealand and on the latest data it's probably around four
00:19times more and then after New Zealand you go down to countries like the US, Japan and
00:23China but all of them orders of magnitude smaller than Australia and this is only likely
00:29to grow. That's because a number of countries, most famously the US but also several European
00:34countries, even New Zealand, are quietly pruning aid budgets and in some cases that means the
00:40Pacific takes a hit. So what the Lowy Institute has done here is not just take a look at what's
00:45happening to aid right now but also to a degree projecting out what it's going to look like
00:49in the future and the picture is pretty clear as other countries retreat, Australian aid,
00:55both grants and loans is only going to become more and more important and by 2028 you're
01:02going to see Australia taking on a truly dominant role when it comes to responsibility for aid
01:07and development spending in the Pacific. While Australia's foreign aid has in real terms
01:11been flatlining, the Pacific has got a pretty good deal so a larger and larger percentage of
01:17Australia's foreign aid is now going to the Pacific and to South East Asia, to our immediate
01:22region. So yes, the picture more broadly is not a great one as far as aid groups are concerned
01:27but the Pacific is getting an awful lot of money and a lot of attention. The other thing
01:32that's worth bearing in mind here is when we look at Australia's growing dominance in
01:36foreign aid, including in the Pacific over time, a lot of that's not going to be traditional
01:40foreign aid grants, it's going to be loans instead. So grant funding to the Pacific is going
01:46to remain pretty stable but where the growth is going to happen is really Australia ramping
01:51up lending in the region, particularly to larger countries like PNG. Now that's not
01:55what Australia's traditionally done but that is shifting now as Australia pulls on all the
02:00levers of statecraft to bear down its influence. So that brings risks, you know, some of these
02:05countries are pretty debt exposed but on the other hand, to a degree, Loewy says it's also
02:09going to cushion the Pacific from the impact of those global aid cuts. So China's now moving
02:14away from its traditional model which in the 2010s was basically lending quite heavily for major
02:19infrastructure projects in some instances, for example in Samoa, in Tonga, in Vanuatu,
02:24that left countries with pretty big debt sheets and has put them in a situation of some debt
02:30distress in some of those countries. China's now moving away from that, not entirely, it's
02:35still doing some big, very high profile projects but more and more it's actually looking at smaller
02:41grant based funding in the grassroots. Now that doesn't mean China is a fading force in the
02:47Pacific, far, far from it. ODA is only a small part of the picture. Chinese state firms still
02:53have a dominant role across most infrastructure projects across the Pacific and of course China's
02:57political influence has been growing as well. But when it comes to aid, it really is Australia
03:03and Australia by a big margin.
