Australia's New Aid Paradigm and the Natural Resource Curse

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Author/s (editor/s):

Kylie McKenna

Publication year:

2015

Publication type:

In Brief

On 18 June 2014, the Australian Government announced its new approach to overseas development with an emphasis on sustainable economic growth and poverty reduction across the Indo- Pacific region. A key focus of 'the new aid paradigm' is the promotion of private sector-led growth. As part of this, in 2014–15 Australia's aid program will be investing $41.5 million on extractive sector development assistance (up from $22.6 million in 2013–14). The extractives industry continues to represent a vital component of the private sector across the region, with numerous large-scale extractive projects currently in operation, or under negotiation. Significant examples include the reopening (and subsequent closure) of the Gold Ridge Mine in Solomon Islands, ExxonMobil's PNG LNG project (liquefied natural gas), mining and gas exploitation in the Papuan provinces of Indonesia, as well as debates on the potential resumption of large-scale mining on Bougainville. A striking feature of these cases is that they comprise new or reopened extractive projects in areas where natural resources have been directly related to prior conflict, such as the struggle over land and resources in Papua. This In Brief highlights recommendations in the academic and policy literature on how the 'natural resource curse' might be transformed into a 'resource blessing' and how this might be of relevance to the Australian aid program.

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