East Asia

Estimated ODA to Indonesia and East Asia in 2009-10: - $1,073.5 million *

According to the World Bank, GDP growth in developing economies in East Asia is projected to slow to 5 percent in 2009 from 8 percent in 2008. Despite regional growth dropping by one-third since the onset of the global recession last year, there are some recent hopeful signs emerging. The outlook for growth in China, for example, continues to improve with the World Bank upgrading its 2009-10 forecast to 6.5 per cent. The World Bank estimates that the economies of some low income countries such as Laos (5.0 per cent) will continue to record positive growth. Vietnam (3.5 per cent) is showing some early, but fragile, signs of recovery. However, the recession has slowed or reversed the tremendous poverty reduction gains made over the last decade across East Asia. Estimates of the number of additional people in the region who will remain, or be thrown into, poverty as a result of the global recession range from 10 - 60 million.

Australia's response to the global recession is operating at both a country and regional level. In addition to helping regional partners directly tackle the impacts of the recession on their people, we are working to harmonise and coordinate national-level financial corporate governance reforms and rescue packages across the region. Through our regional program, we are supporting research on mitigating the regional social impacts on vulnerable communities.

The global recession has exacerbated existing development challenges in East Asia and is directly threatening progress in poverty reduction. Impacts include reduced trade and investment, rising unemployment and declining remittances, with decreasing government revenues likely to bear adversely on the delivery of health and education services, increased risks of trafficking, prostitution and other forms of exploitation.

The spread of infectious diseases, including HIV/AIDS, and potential pandemics such as H1N1 influenza, pose ongoing major threats. Corruption, environmental issues, inequalities caused by poor governance, and peace and security continue to pose significant challenges.

AusAID continues to work cooperatively with countries in East Asia to address these challenges. Assistance to the region focuses on improving government service delivery, supporting peace, justice and security, promoting regional and international economic integration, rural development, clean water and sanitation, and addressing transboundary threats.

* Includes $452.5 million in total ODA to Indonesia. Estimated ODA to East Asia in 2009-10 excluding Indonesia is $621.0 million.

July 2009