Fragile States and Australia's Aid Program

The economic, social and security implications of fragile states on regional and global security are great.

With many countries in the Asia-Pacific region showing some or all the characteristics of fragility, helping fragile states is a priority for Australia.

What are fragile states?

Fragile states are countries that face particularly grave poverty and development challenges and are at high risk of further decline - or even failure. Government and state structures lack the capacity (or, in some cases, the political will) to provide public safety and security, good governance and economic growth for their citizens.

All fragile states are different and many reasons can cause their fragility but features they share are weak governance, failing public institutions, instability or conflict - all of which contribute to dismal growth prospects. People living in fragile states are more likely to die early or suffer from chronic illnesses, and less likely to receive a basic education or essential health services.

Fragile states are referred to as LICUS (Low Income Countries Under Stress) by the World Bank.

The role of aid

In much of the developing world, aid supports and complements the much larger forces of trade and investment. In other words, aid is only one part to the solution of reducing poverty and stimulating growth. Aid alone can't provide all of the resources required to activate long-term development.

Far greater are the resources from international trade and foreign investment.

Yet aid, particularly for fragile states, is enormously important precisely because, as a fragile state, competing for international trade or attracting foreign investment is far more difficult. The reasons for this are complex and various but usually include one or more of the following:

instability or open conflict
weak administrative systems vulnerable to corruption
small size and geographical isolation
under-development - widespread poverty, lack of infrastructure and a relatively unskilled workforce.

In such circumstances the role and importance of aid inevitably grows. And while aid can do nothing to change a nation's size and geographic location, well considered long-term aid programs that tackle core weaknesses - like poor governance, private sector growth and infrastructure - can make a massive difference.

Australia's approach

Australia's long-term approach to helping fragile states addresses development, economic, security, and political issues in a comprehensive and sequenced way.

This coherent national approach employs the combined expertise of a range of Australian government agencies.

Australia's approach has five elements.

Build sustainable government institutions

Australia is helping to repair the essential machinery of government. By building affordable institutions suited to individual country circumstances good governance can flourish. With other Australian government agencies giving practical in-country advice, AusAID is fostering deep institutional and personal links between government departments in Australia and the region.

Strengthen political governance and target corruption

Australia is working with recipient governments to improve administrative systems in many Pacific nations. The main purposes are to ensure greater accountability and the stable functioning of democratic processes. Education is central. Australia's aid program supports grassroots civic education programs encouraging the demand for political accountability. AusAID's experience shows improved accountability and clamping down on corrupt activities are more likely to be achieved when there is public belief in reform.

Tackling corruption effectively and visibly is essential for maintaining public confidence in reform. Improved political accountability can only be achieved through demand for reform from within a country. Education is central to this and Australia supports grassroots civics education programs, including voter education, to build popular understanding of, and demand for political accountability.

Provide opportunities to stimulate economic growth

The majority of the poor in most Pacific nations live in rural areas. Australia is supporting activities to revitalise agriculture, forestry and fisheries, with particular emphasis on sustainable management of natural resources. It's also looking at other ways for people living off the land and water to make a better living - for example through diversification and 'value adding', such as drying of copra, and coconut oil extraction using local technologies.

Maintain the delivery of services to minimise the impact of system failures on the poor

Australia helps provide basic health and education services that would otherwise not reach poor and rural communities. Australia helps community and church organisations maintain basic services, particularly where government systems have broken down.

Investment in analysis

Australia continues to develop practical approaches to better understand what works in fragile states and how to prevent future fragility. Australia is setting up a dedicated unit comprising officials drawn from across different government agencies to promote an integrated and cross-government approach to this work.