China’s growing influence across Southeast Asia needs to be countered by an increase in Australia’s aid budget to the region, say increasing numbers of experts.
As a result, the Scott Morrison government is preparing to pour hundreds of millions of dollars into Southeast Asian countries to boost their economies in the wake of Covid-19.
Canberra is still considering the package details, with the final decision on cost and scope to be made in the coming months.
The package will focus on countries along the 5,000km Mekong River, including Cambodia, Laos and Vietnam.
Australia last year agreed with its “Quad” partners – Japan, the US and India – to work together to promote infrastructure development in the Mekong region.
This year, a US government report found Chinese dams are holding back huge amounts of water in the Mekong, worsening a severe drought in downstream countries, and shrinking the width and depth of the river flowing through cities like Vientiane, capital of Laos.
In recent years Beijing has been steadily expanding its influence over smaller and generally poorer countries in the region including Cambodia and Laos.
Vietnam has been pushing back against China’s assertiveness, including its expansion in the South China Sea.
Australian financial aid to Southeast Asia has fallen over the past five years. Many experts think this was strategically misguided.
Bridi Rice, director of policy and advocacy at the Australian Council for International Development, told the Sydney Morning Herald that cuts to development and diplomacy in Southeast Asia had “undermined our friendships and influence at a time when we should have been scaling up”.
“Strategically, that was short-sighted,” she said. “The Australian government has now set out an ambition to re-engage and become a partner of choice. We must move decisively to fulfil that ambition and re-establish our credentials.”
According to a report by the Brookings Institution this year, China dwarfs both Australia and the US in infrastructure financing in Southeast Asia.