There's a little sentence in the Asian Century White Paper that could have a big impact on Australia's aid program. It reads:

By 2025, four of the 10 largest economies in the world will be in the region – China (first), India (third), Japan (fourth) and Indonesia (tenth).

We hear a lot about Chinese and Indian growth, but it's Indonesia that stands out in this group because it also happens to be the largest recipient of Australian Government foreign aid. Looking across the rest of Asia, the White Paper is also upbeat about the growth and prosperity of other Southeast Asian countries.

What does that mean for the future of Australia's aid program, with its sharp geographic focus on Asia? Currently, just under one in three Australian aid dollars goes to Asia. In line with the Government's commitment to increase the aid budget to 0.5% of Australia's gross national income by 2016, aid to East Asia will increase by almost 50% over the next four years.

This region just happens to be home to the fastest growing economies on earth, and that's good news. But it is a development that needs to influence Australia's aid policy. This became starkly clear at a series of roundtables and seminars hosted by the Lowy Institute and ANU's Development Policy Centre last week with the Asia Foundation. The aim of the series was to look at why and how these growing Asian economies are implementing their own development cooperation programs, with expert speakers from China, India, South Korea and Indonesia outlining their respective countries' programs.

This rise of Asian development cooperation programs is in step with the expected staggering rise of Asia more broadly ('staggering' is the White Paper's term, not mine) and it leads to three important implications for Australia's aid program.

The first is a geostrategic implication. Australia has traditionally viewed itself along with New Zealand as an outrider in a developing and at times unstable neighbourhood. As a result, one important element of the Australian aid program, along with humanitarian assistance and poverty reduction, has been to support and protect Australia's national interest in this challenging terrain.

It's time to rewrite that narrative as Asian economies discard the 'developing' tag and offer alternative development models based on their own successful efforts to grow their economies.

The second implication is linked to the aid program's aim to reduce poverty. Again, the traditional narrative reinforcing the geographic focus on our neighbourhood has been that the bulk of the world's extreme poor live in Asia. But the astounding success of the region in addressing extreme poverty means that instead of more than half of Asia living in extreme poverty, which was the case in 1990, the percentage will be less than 10% by 2015. Instead of almost 1 billion Asians existing in awful circumstances, the number will be down to 159 million. 

This doesn't mean the fight against poverty is over; instead, the battleground has changed. Rather than the poor living in low income countries, the majority of them (60%) are living in newly emerged economies. So the question of inequity within increasingly wealthy countries becomes the focal point and demands a new relationship between development partners.

The third implication is linked to my original question. With the projected economic growth in Asia, what should Australia be doing with at least some of the one-third of its aid budget now dedicated to Asia? Doesn't this open opportunities for moving away from 20th century thinking about aid, and adopting innovative responses to the global issues affecting all of us, such as climate change, access to clean water and transboundary health issues?

As the international community considers what will replace the Millennium Development Goals, which reach their deadline in 2015, there is a rare opportunity to use the Asian Century dynamics to discard outdated post-colonial and post-Cold War approaches which still meander through the aid and development world.

Photo by Flickr user CHAIWATPHOTOS.