On Tuesday, the Abbott Government handed down its second budget since coming to office in late 2013 . Experts at the Lowy Institute broke it down in terms of foreign affairs, overseas development aid and the Government's assessment of the global economy. Alex Oliver on what the budget means for DFAT:

The 2015-16 budget for the Foreign Affairs and Trade portfolio evokes A Tale of Two Cities.

For aid, it's a case of the 'worst of times': the Government has cut $1 billion from overseas development assistance this financial year (as announced in the Mid-Year Economic and Fiscal Outlook), $1.35 billion in the next, and $1.38 billion in 2017-18. This delivers a total saving of $3.7 billion since the last budget and a hefty $10 billion over the forward estimates since this Government took the reins in late 2013…

…Now on to the other tale. It might be an overstatement to call this year's budget the 'best of times' for Australia's overseas representation, but it's up there.

In what appears to be a sweetener for the Foreign Minister in an otherwise unpalatable serving, Australia's diplomatic network (yes, something we at the Lowy Institute may have raised once or twice) gets nearly $100 million to add five new posts to its diplomatic footprint, bringing the total to a nice round 100.

How did Australian aid hold up under the new budget? Jenny Hayward-Jones and Philippa Brant took a look:

The Australian Government's worthy commitment to maintaining a large aid program in the Pacific in the face of severe pressure on the aid budget will no doubt be welcomed by Pacific Island countries. Australia, as the major power in a region which lacks the capacity to overcome obstacles to development alone, must take a leading role in helping to overcome these obstacles. The fact that the region has survived the most savage cut ever to the aid program sends a strong signal that Australia will not back away from its commitment to development in the Pacific.

Lastly on the budget, it seems the government's estimates may be a little optimistic, said Tristram Sainsbury:

The overall impression is of a middle-of-the-road assessment of the international economic environment over the short term for countries with important direct links to the Australian economy. It makes for an interesting contrast with the much more guarded language in other recent global economic forecasts, which have worried about the level of global growth, the weaker outlook facing emerging economies (including G20 members Brazil and Russia); and have questioned how optimistic the world really can be about medium-term global growth prospects.

Nick Bryant wrote on the re-election of the Conservative Party in the UK:

So the next five years in Britain look set to become a tale of two unions: the centuries old union between Scotland and the rest of the UK, and Britain's relationship with Europe. And although polling day produced an unexpectedly clear result, rarely has an election brought with it so much national uncertainty.

Will the AIIB provide projects and infrastructure the way the Asia-Pacific region wants it? Former Deputy Director General of AusAID Richard Moore weighed in:

There is a line of argument running in Manila that with an ADB-estimated $8 trillion worth of infrastructure required in Asia between 2010 and 2020, there is room for everyone. I am not so sure.

The national market for infrastructure borrowing is a very small proportion of the whole. Countries have hard constraints in terms of how much debt they can take on, and there are also very real capacity constraints in government and the private sector. When China recently announced a US $46 billion package for Pakistan you could hear the business being sucked out of the ADB pipeline.

Is the G20 getting serious about climate change? Hannah Wurf on the G20 and the Financial Stability Board's inquiry into the financial implications of achieving credible climate change targets:

If we are to take real action on climate change, we need a contingency plan to mitigate negative side-effects. Last year Hugh Jorgensen warned that if the G20 failed to add value to climate change negotiations it would be a missed opportunity. Pressure continues to build for an agreement at COP21 in Paris after disappointments at Lima last year. The G20 leaders' summit in Antalya this year is two weeks before the COP21 meeting. 

The G20 cannot put off climate change action any more. The FSB inquiry signifies real consideration of what a low-carbon future involves, a process that has been delayed for too long.

Robert Kelly wrote on North Korea's apparently successful test of an sub-launched ballistic missile this week:

North Korea is on its way to an 'assured second strike' capability — SLBMs can survive even a massive first strike by an opponent and allow the attacked state to respond with nuclear force. SLBMs also offer greater range. North Korea has worked on an intercontinental ballistic missile (ICBM) but has struggled with multi-stage rockets that could actually traverse the atmosphere at great distance. A North Korean submarine on station off the continental US would not need long-range missiles to bring most US cities within range.

I argued that any advancements by North Korea on a sea-based nuclear deterrent will mean increased investment in anti-submarine warfare from South Korea and other countries in the region:

However, I disagree with Kelly's argument that North Korean SLBMs 'cannot be targeted for preemption: that is the whole point of SLBMs.' I would argue that the mere existence of SLBMs, while certainly complicating defence planning for the US and South Korea, will not eliminate the preemptive strike option in the minds of policy-makers in Washington or Seoul.

The guaranteed nature of the second-strike depends on the quality of the submarine as much as on the SLBM…

….Pyongyang's test is likely to spur increased development of ASW forces in South Korea, something that has already begun happening since the sinking of the Cheonan in 2010.  Seoul may now have more cause to increase its cooperation in this area with the US, as well as Japan, the two most significant ASW powers in the region, if not globally.

Kelly also wrote a well-received piece on the internal dynamics of Kim Jong-un's regime and possible reasons why he did not make a previously planned trip to Moscow this week:

The other likely reason Kim skipped the trip is fear of a coup. His father rarely went beyond China. To do so was too risky. For this Kim, the risks are probably even higher. Kim Jong Un's crackdowns and executions since taking power almost certainly indicate that his grip on power is still shaky. He took over less than four years ago, and he was all but unknown, even within North Korea, at the time. A foreign trip is rare, enticing opportunity for elite dissenters in a regime like North Korea to act, and so I predicted earlier this year that he would not go.

Are public-private partnerships the way to close the infrastructure gap, and can the G20 help? Stephen Grenville:

Rather than funding shortages, the greater obstacle to faster expansion of infrastructure investment is the dearth of projects whose commercial viability has been firmly established by detailed assessment. Projects fail because of misforecasting of demand and construction costs, through legal difficulties with land acquisition or the myriad risks which surround large technically complex construction. Better project assessment is the key to deciding which projects are viable and to reducing the intrinsic risks. 

Elliot Brennan on the human trafficking crisis in Thailand:

What needs to happen now is the immediate and regionally coordinated rescue of the boat loads of people in desperate conditions. Secondly, in order to break up the transnational criminal networks that lead these trafficking rings, a serious and deep-rooted excision of corruption across the region is required. Better monitoring of migration across the region is also urgently needed; currently, small NGOs (not national governments or regional organisations) are collecting the data. That makes understanding the extent of the problem far more difficult.

Jokowi's surprised us with news that foreign journalists will no longer need permits to report from Papua and West Papua. Catriona Croft-Cusworth said he is hoping for some good news:

The hope from Jokowi's government seems to be that with increased investment in Papua's development, the impetus for Papuan independence and the conflict sparked by the independence movement will disappear. However, judging by the reaction in Papua so far, there's no guarantee that this will be the story foreign journalists uncover there.

John Gooding continued our Digital Disruption series and wrote a case-study of the US ambassador to Libya's use of Twitter:

But it's one thing for an official to tweet emojis and pictures of Koalas primarily to a stable and prosperous Australian audience. It's entirely another thing for a diplomat to tweet personal, emotional responses to unconfirmed reports of killings amid the chaos of a civil war, especially if locals believe the war is the result of a military intervention led by the nation the diplomat in question represents.

Julian Snelder considered a future where cyber and space warfare roll back the internet and globalisation:

Last week's report to Congress on Chinese military capabilities betrays the Pentagon's alarm as Beijing systematically builds anti-space systems. What looks to the Chinese like precautionary capabilities appear threatening in Washington. The security dilemma in space, Costello reminds us, ultimately threatens the ongoing viability of the entire internet ecosystem. If one superpower tears out the eyes of the other and retreats to its highly-degraded terrestrial-only intranet, one has to wonder if its drawbridge could ever be safely lowered again. It would effectively be the end of globalisation.

Photo courtesy of Flickr user Tony Abbott.