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Australian business urged to invest in the Pacific

Australian businesses are being urged to boost investment in the South Pacific on the back of Scott Morrison’s record $1.4billion (US$955 million) aid programme, which is being targeted to lift living standards and drive economic growth across the key strategic region.

Analysis of foreign aid procurement contracts since August last year reveals more than $314million (US$214 million) has been distributed to companies providing specialised advice to ­Pacific nations and building roads, sports fields and school buildings.

In a speech at an Investor CEOs event, Minister for International Development and the ­Pacific Alex Hawke said there was “potential for public-private partnerships” to deliver better healthcare services, affordable housing and improved sanitation across the South Pacific. “Australia has a fundamental national interest in a Pacific that is secure strategically, stable economically and sovereign politically,” he said.

Hawke said the Prime Minister’s Pacific step-up was committed to supporting the delivery of electricity, clean water and internet access to a wider catchment of Pacific communities, which would help boost productivity and attract investment.

He said the government was working on developing “more flexible and targeted ways to partner with the private sector”.

“We want to address some of the barriers to investment in the region, and improve the risk-­return ratios for investors,” he said. “We want to encourage enterprises that deliver ongoing development benefits, generate profit and build up the private sector.”

The Australian understands, as strategic funding increases across the South Pacific, the Morrison government will support a more diversified approach to expenditure in the region aimed at maximising “value for money”.

Leading domestic firms Cardno, Palladium International, DT Global and Coffey International Development claimed the largest contracts over the past year. In ­addition to the deployment of ­advisers — some of whom claim tax-free salaries with accommodation and transport provided — foreign aid has been allocated to provide cyber security and technical support for Pacific nations.

In his speech, Hawke said while Australia and Pacific island nations may not “agree on everything” there was a commitment to “work together to unlock the ­Pacific’s opportunities”.

“The Pacific Islands face some obvious economic challenges: small markets, vast distances, and some very difficult terrain. Pacific Islanders know what they need from us to boost their economies,” he said. “They appreciate the ­integrity we have always brought to infrastructure: not only building roads, markets, ports and schools, but making sure they are affordable, fit for purpose and properly maintained.”

The Department of Foreign ­Affairs and Trade Office of the ­Pacific told The Australian the government was providing a record level of aid in the Pacific distributed to contractors engaged on a “competitive basis to ensure maximum value for money”.

“The government encourages any Australian companies with the right capabilities to consider bidding for aid contracts and ­becoming part of Australia’s step-up in the Pacific,” DFAT said.

Scope Global chief executive Catherine Molitor said the sector had seen a renewed interest in the Pacific since  Morrison took ­office. Scope Global, which works extensively in the region and has been awarded multiple contracts providing advisers to nations ­including Nauru, Tuvalu, Kiribati and Tonga, employs 70 South ­Pacific workers. Molitor said the contracts were aimed at creating local jobs and were “valuable in that they provide practical skills to partners in the Pacific”.

“These programmes help create jobs, develop their economies and increase growth in GDP,” she said.

In recent months, the Australian Council for International ­Development has warned that outsourcing of foreign aid has undermined Australia’s national interests. ACFID chief executive Marc Purcell said the biggest issue for delivering the Pacific step-up was cuts to DFAT.


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