Aid dependent and vulnerable: Vanuatu's status, agency and opportunities to emerge

Author: David Spring

Spring, David, 2017 Aid dependent and vulnerable: Vanuatu's status, agency and opportunities to emerge, Flinders University, School of History and International Relations

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Aid dependence occurs when a country relies on significant donor funding for at least a decade. The original development economists, and neo-structuralists since then, have seen this as one of the risks posed by overseas development assistance (ODA), one which should be avoided. Neoliberals see it as a necessary stage of development which can be managed in a good policy environment. These debates about transactional effects are relevant, but it is the politics of international governments which drive the ODA agenda. Vanuatu is a small island developing state in the South Pacific. Vanuatu is not inherently or historically vulnerable, but has become so as a result of interacting with the colonial and globalised international system. Following a long and unique dual colonial administration, Vanuatu emerged as a politically independent, but weakened nation in 1980. Initially dependent on ODA, Vanuatu experienced the economic volatility typical of Pacific Island Countries with exposure to natural disasters, structural economic and policy vulnerabilities and fractious politics. Dependent on a narrow set of donors, such as Australia, who use ODA in pursuit of their own interests, Vanuatu’s vulnerability was exacerbated. Notwithstanding, macroeconomic indicators were gradually improving, showing reduced aid dependence and aid saturation. However, in 2002, in response to the combination of international terrorist events, refugee arrivals and the emerging role of China, Australia implemented a sustained expansion of ODA to Vanuatu to protect its own national interests. In order to increase its sovereign agency, Vanuatu’s vulnerable position of entrenched aid dependence must be leveraged with a suite of economic, trade and foreign policies. The contribution of this thesis is two-fold. Firstly, it argues that Vanuatu is similar to other SIDS in that it is indebted within an international ODA system which preserves subservience to donors. Through an analysis of the rationale and motivations behind ODA, it will demonstrate that while there are real domestic political and human needs to meet, Vanuatu’s dependent posture towards the agenda of donor countries, is not always entirely beneficial. Secondly, this thesis shows that this dependence does not need to be permanent and that a greater degree of autonomy is possible through relationally engaging the electorate and bilateral partners on a mix of economic and foreign policies.

Keywords: aid dependence, vulnerability, overseas development assistance, Vanuatu, Australia

Subject: International Relations thesis

Thesis type: Masters
Completed: 2017
School: School of History and International Relations
Supervisor: Susanne Schech