Australian businesses work through aid budget
Australian businesses work through aid budget
By Dewi Anggraeni
MELBOURNE (JP): Australia, it seems, is determined to participate in Asia. Prime Minister Paul Keating continuously encourages Australian businesses to look toward Asia in trade and investment. However, the simple fact is, they have not been heading for Asia in droves. Asia, to many Australians in business, is still very much the realm of the unknown. Excitement abounds in there, but should one take the plunge? What if one missed the excitement bin and fell into the black hole?
While seminars about doing business in Asia always attract interest, the series of seminars hosted by AusAID (formerly Australian International Development Assistance Bureau or AIDAB) provided more focussed information for those still in doubt.
Called Aid Business, Good Business: Accessing the $35 Billion International Aid Market, the seminars held in Sydney and Melbourne on April 4 and 6 respectively, were extremely well attended. Businesses with something to offer developing countries but which hesitated to take the seemingly enormous risk, learned that money was available to help reduce this risk.
Schemes such as Private Sector Linkages Program assists to fund feasibility studies for joint ventures in developing counties. Then when the path no longer appears so daunting, in fact becomes positively alluring, the next hurdle, finance for the project, becomes surmountable also. Apart from AusAID itself, international and multilateral organizations like the United Nations, the World Bank and the Asian Development Bank are ready to provide soft loans for trade activities that fit into "development" categories.
The special feature of this series was the revelation to Australian businesses that Japan's Overseas Development Assistance (ODA) program, worth A$9.3 billion (US$ 6.8 billion) in the Asia Pacific region alone, was open to non-Japanese bidders. The two major recipients of the bilateral ODA in 1993 were China ($1.3 billion) and Indonesia ($41.1 billion), where many Australian companies would like to go but are afraid to take the first step.
Australian companies would be able to access ODA not only by being subcontractors to the Japanese consulting companies, but also by competing for the supply of goods and services for a particular project. The Overseas Economic Cooperative Fund, for instance, places the responsibility of procurement on the borrower. The borrower is then required to obtain goods and services from the international competitive market. One of the advantages of this requirement is that size of a business is not a prerequisite.
A small company with a specific expertise can easily slot itself into a project team, provided it can relate and work well with the rest of the team. Elizabeth Sayce, the Australian Trade Commissioner in Tokyo, said that opportunities for Australian companies lie especially in health, medical, education and telecommunication fields.
To assist businesses participating in specific fields, AusAID has established the ASEAN-Australia Economic Cooperation Program Linkages Stream. This scheme supports activities in priority sectors agreed between ASEAN and Australia.
The Australian government obviously wants to make sure that their businesses are well looked after. It assists with feasibility studied on joint ventures, points them in the right direction for available finance and shows them necessary techniques of accessing the market. What else do the companies need?
They need to develop relations with the appropriate bodies in the recipient country. While the banks and other aid bodies provide the money, it is the recipient country who nominates the companies to work for particular projects. Even here help is not far away. The aspiring companies can use the service of Austrade, the government's trade promotion body, who will then liaise with the appropriate bodies.
Australia has vested interest in participating in a development aid program in the region. It is good business. The Minister for Development Co-operation and Pacific island Affairs, Gordon Bilney, states that Australian aid to Indonesia alone, worth $740 million between 1980 and 1993, has generated a $1.3 billion return to the Australian economy.
To maximize the effectiveness of the business, on March 29, AIDAB changed its name to AusAID. A survey conducted showed that the agency's previous name did not deliver in terms of public recognition. Only 10 percent of respondents had heard of AIDAB and only 3 percent of these knew what it stood for.
With a more explicit name, AusAID is hoping to attract more worthy and commercially viable proposals. In 1994-95 the agency has been allocated a budget of $1.1 billion for its various development assistance schemes.
Dewi Anggraeni is a journalist and writer based in Australia.