Chapter Six: Multilateral Replenishments

Targeted support for effective multilateral organisations complements and reinforces Australia's bilateral aid efforts. Australia's partnership with these organisations influences the international development agenda in important areas, particularly donor coordination, cross-border issues, good governance and sound economic policies. Multilateral organisations are also able to mobilise and coordinate donor resources to address major humanitarian and reconstruction needs, especially for countries emerging from conflict.

An important component of Australia's aid program is multi-year commitments to multilateral replenishment funds, including for example the International Development Association (IDA), the Asian Development Fund (ADF) and the Global Environment Facility (GEF). In 2003-04, no new commitments are scheduled to be entered into, although cash drawdowns against the previous commitments will continue to be made.

Multilateral Development Banks¹

Asian Development Fund - Asian Development Bank	$100.9 million
Heavily Indebted Poor Countries	$1.8 million
Initiative International Development Association - World Bank	$129.3 million
International Fund for Agricultural Development	$3.0 million
Total Multilateral Development Banks	$235.0 million

Multilateral development banks (MDBs) are major sources of development assistance and play an important role in poverty reduction in the Asia-Pacific region. Their lending and technical assistance programs as well as the Heavily Indebted Poor Countries (HIPC) Initiative complement and reinforce Australia's bilateral aid program. In 2003-04, Australia will contribute $235 million to the MDBs.

In 2003-04, Australia will continue to work with the ADB and the World Bank to progress their reform agendas and ensure their ongoing engagement in the region. Australia will also continue to actively encourage the ADB to engage with poor performing states in the region, and to strengthen its poverty reduction focus. Developing a stronger country focus to better respond to the needs of its developing member countries, and strengthening NGO and civil society partnership are goals which Australia strongly supports.

Similarly, Australia will work with the World Bank and donor partners to increase the tailoring and effectiveness of the Bank's programs and products in the Asia-Pacific. The Low Income Countries Under Stress Initiative (LICUS) is the World Bank's major strategy to assist poor performing states. The strategy emphasises the importance of tailored approaches, and the need for donors to remain engaged. In 2003-04, the World Bank will pilot the strategy in seven countries, including Papua New Guinea. AusAID and the World Bank will share experiences and lessons learnt from this work.

Cooperation at both a policy and program level between MDBs and Australia helps to increase the impact of our assistance. In Papua New Guinea, the World Bank, ADB and Australia are developing a coherent joint strategy for future engagement. Australia is also working closely with the World Bank on information and communication technologies, most prominently through the $200 million Virtual Colombo Plan.

The next replenishment negotiations for the Asian Development Fund and the International Development Association (the concessional lending arms of the ADB and World Bank) will commence in 2003-04. These negotiations will provide an opportunity for donors to review past performance and to agree on key policy directions for the next few years. Australia will also be pursuing more effective cooperation with both the World Bank and the ADB through expansion of strategic cofinancing partnerships.

International environment programs

Australia's international environment programs support a global approach to environmental challenges such as ozone depletion and climate change. This support is an integral part of a whole of government approach to meeting Australia's obligations to international environment conventions and organisations.

Australia will continue to support the Global Environment Facility (GEF) to address global environmental concerns, including climate change, biodiversity loss, degradation of international waters, ozone depletion, land degradation and persistent organic pollutants. Cash contributions to the GEF in 2003-04 will be $14.6 million.

In 2003-04, Australia will contribute $5.9 million (cash) to the Montreal Protocol Multilateral Fund (MPMF) to assist with global efforts to repair the ozone layer. The Fund is assisting developing countries phase out the use of ozone depleting substances by 2010.

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1 Figures for the MDBs are calculated on a cash basis. Refer to Technical notes for further details.