Western aid cuts cede ground to China in South-East Asia: study
SYDNEY: China is set to expand its influence over South-East Asia's development as the Trump administration and other Western donors slash aid, a study by an Australian think tank said Sunday (July 20).
The region is in an "uncertain moment", facing cuts in official development finance from the West as well as "especially punitive" US trade tariffs, the Sydney-based Lowy Institute said.
"Declining Western aid risks ceding a greater role to China, though other Asian donors will also gain in importance," it said.
Total official development finance to South-East Asia - including grants, low-rate loans and other loans - grew "modestly" to US$29 billion in 2023, the annual report said.
But US President Donald Trump has since halted about US$60 billion in development assistance - most of the United States' overseas aid programme.
Seven European countries - including France and Germany - and the European Union have announced US$17.2 billion in aid cuts to be implemented between 2025 and 2029, it said.
And the United Kingdom has said it is reducing annual aid by US$7.6 billion, redirecting government money towards defence.
Based on recent announcements, overall official development finance to South-East Asia will fall by more than US$2 billion by 2026, the study projected.
"These cuts will hit South-East Asia hard," it said.
"Poorer countries and social sector priorities such as health, education and civil society support that rely on bilateral aid funding are likely to lose out the most."
Higher-income countries already capture most of the region's official development finance, said the institute's South-East Asia Aid Map report.
Poorer countries such as East Timor, Cambodia, Laos and Myanmar are being left behind, creating a deepening divide that could undermine long-term stability, equity and resilience, it warned.
Despite substantial economic development across most of South-East Asia, around 86 million people still live on less than US$3.65 a day, it said.
"The centre of gravity in South-East Asia's development finance landscape looks set to drift East, notably to Beijing but also Tokyo and Seoul," the study said.
As trade ties with the United States have weakened, South-East Asian countries' development options could shrink, it said, leaving them with less leverage to negotiate favourable terms with Beijing.
"China's relative importance as a development actor in the region will rise as Western development support recedes," it said.
Beijing's development finance to the region rose by US$1.6 billion to US$4.9 billion in 2023 - mostly through big infrastructure projects such as rail links in Indonesia and Malaysia, the report said.
At the same time, China's infrastructure commitments to South-East Asia surged fourfold to almost US$10 billion, largely due to the revival of the Kyaukphyu Deep Sea Port project in Myanmar.
By contrast, Western alternative infrastructure projects had failed to materialise in recent years, the study said.
"Similarly, Western promises to support the region's clean energy transition have yet to translate into more projects on the ground - of global concern given coal-dependent South-East Asia is a major source of rapidly growing carbon emissions." - AFP
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Straits Times
2 hours ago
- New Straits Times
Abang Johari: Federal-state ties remain strong for Sarawak's progress
MIRI: Sarawak Premier Tan Sri Abang Johari Openg has reiterated that the close cooperation between the state and federal governments would continue in the common interests of both the country and Sarawak. He said the Gabungan Parti Sarawak (GPS) government, which he leads, appreciates the cooperation currently enjoyed between the state and the federal government under Prime Minister Datuk Seri Anwar Ibrahim. "In fact, at the federal level, Sarawak is represented by a deputy prime minister, namely Datuk Sri Fadillah Yusof, in addition to other ministers from Sarawak," he said in his speech at the Sarawak Day celebration here yesterday. He expressed confidence that Sarawak's efforts to achieve greater prosperity would not undermine the wider national objective of advancing the country's overall development. He said the increase in Sarawak's revenue, particularly through the Sarawak Sales Tax (SST), would not diminish the country's revenue as the federal government has sufficient avenues to boost national income without burdening the people. Abang Johari said the GPS government would continue to fight for Sarawak's rights under the Malaysia Agreement 1963 (MA63) through ongoing negotiations with Putrajaya. "Sarawak has successfully regained nine rights under MA63 and the GPS government will continue its efforts to restore all rights that have been eroded over the years," he said. He noted that Sarawak started as a state with many shortcomings and widespread poverty, especially in rural areas, during the formation of Malaysia. "Now we are grateful that Sarawak's economy has shown very encouraging growth," he said, adding that last year Sarawak recorded its highest ever revenue of RM14 billion compared to RM13.3 billion in 2023. He said this year he had presented the largest budget in Sarawak's history amounting to RM15.8 billion, opening up opportunities for a more inclusive economy. "Under the powers provided by the Federal Constitution, the state has begun to enjoy more of its oil and gas revenues through the SST imposed on petroleum products as well as through profit sharing between Petronas and Petros," he said. The premier said the World Bank had recognised Sarawak as a high-income region for three consecutive years since 2022 based on a Gross National Income (GNI) per capita of RM73,100 (US$17,000) in 2024, a figure that surpasses the threshold of RM63,800 (US$15,000) set by the bank. He said this status had placed Sarawak in fourth position after the Kuala Lumpur and Labuan and Penang, surpassing Selangor. He said the state government would continue to ensure Sarawak's resources are given added value through the creation of downstream industries, particularly in the oil and gas sector, guided by the long-term Sarawak Gas Roadmap (SGR). He expressed confidence that when fully implemented within 10 years the SGR would attract investments worth RM300 billion and generate RM120 billion in output from the product and service chain. "New industries will also be created, especially in the renewable energy sector, to generate up to 15,000 megawatts of energy by 2035, not only for domestic consumption but also for export to Asean countries," he said.
Malaysia Sun
2 hours ago
- Malaysia Sun
Ukrainian PM claims corruption problem overemphasized
Yulia Sviridenko has dismissed concerns about widespread graft amid a clampdown on oversight agencies New Ukrainian Prime Minister Yulia Sviridenko sought to downplay longstanding concerns about corruption in the country in an interview with Bloomberg published on Tuesday. An escalating clampdown on independent anti-graft agencies has drawn international scrutiny. Sviridenko cited recent polling data suggesting that while most Ukrainians believe corruption is widespread, far fewer report encountering it directly. "To be frank, within Ukrainian society and certain social groups, the issue is being amplified and overemphasized," Sviridenko claimed in the interview, without elaborating. On Monday, Ukrainian security officials raided the offices of the country's independent anti-corruption agency, the NABU, arresting two investigators. Established in 2015 as part of judicial reforms aimed at aligning Ukraine with Western standards, the NABU has long been seen as one of the country's few credible anti-corruption institutions. The raids have sparked "serious concerns" from the ambassadors of the Group of Seven - Canada, France, Germany, Italy, Japan, the UK, and US - who said the issue would be formally raised with the Ukrainian leadership. On Tuesday, lawmakers added to the concerns by approving draft legislation that would place the NABU and the Special Anti-Corruption Prosecutor's Office (SAPO) under the authority of the general prosecutor, who is appointed by the president. Bloomberg described the bill as one that could "potentially cripple efforts to tackle high-level graft." Reuters cited a Western diplomat calling the developments "the most dangerous moment yet" for Ukraine's anti-graft institutions. Kiev, the diplomat said, was "testing the limits" of its Western allies "more and more." The European Commission also voiced alarm, emphasizing that the agencies must "operate independently public trust." Brussels has long identified corruption as a major obstacle to Kiev's EU membership ambitions. Ukraine has developed a reputation for endemic corruption, a problem that has worsened since the escalation of conflict with Russia in 2022, as the defense sector has been rocked by procurement scandals and donors have demanded greater transparency. In April, US National Security Adviser Michael Waltz called for tighter oversight of US financial aid, describing Ukraine as "one of the most corrupt nations in the world." (
The Star
4 hours ago
- The Star
Resort, service provider link booking systems for seamless trips in Malaysia
(From left) Boon, Lee and Liu with the signed agreements. AN integrated resort and a global travel service provider have signed two landmark memoranda of understanding to strengthen their strategic collaboration. The agreements between Resorts World Genting (RWG) and Group aim to boost Malaysia's inbound travel, leveraging the latter's global audience as RWG's top supporting online travel agency (OTA). The agreements marked a major milestone in connectivity, marketing innovation and market-specific engagement, reflecting a commitment to delivering seamless, personalised and elevated travel experiences for international tourists, according to a media statement by RWG. One feature is the direct integration between and RWG's hotel and theme park booking systems, enabling real-time inventory updates, instant confirmations and rate parity across platforms, providing a streamlined booking experience. customers will enjoy exclusive offers and enhanced convenience when planning their visit to RWG. RWG sales, marketing and public relations executive vice-president Spencer Lee said, 'We are witnessing strong travel momentum across the region, especially Malaysia, and our partnership with enhances our ability to meet this growing demand. 'We are well-positioned to offer a streamlined travel journey supported by exceptional leisure, hospitality and entertainment offerings.' There will also be a series of marketing campaigns to drive awareness of RWG among international travellers, with a focus on the Asian market. These collaborative campaigns, ranging from flash sales to member-exclusive deals, will be powered by traveller insights and vast marketing ecosystem. 'We are delighted by this strengthened partnership with RWG, enhancing our product offerings with one of Malaysia's most recognised hospitality brands,' said Boon Sian Chai, managing director and vice-president of international markets. 'Malaysia is a key growth market for and this collaboration reflects our ongoing commitment to supporting its tourism sector. 'As a one-stop travel platform, we are focused on delivering a seamless end-to-end user experience, from planning to booking to travelling.' attractions and tours general manager Chase Liu said, 'We are proud to be the first OTA to implement direct integration with RWG, which will make it even easier for our customers to easily discover and experience local hotspots. 'We are confident that our joint efforts will not only boost RWG's presence in key international markets, but also further reinforce as a leading travel services provider providing access to top-tier attractions.' The collaboration was also a strategic move in anticipation of Visit Malaysia 2026, supporting Tourism Malaysia's mission to promote the country as a top travel destination, the statement added.
