Win-win: Australian business and international development

Australia’s business sector is a dynamic and diverse component of the national economy. It plays a crucial role not only in domestic economic growth but also in international affairs. Businesses often see things that government doesn’t see, and the relationships and networks formed by industry groups can create powerful bonds of mutual interest to augment Australia’s conventional diplomacy. Business opportunities can be a primary driver of new areas of international cooperation, particularly in emerging markets.

While Australian business clearly contributes to how Australia sees, and is seen, by the world, one key pillar of Australian foreign policy that may be overlooked by Australian business is the overseas development program.

As global development becomes increasingly interwoven with private sector capabilities, the relevance of Australian businesses to the country’s foreign aid objectives has grown significantly. This interconnection reflects a broader shift in development paradigms. A shift that recognises partnerships with the private sector are essential to achieving sustainable and inclusive growth in developing nations. In fact, Australia’s Department of Foreign Affairs and Trade states that business partnerships are critical to narrowing the annual US$2.5 trillion investment gap to achieve the Sustainable Development Goals by 2030.

Historically, international development or foreign aid was seen primarily as the domain of governments and NGOs. However, in recent decades, there has been a growing recognition of the private sector’s potential to contribute to development goals. This includes providing investment capital, creating jobs, building infrastructure, and fostering innovation. As the Australian government seeks more sustainable, innovative, and scalable approaches to aid delivery, partnerships with private sector actors offer compelling solutions. By leveraging Australian business expertise and capital, the government can enhance the effectiveness of its development initiatives. At the same time, these partnerships contribute to global stability and open up new economic opportunities for Australia, creating a win-win dynamic for both development and Australian business.

Business leaders can be a powerful constituency to support Australia’s development program, and there has been a growing acknowledgement among the business community of the links between the economy and security/foreign policy.

Australia’s international development policy recognises the multi-faceted role of overseas aid setting the objective of its development program as: “to advance an Indo-Pacific that is peaceful, stable, and prosperous. A region that is predictable—where differences are resolved by international law and norms, and where we can cooperate, trade, and thrive.”

The development program has a role in improving market access, combatting corruption and supporting the regulatory environment that impacts on business. Viewed through this lens, Australia’s development program is a tool of economic statecraft that contributes to a prosperous and stable region which in turn opens trade and investment opportunities for Australian business. For example, a 2024 study found that aid can reduce the costs and risks associated with foreign direct investment, which opens up new opportunities for donor country businesses in aid-recipient countries.

Australia’s development program not only provides much needed assistance to recipient countries, but it supports the national interest by creating a stable and prosperous regional environment, opening new markets, promoting sustainable business practices, engaging the private sector, and enhancing Australia's international reputation. All of which are beneficial to Australian businesses.

By supporting international development efforts, businesses can safeguard their economic interests while reinforcing commitments to global equity and stability. It’s a win-win.

Heather Wrathall is Senior Policy Analyst and Melissa Conley Tyler is Executive Director at the Asia-Pacific Development, Diplomacy & Defence Dialogue (AP4D).