Policy paper

UK–Indo-Pacific region development partnership summary, July 2023

Published 17 July 2023

This was published under the 2022 to 2024 Sunak Conservative government

Introduction

The International Development Strategy (IDS) places development at the heart of the UK’s foreign policy. It sets out a new approach to development, anchored in patient, long-term partnerships tailored to the needs of the countries we work with, built on mutual accountability and transparency. This approach goes beyond aid and brings the combined power of the UK’s global economic, scientific, security and diplomatic strengths to our development partnerships. Our 4 priorities are to deliver honest, reliable investment, provide women and girls with the freedom they need to succeed, step up our life-saving humanitarian work, and take forward our work on climate change, nature and global health. The Integrated Review Refresh (IR23) reiterates that sustainable development is central to UK foreign policy and sets out how the UK will go further and faster on development to reduce poverty and reinvigorate progress towards the Sustainable Development Goals (SDGs). This Development Partnership Summary details how the IDS and IR23 will be put into practice in the UK’s regional development work in the Indo-Pacific.

Regional context of the Indo-Pacific

As set out in the UK’s Integrated Review Refresh and the International Development Strategy, the Indo-Pacific is a vast and highly diverse region that is critical to the UK’s economy, security, and our interest in an open and stable international order. The region is home to over 50% of the world’s population. Economic growth is strong, and likely to be sustained. The Indo-Pacific is forecast to account for more than half of global growth over 2021-2050^{[footnote 1]}. But there are risks to long-term, inclusive economic growth and development.

In recent decades, economic growth has meant that poverty in the Indo-Pacific has been reduced but 170 million people are still living in extreme poverty (less than US$2.15 a day)^{[footnote 2]}. The region is currently not on track to achieve any of the 17 UN Sustainable Development Goals (SDGs) by 2030. In some critical areas like responsible consumption and production (SDG12) and climate action (SDG13), it is going backwards.^{[footnote 3]}

The Indo-Pacific is highly vulnerable to climate change and environmental degradation, both of which come with humanitarian consequences. This fragility is particularly relevant in the Small Island Developing States (SIDS), half are which are located in the Pacific and Indian Oceans. In 2021 alone, more than 57 million people in the Indo-Pacific were affected by climate disasters, such as cyclones and floods.^{[footnote 4]} The frequency and intensity of such events is only likely to increase, hitting the poorest the hardest.  And by the middle of this century, the one billion people who rely on three river basins in South Asia (Indus, Ganges and Brahmaputra) are likely to face severe water shortages due to climate change.^{[footnote 5]} The region is also critical to the Paris Agreement temperature goals, with its contribution to global emissions projected to increase from 33% to 45% between 2008 and 2030.

Alongside climate action, closing the gender gap and ending violence against women and girls is another UK priority. The 2022 Global Gender Gap report by the World Economic Forum ranks South Asia as lowest among the eight regions covered in the report.^{[footnote 6]} East Asia and the Pacific are ranked in fifth place, just above Sub-Saharan Africa. Modern slavery is also increasing. 60% of victims globally – some 29.3 million people – are in the Asia Pacific region, 3 million more than in 2017, with women and girls particularly vulnerable.^{[footnote 7]}

Gains to human development, including for women and girls, remain challenged by the absence of accountable, effective, and inclusive state institutions in places. Parts of the region are marked by a growth in authoritarian, illiberal, and anti-democratic forms of governance,^{[footnote 8]} eroding media freedom and freedom of expression. The capacity of some states to deliver public services for citizens, or to build resilience against climate change, health, or other threats has not kept pace with levels of economic growth.

Why and how: the UK’s development offer

The Foreign, Commonwealth & Development Office’s (FCDO’s) Indo-Pacific Regional Department (IPRD) focuses on development opportunities that go beyond country borders, for example boosting trade between countries or improving the management of shared rivers and water. A regional approach complements not only the work happening within countries and through global UK programmes, but also global initiatives (like those through the UN) and brings economies of scale.

We achieve this by working closely with partner governments, investing in programmes, using our investments to ‘crowd in’ additional resources, strengthening strategic partnerships with other regional actors, and using UK technical expertise to deliver results. We approach development with patience, tackling the root causes of shared problems to create lasting, systemic change. We use the evidence generated from our programmes to shape UK policy.

Our top priorities are:

Climate change

The central focus of our work is to help people better cope with the effects of climate change. Working closely with governments, regional institutions, cities, communities, and the private sector, we help countries access climate finance, improve weather information and forecasting, and develop urban infrastructure that is resilient to future climate shocks. We also work directly with local vulnerable communities to protect the natural environment and build resilient livelihoods. Our programmes align with the Paris Agreement and relevant COP26 commitments, support delivery of the Global Biodiversity Framework and UK International Climate Finance (ICF) commitments, and align with wider UK efforts, such as the UK’s Blue Planet Fund, which is working to protect marine and coastal environments.

Green infrastructure

Infrastructure is critical to both driving economic growth and reducing poverty, yet risks environmental degradation, air and water pollution, and carbon emissions. The region faces a major ‘green investment gap’ – the extra funding needed to ensure that infrastructure is environmentally sustainable. In ASEAN, the demand for additional green investment is an estimated $3 trillion (from 2016 to 2030). We will deliver alternative, reliable sources of finance for green infrastructure in ASEAN and the Pacific, to generate new investment and help increase energy security. And through British Investment Partnerships, the UK is also helping to create the incentives for greater private investment in green infrastructure and in broader, inclusive economic development, and investing up to £500 million in the Indo-Pacific through British International Investment (BII), the UK’s development finance institution.

Trade, energy and economic connectivity

The Indo-Pacific is home to fast-growing economies, populations and markets that will bring benefits to all, and create opportunities for UK trade and business. However, poor cross-border transport infrastructure, energy and digital links, and low levels of trade are holding back economic growth and preventing poorer communities in less connected parts of the region from lifting themselves out of poverty. IPRD works closely with partners across the region to build stronger connectivity between countries, for example supporting better road or rail connections, new cross-border energy infrastructure and electricity trading. We also help to break down barriers to trade, for example cutting ‘red tape’ to make it easier and cheaper to trade goods.

Women and girls

Gender equality is at the heart of everything we do, in line with the UK’s International Women and Girls Strategy 2023-2030. We mainstream the voice and needs of women and girls across our portfolio and deliver specific interventions to advance gender equality. For example, our Work in Freedom (WIF) programme helps to protect migrant women workers from trafficking and forced labour and our Climate Resilience Partnership Programme (CRPP) builds the resilience of women and promotes their leadership through women’s grassroots organisations. All our work complies with the Gender Equalities Act.

Humanitarian, health and food security

With its diverse geography, the Indo-Pacific is highly vulnerable to multiple hazards, from ever-stronger cyclones and extreme temperatures, to earthquakes and tsunamis as well as protracted crises, potential conflict, pandemics and the threat of food insecurity. Our health and humanitarian work will enable the UK to respond rapidly and more effectively to new crises while also supporting longer-term disaster preparedness, in line with the UK’s Humanitarian Framework for 2022 to 2025.

Key programmes

Over the past decade, our programmes have delivered on-the-ground impacts across the region. For example:

Climate

We supported over 11 million people to better adapt to the effects of climate change, through our work to improve urban infrastructure and weather information. For example, innovative, new forecasting of heavy rainfall in Nepal helped to provide early warning of potential landslides to around 700,000 people across four districts. And new forecasting for wheat disease is providing early warnings and advice to c.500,000 farmers in Nepal and Bangladesh, helping to protect their livelihoods and local food security from fungal diseases such as wheat rust and wheat blast.

Energy and connectivity

We helped deliver 1,935 megawatts of cross-border electricity transmission in South Asia – enough for around 1.5 million homes. We contributed to brokering major electricity trading agreements and new powerlines between India, Nepal and Bangladesh, helping Nepal avoid frequent blackouts in times of need, and export electricity during times of surplus. With trucks sometimes queuing for days at border crossings, incurring hefty fees while their goods perish, our work helped to reduce the time taken for goods to cross four key border posts by 20%.

Women and girls

We have reached over 710,000 women and girls through our work to tackle forced labour. Our programme partners also helped identify around 1 million vulnerable children and their families at risk of child labour and trafficking and linked them to social protection schemes and programmes.

Humanitarian

In the towns of Bagerhat and Patuakhali in Bangladesh, our support is helping to keep up to 100,000 residents safe from cyclones and water-borne diseases, while helping to increase household incomes, for example through the construction of cyclone shelters, drainage and emergency access roads. In the Pacific, we helped establish a regional risk insurance initiative to provide instant payouts to countries in the event of a disaster. For example, Tonga received a £3.6m payout following Cyclone Harold in 2020 and a £2.7 million payout following Cyclone Gita in 2018, which provided relief to 7,000 households and transport to school for 21,500 children. And in South-East Asia, we helped over 5,300 households through our humanitarian support following the devastating cyclones and flooding in 2020.

Our current work builds on this progress and IPRD’s main programmes are:

1. Climate Action for a Resilient Asia (CARA)

Investing up to £274 million to help build the resilience of economies and vulnerable communities to climate change, improve the natural environment, and promote low carbon growth across the Indo-Pacific. The programme aims to help up to 14.4 million people better adapt to the impacts of climate change and mobilise at least £1.4 billion of finance by 2028.

2. ASEAN Catalytic Green Finance Facility (ACGF)

The UK is investing up to £110 million to provide new, long-term, concessional finance for green infrastructure across the ASEAN region. This will reduce carbon emissions in infrastructure projects, increase resilience of countries to climate change, protect biodiversity, and support economic development and poverty reduction in countries across Southeast Asia.

3. Asia Regional Trade and Connectivity Programme (ARTCP)

Up to £38.5 million commitment over 2018 to 2024 to increase trade and investment across Asia by supporting cross-border transport, energy, and IT infrastructure projects, building political consensus and cutting red tape to ensure goods can pass through borders more quickly. This helps people in poorer parts of the region to access jobs, new markets for their businesses and services such as health and education.

4. Health and humanitarian

We respond to crises, for example spending £4.8 million to strengthen health systems to tackle COVID-19 and prepare for future pandemics in the Greater Mekong Sub-region or providing over £2 million in humanitarian support following the typhoons and flooding in the Philippines and Vietnam over 2019 to 2021.

IPRD also supports efforts to tackle child labour and forced labour, promote clean energy in the Pacific, and deliver new, UK-ASEAN regional programmes. And through the Conflict, Stability and Security Fund (CSSF), we work in Sri Lanka, the Maldives and the Bay of Bengal to make the region more stable, and reduce the likelihood of violence and extremism.

Who we work with

With British Embassies and High Commissions across the region, we engage with governments, making sure our regional work aligns with the priorities of the countries we work in. We also work in partnership with other major donors in this region, for example, with France and the Nordic Development Fund to support community-led climate resilience, and with Australia on water management in the Himalayas.

Many of our programmes are delivered through multilateral development banks, in particular the World Bank and Asian Development Bank, because they have a strong track record of delivery at scale, technical capabilities and credibility with governments in the region. We also work with other multilateral organisations, such as UNICEF and the ILO, regional organisations such as ICIMOD (the International Centre for Integrated Mountain Development), regional civil society and think tanks such as the Asia Foundation and Huairou Commission, and well-established British centres of technical excellence such as the UK Met Office. In addition, we support smaller, grassroots civil society organisations across the Pacific who are often appropriate for helping communities adapt to the impacts of a changing climate.

We also work closely with UK posts across the region to provide technical and programme management expertise, and ensure regional efforts complement UK objectives in country.

Financial information

Initial allocations have been set internally to deliver the priorities set out in the International Development Strategy (May 2022) and the Integrated Review Refresh 2023, based on the FCDO’s Spending Review 2021 settlement.

The department’s spending plans for the period 2022-2023 to 2024-2025 have been revisited to ensure the UK government continues to spend around 0.5% of Gross National Income (GNI) on Official Development Assistance (ODA). This was in the context of the significant and unexpected costs incurred to support the people of Ukraine and Afghanistan escape oppression and conflict and find refuge in the UK, and others seeking asylum. The government provided additional resources of £1 billion in 2022 to 2023 and £1.5 billion in 2023 to 2024 to help meet these unanticipated costs. The government remains committed to returning ODA spending to 0.7% of GNI when the fiscal situation allows, in line with the approach confirmed by the House of Commons in July 2021.

The Country Development Partnership Summaries include the breakdown of programme budgets allocated to individual country or regional work for 2023 to 2024 and 2024 to 2025. These allocations are indicative and subject to revision as, by its nature, the department’s work is dynamic. Programme allocations are continually reviewed to respond to changing global needs, including humanitarian crises, fluctuations in GNI and other ODA allocation decisions.

These figures do not reflect the full range of UK ODA spending in each individual country or region. This is because they do not include spend delivered through core contributions to multilateral organisations - and country allocations do not include regional programmes delivered by the FCDO’s central departments. Other UK government departments also spend a large amount of ODA overseas. Details of ODA spent by other UK government departments can be found in their annual report and accounts and the Statistics for International Development.

FCDO Official Development Assistance allocation

IPRD has an allocation of £24.4 million of ODA (Overseas Development Assistance funding) in the financial year 2023 to 2024, and an allocation of £50 million ODA in 2024 to 2025. 86% of IPRD’s 2022 to 2023 spend was marked as being principally or significantly focused on promoting gender equality and 5% was marked as being principally or significantly focused on disability inclusion. Our spending is closely aligned to the priorities set out in the IDS: climate, nature and health, women and girls, and BII (which includes trade, investment and growth). 8% of our spend is addressing irregular migration.

Figure 1. Indo-Pacific Regional Department 2023 to 2024 spend by International Development Strategy priority (Figures in £ million): Climate, Nature and Health, £19.59m (80%); Women and Girls, £2.95m (12%); British International Investment, £1.89m (8%).

Note: BII includes spend on trade, investment and growth, energy security and technology partnership and standards. IPRD BII spend is separate to UK investment through BII, the development finance institution.

In line with the UK’s commitments made at COP, spending on climate, nature and health will continue to grow in the future. Much of this will also benefit the lives of women and girls.

Allocated ODA budget financial year 2023 to 2024	Indicative ODA budget financial year 2024 to 2025
£24.4 million	£50 million

Note: Exact future spending may differ in response to emerging priorities, budgetary pressures or opportunities.

1. Department for Business and Trade, Global Trade Outlook 2021 ↩

2. World Bank Poverty and Shared Prosperity report, October 2022. Annex 1C (PDF 784.29KB). 169.4 million people below the poverty line living in South Asia, East Asia and the Pacific (excluding Pakistan where IPRD does not have substantive programming). ↩

3. UNESCAP, Asia and the Pacific SDG Progress Report 2022, Asia and the Pacific SDG Progress Report 2022: Widening disparities amid COVID-19 (unescap.org) (PDF, 31.48MB) ↩

4. International Federation of Red Cross and Red Crescent Societies (IFRC) 2021 ↩

5. Lutz, A.F., ter Maat, H.W., Wijngaard, R.R. et al. South Asian river basins in a 1.5 °C warmer world. Reg Environ Change 19, 833–847 (2019). ↩

6. World Economic Forum, Global Gender Gap Report 2022. The global Gender Gap Index benchmarks the current state and evolution of gender parity across four dimensions: Economic Participation and Opportunity, Educational Attainment, Health and Survival, and Political Empowerment. ↩

7. ILO, IOM and Walk Free Global Estimates of Modern Slavery, Forced Labour and Forced Marriage (PDF, 7.7MB) 2022. ↩

8. International Institute for Democracy and Electoral Assistance (IDEA) Global State of Democracy Report 2022: Forging Social Contracts in a Time of Discontent ↩