I'm not sure which side (if either) this will hurt. Historically aid was viewed as beneficial to donor countries because it was a way of buying access for trade and investment. I'm not sure if that model has survived the lowering of tariffs/free trade agreements. Australian aid to Indonesia was around 1/3000th of the Indonesian economy prior to the decision to cut it, so while individuals in indonesia will notice the cut, in a macro sense it makes virtually no difference to them. Trade between the two nations runs 3 to 1 in Australia's favour (in terms of exports), so any risk that's incurred as a result of this decision is on Australia's side.
Reaper.
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- Federal budget 2015: Foreign aid to Indonesia to be slashed
I'm not sure which side (if either) this will hurt. Historically...
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