At the heart of government efforts to promote growth through diplomacy and development assistance is always the intimate story of an individual. Muna Odh’s is a great illustration of Australia’s approach in Nepal.
A Dalit resident of Baitadi, Muna joined a “Start and Improve Your Own Business Workshop” under the Australian-funded United Nations Development Programme (UNDP)/ Government of Nepal Micro-Enterprise Development Programme (MEDEP), after spending most of her working life as a household helper. “The work was hard and the pay meagre, and people didn’t treat us very well,” she said, “I wanted to break out of this cycle.”
Micro-Enterprise Development Programme (MEDEP) gave Muna the skills as well as the financial and technical support to establish the Manakamana Vegetable Production Group. Manakamana’s vegetables were sold in local markets and business quickly boomed with each member making a profit of NPR 32,000 a month. As Muna’s circumstances improved, she was able to send her children to school and employ family members in her enterprise.
Alongside her financial gains, Muna’s self-worth and ambition grew, and she decided to contest municipal elections as a candidate under the Dalit quota. “It’s only if people like me are able to enter these kinds of decision-making positions that we can finally break free of the hold of the caste system and reach our true potential.”
Muna’s experience is a microcosm of the way diplomacy and development assistance work hand in hand to achieve economic and social growth at the personal, community, and state levels.
The line between what was traditionally understood as diplomacy and development assistance has long been blurred though purists in either camp might regard their objectives and modus operandi as distinct. For Australia, any residual gap between the two closed in 2013, when our government announced the integration of its aid agency, AusAID, with the Department of Foreign Affairs and Trade.
Explaining this restructuring of both policy and bureaucratic architecture, then Foreign Minister Julie Bishop said, “The government’s approach of economic diplomacy brings our aid program together with our foreign and trade policy priorities in the pursuit of broader economic development, which will not only support prosperity and growth in Australia but of course in the wider region.”
Foreign aid inevitably has a strategic dimension with poverty recognized as a source of geopolitical insecurity. Just as traditional diplomacy seeks to promote peace (a prerequisite for sustainable growth), economic diplomacy seeks to promote prosperity.
Where economic development has been uneven, aid is a vehicle to reestablishing and supporting viable, functioning states. Under-investment in women and girls, weak governments, low education, and poor health all constrain the ability of economies and communities to grow. But the need created by poverty is always going to dwarf the available bucket of overseas development assistance.
With a particular focus since 2013, Australia’s approach has been that the greatest tool for poverty alleviation is broad economic development and the promotion of a rules-based order that provides the long-term trust, certainty, and confidence necessary for all countries to thrive. Transparent rules, accepted norms, and international institutions provide fairness and predictability. From such solid foundations can grow initiatives to build livelihoods, provide jobs, and grow economies. These, in turn, support sustainable communities, functioning states, and a strong private sector.
Together, Australia’s diplomacy and development assistance tackle poverty and the deficiencies in global practices (for example, the World Trade Organization [WTO] reform) and national infrastructure that hinder developing economies from fully engaging in global markets. Together, they support these economies to address bottlenecks in productivity and accountability, facilitate the conditions for job creation, access global supply chains and consider innovative financing options.
The impacts of COVID-19 have underlined the imperative of effective diplomacy as well as development assistance functioning as an effective tool of diplomacy. Vaccine cooperation and equitable access are a case in point: so are the broader pandemic response and recovery.
As COVID-19 upended lives and livelihoods, Australia pivoted our development program to where we can make the biggest difference through our development strategy, Partnerships for Recovery: health security, stability, and economic recovery. In Nepal, this has included an emergency assistance package that assists the health and economic response, including work with local non-governmental organizations (NGOs) to support education needs and economic recovery. Our livelihoods support is addressing findings in United Nations Children’s Fund’s (UNICEF) Child and Family Tracker that 33% of households surveyed across Nepal in July 2021 had lost earnings or livelihoods.
We know that COVID-19 has had a disproportionate impact on vulnerable communities, including women. There is a risk that COVID-19 will reverse hard-won gains in women’s health and safety, in their economic empowerment, and their leadership and resilience with implications for overall prosperity, stability, and security. Accordingly, Australia has placed women’s leadership and participation at the core of its recovery efforts. We are also making sure our work to end violence against women and girls in the Indo-Pacific region is as effective as possible in the COVID-19 context.
Earlier this year, Australia successfully concluded its 15-year, AUD $49 million, partnership with MEDEP, which saw Muna’s life transformed. Of over 172,000 micro-entrepreneurs created by the program, 84% are women, 23% are from the Dalit community, and 80% are young people from diverse ethnicities. Of those who completed the program, 79% graduated out of poverty. In addition, MEDEP developed a legal and policy framework that embeds the micro-enterprise model countrywide.
Now, Muna’s future, that of her family, of her Dalit community, the future of every Nepali, and every Australian relies on a successful recovery from the pandemic and our shared efforts to achieve a stable, prosperous, and secure region. Australia’s vision for our region is that it is open, inclusive, and founded on trust because as global challenges mount, trust is an increasingly important commodity.
The character of the regional and international order that emerges from the pandemic will determine the security and the prosperity of both Australia and Nepal over the course of this century. And security and prosperity are most assured when poverty is alleviated, when all people are engaged in the common good, and when the movement of goods and services, people and information is as open and free as possible. Australia’s diplomacy and development assistance carefully interwoven, like weft and warp support this vision and are underpinned by the conviction that together we are stronger.
Felicity Volk brings a distinguished near 40-year career in diplomacy, having joined the Department of Foreign Affairs and Trade (DFAT) in 1989. Her postings span Bangladesh, Laos, and Nepal, most recently serving as Australian ambassador to Nepal (2021–24), alongside a range of Canberra-based roles. She ran the office of Australia's Global Ambassador for Women and Girls and led the Secretariat for the New Colombo Plan, sending ten thousand Australian undergraduates to the Indo-Pacific annually for work experience and immersive study. Throughout her career, Felicity has developed deep expertise in international development, cross-cultural engagement, and advocacy for equity and inclusion. Outside of diplomacy, she is a published novelist, a creative passion that continues to shape her days in retirement.
