Be it through trade, tourism or migration, Pacific countries are integrated into the global economy. As it has reeled, Pacific countries have felt the effects. Best estimates are that the pandemic will cause extreme poverty to rise steeply in the region.

Aid will be important as the Pacific responds to the COVID-19 challenge. All but two of the Pacific’s 12 aid recipients are among the world’s 25 most aid-dependent nations. This means that Australia’s aid response matters. Australia is by far the largest aid donor to the region, giving between four and five times as much aid as the two next largest donors — New Zealand and China.

It’s hard at present to make a well-informed assessment of Australia’s current COVID-19 aid response in the Pacific. The best assessments of aid can only be made post hoc: if and when good evaluations are made public.

With this caveat in mind, Australia’s immediate response appears to be quite good. It is in the process of helping Papua New Guinea respond to its outbreak. Australia has also provided much-needed rapid financing for Pacific governments in economic distress. As Stephen Howes has written, much of what is promised in the Australian Aid Program’s strategy for addressing the pandemic sounds sensible.

There are issues though.

The first is Australia’s overall aid budget. Right now, there is a desperate need for aid — both in the Pacific and globally. This isn’t just to do with COVID-19. All of the global issues that existed last year are still here. Yet, unlike neighbouring New Zealand, the Australian government is showing no sign of increasing its overall aid budget. This means that every increase has to be offset by a cut.

For example, Australian aid to ‘Gavi, the Vaccine Alliance’ has gone up. But funding for the World Bank’s International Development Association (IDA) has been cut by over AU$140 million (US$100 million). Gavi is a good cause, but so is the IDA — it is a key pillar of the multilateral system, which issues grants and highly concessional loans to the world’s poorest countries. Australia now gives less to the IDA than Saudi Arabia.

Australian aid to the Pacific will likely go up. This is good news for the region, but it also means aid somewhere else will be cut. This will be unhelpful for the countries suffering aid cuts. But it won’t help the Pacific either. Pandemics are global. If the virus persists in one place, its effects — economic spill-overs, border restrictions, instability — will be felt everywhere.

If Australia really wants to help the Pacific, it needs to be a global citizen. Australia can afford to increase its aid budget — aid currently represents less than one per cent of federal spending. A modest increase would be fiscally irrelevant.

The other issue is China, whose presence as an aid donor in the Pacific has spooked Australia’s political elite. China’s spending is part of a broader geopolitical contest. Its vying for influence is not limited to the Pacific. Aid is not the only tool used by China, nor is Australia the only power responding to China’s rise. But as a consequence, Australia has become increasingly geostrategic in its aid giving.

China and Australia’s aid jostling has continued as COVID-19 has spread. In the short term, this may not matter — for now, all parties seem focused on the pandemic. In the medium term though, Pacific countries will emerge from the pandemic poorer and more heavily indebted. Their need for effective aid will be acute. And it will be crucial that Australia focuses its aid on helping, not geostrategic wrestling. There is good evidence that aid focused on geostrategic gains is less effective in promoting real development.

Australia’s real comparative advantage over China in the Pacific is its soft power that comes from being known and liked and from having been a major and mostly helpful presence in the region for decades. China’s infrastructure projects seem impressive, but they are often poorly conceived, built by Chinese workers (a source of resentment) and associated with debt. They are not likely to leave China well-liked by the people of the Pacific. Chinese money may buy short-term support from political elites, but such support won’t be enduring. Relationships of convenience are no substitute for genuine goodwill.

Australia is well-placed in genuine goodwill terms in the Pacific but to secure it, it should reach out with more aid that helps. This will be the challenge in the post-COVID-19 decades. If Australia gets it right, it will both aid its neighbours and earn influence.

Terence Wood is a research fellow at the Development Policy Centre, Crawford School of Public Policy, The Australian National University.

This article is part of an EAF special feature series on the novel coronavirus crisis and its impact.