Australia reclassifies foreign aid to include military, peacekeeping missions

Australia will redefine what it classifies as foreign aid after learning it was not ranked as a top donor to the Philippines following Typhoon Haiyan in 2013.

Military and police deployments in humanitarian disasters and UN peacekeeping operations will now be classed as part of Australia's overseas aid spend.

The new system will be similar to the U.S. "green book" which collates all forms of U.S. assistance to other countries under the foreign aid banner, a Fairfax Media report said on Friday.

Foreign Minister Julie Bishop said the impetus for the change was learning Australia's significant military deployment to the Philippines after Typhoon Haiyan (also known as Yolanda) was not counted on top of its 37.2 million U.S. dollar humanitarian aid package.

"It's vital in foreign policy terms that Australia receives appropriate credit for our support to other nations and that the true extent of our contribution is understood at home and abroad," Bishop said.

Military deployments to Vanuatu this year, following Cyclone Pam, cost 22.4 million U.S. dollars but again were not counted along with Australia's 40 million U.S. dollar aid assistance package, Bishop said.

"I think it's misleading to only look at what strictly goes through your aid program that is defined by guidelines that I think don't recognize the diversity of how development assistance can be provided in different countries," Bishop said.

Bishop also confirmed Australian aid money would be heavily concentrated where it will have the most impact and where Australia was expected to take responsibility, which is primarily in the South Pacific.

The aid budget will be slashed by 5.8 billion U.S. dollars over the next five years, with Asian and African nations suffering cuts of between 40 to 70 percent.

Bishop said the aid budget should be concentrated on developing sustainable economic growth as, in the end, countries want "trade, not aid."

"Stronger economic growth ... is the most powerful driver for lifting people out of poverty," she said. "This has been proven in Asia, where nations recording strong economic growth have seen hundreds of millions of people lifted out of poverty."

"China and South Korea, for example, once aid recipients, are now major economies and major aid donors."

"In 2003, Thailand requested Australia no longer provide aid," Bishop said. "Instead we signed a Free Trade Agreement and bilateral trade has doubled to over 13.85 billion U.S. dollars per year -- dwarfing any aid program we could possibly have envisaged. "

Bishop did not outline whether military and police deployments in humanitarian situations, now classed as foreign aid, would be excluded from the annual cap of 5 billion AU dollars (3.85 billion U.S. dollars) announced in May. Endi