Monday, October 18, 2010

[pima.nius] What the doubling of Australian aid means for Pacific

11:37 AM |

What the doubling of Australian aid means for Pacific

Updated October 18, 2010 18:20:04

Australia's aid program is changing rapidly, and its total aid spending has doubled since 2005, and will double again by 2015.

When he was in New York last month, for the Millennium Development Goals Summit, Australia's Foreign Minister, Kevin Rudd, announced a much stronger focus on least developed countries.

Presenter: Jemima Garrett
Speakers: Professor Stephen Howes, Director of International and Development Economics at the Australian National University; Annmaree O'Keeffe, former Deputy-Director General of the Australia government aid agency AusAID; Oxfam Australia's Executive Director, Andrew Hewett

GARRETT: Despite the global economic crisis Australia and a number of other countries are substantially increasing the money they give in aid.

Speaking at a Lowy Institute seminar, last week, Oxfam's Executive Director Andrew Hewett called for a short-sharp review of Australia's aid strategy to guide the way forward.

In the context of a growing aid budget, Foreign Minister Kevin Rudd's announcement that the proportion of aid going to least developed countries would rise from .09 per cent of the Gross National Income to 1.5 per cent, is even more significant.

Professor Stephen Howes, Director of International and Development Economics at the Australian National University.

HOWES: The point-one-five of gross international income will translate into about two-and-a-half billion dollars by 2015, which is the date for the scaling up to occur by and most of those least developed countries are in Africa. So in our region, the two biggest aid recipients are not LDC's, that's Indonesia and Papua New Guinea. East Timor, Solomon Islands are, so perhaps that's about half-a-billion, but that's still leaves almost two billion for Africa. Basically the announcement means that Australia is going to increase aid to Africa by 2015 to about two billion.

GARRETT: Will that be at the expense of the Pacific?

HOWES: Oh not necessarily at the expense, because it is in the context of scaling up, but it will mean a much less concentrated aid program.

GARRETT: In the past, Australia has focused pretty tightly on Asia and the Pacific. Are we starting to see a lack of focus?

HOWES: Eh, that's certainly correct. We're losing that focus on the Asia-Pacific region and you can see why, because the Pacific only has so much absorptive capacity for aid and Asia is getting richer all the time, so a lot of poor people are in Africa. But the problem is that the aid program will become very fragmented and also that the quality of aid to Africa won't be very high, because there are already a lot of donors in Africa. It's a very crowded space and it will just increase transaction costs to have one more donor in Africa. So I think they key question is how it is done. If we do it on our own, I don't think it will be very efficient, but if we do it through a multilateral agencies and third party organisations, I think it could have a good impact.

GARRETT: Turning now to Oxfam's call for a review, a short sharp review of the aid program as this scaling up of aid funding occurs. Is that something you would support?

HOWES: Yeah, I certainly would support that. We've achieved the first doubling of the aid program from two billion to four billion between 2005 and this year and now we're starting off on the next doubling which is from four to eight or a bit more by 2015 and so I think it is certainly appropriate at this halfway point to take stock, what we achieved in the first doubling, what have been the strengths, what have been the problems, because the second doublings are going to be much more difficult. It's much harder to go from four to eight than to go from two to four.

GARRETT: So what would you like to see the review look at exactly?

HOWES: Well, I think the whole range of issues, but the first is I think it should be backward looking initially. What have been the lessons from the last five years, which we can then apply to the next doubling. But in terms of specific issues, key issues that we need to look at. I think there is one of selectivity is important, geographic selectivity, which sectors are we going to focus on. You can justify just about anything as a good aid project, but you need to be selective, otherwise you spread yourself too thinly. And then the other issues around transparency and independent evaluation. I think with increased aid budgets, we need to be putting more effort in to ensuring that we have greater effort in ensuring for money and that requires more independent evaluation.

GARRETT: Professor Stephen Howes from the Australian National University.

Annmaree O'Keeffe, former Deputy-Director General of the Australia government aid agency AusAID, agrees there is a need for a clear aid strategy and is concerned about loss of focus.

O'KEEFFE: It's very important that the priorities be identified and that once they are identified, that the government sticks to those priorities and you cannot have 20 priorities, you can really only have about a handful of priorities if you're serious about them being important.

GARRETT: Can we now turn and look at the political climate for aid. There is bipartisan support for an increasing of the aid budget at the moment. How firm do you think that is?

O'KEEFFE: I think it is very firm. It was Howard who initially doubled the budget in 2005 at the time of the last UN summit and it was Howard who actually implemented the White Paper, which is still to a degree, although lingeringly had some influence over the direction of the current aid program. So I think there has been significant bipartisan support for sometime, a recognition of Australia's international responsibilities.

GARRETT: A recent research study shows that only six per cent of Australians actually know what the Millennium Development Goals are. Is that something that the aid program should be looking to change?

O'KEEFFE: The Millennium Development Goals are particularly significant in that it is really one of the first times that the world has come together to recognise the significance and the importance of tackling poverty. Now I think you would probably find that many Australians understand the importance of that, putting something technical like Millennium Development Goals around it can actually complicate it, although it is a fairly simple concept. I think what is particularly important is getting Australians support for Australia tackling global poverty.

GARRETT: Do you think the media should share some of the blame for the low recognition of the Millennium Development Goals?

O'KEEFFE: The coverage of the Millennium Development Goals are more broadly aid issues has been really quite scarce for a very long time and it tends to only get a focus when something significant happens, like the tsunami, the Boxing Day tsunami or the Pakistan floods. But that is emergency aid, that is not a long term stuff that is really the nub of international development.

GARRETT: Annmaree O'Keeffe, former Deputy-Director General of AusAID, now a Research fellow with the Lowy Institute in Sydney.

When Kevin Rudd took over from John Howard, as Prime Minister, in 2007 he promised to deliver a second doubling of Australia's aid.

Now Mr Rudd is Foreign Minister he is still driving aid policy.

Oxfam Australia's Executive Director, Andrew Hewett, says that is not enough.

He wants a Minister dedicated solely to aid.

HEWETT: Mr. Rudd has got obvious passion, commitment and knowledge about international development and that has already been demonstrated the fact that within days of his swearing in, he was in Pakistan, looking at the impact of the devastating floods there, that he made such a high presence in New York and the United Nations Millennium Development Goals summit, that's great. Down the track, what we'd like to see is a minister for international development ideally at cabinet level. The aid program if the commitments are fulfilled will be about the fifth largest spending government department. The political accountability, the need to have that comprehensive overall whole of government approach to development would demand that we have a higher level of representation just focused on development.

GARRETT: We do have bipartisan support for the aid budget at the moment, but during the election campaign, some Liberal Party members were looking critically at the aid budget and we also now have a minority government that's dependent on a very diverse range of independents for its continued existence. Does that pose a threat to the aid budget in Australia?

HEWETT: No, I think it poses an opportunity. I think it is an opportunity for us to really build that support in parliament, but use that build support throughout the community.

Julia Bishop, the Coalition's foreign affairs person, deputy leader of the Opposition has been strongly in support of increasing the aid budget and that's great. What we need in a sense is not lose sight of the arguments and the commitments about boosting aid spending. We've got to make sure the government delivers on those, but really focus on how we can ensure that the aid program contributes to achieving the Millennium Development Goals and is part of that whole of government effort. We need to shift the discussion, assuming that we have got the commitments to increase spending and shift the discussion on the quality of the program on its effectiveness.

GARRETT: We have seen in Australia some populous debates, such as the whole debate over immigration. Do you think the Australian community is behind efforts to increase the aid budget?

HEWETT: Every opinion poll says that the Australian public supports, first of all, Australia having a good quality aid program and secondly that the level of spending, and if indeed even a great amount of spending. And what we also see is Australia is regarded as one of the most generous populations in the world. In our individual giving to non-government organisations like Oxfam, the most recent survey said we had yet another tussle with New Zealand about who was the most generous. So I think that is a pretty good picture. I think politicians and nations leaders be they on either side of the parliamentary divide should assume the Australian public's support, having a good quality aid program, a well funded aid program and more generally, want Australia help play a role to eradicate poverty and ensure that people can have access to basic human rights and basic essential services.

GARRETT: Andrew Hewett, Executive Director of Oxfam Australia.

Australia is not the only country increasing its aid budget.

Britain, despite being harder hit by the global economic crisis, has promised more.

China too is expanding its aid.

Professor Stephen Howes.

HOWES: It's not such a big donor. It's about the same size as Australia as so far as we have data and I would not say it is a very effective donor, but it is able to use that aid money pretty effectively to create goodwill and basically presents itself as very friendly, practical donor, responding with concrete initiatives and giving governments what they want. So at the United Nations summit, the Chinese premier announced a number of these concrete initiatives, for example, ten thousand scholarships over the next five years, 100 small scale renewable energy projects. And whether or not these are effective, I think we do see China as emerging and it is part of the reality now. It is going to become more and more important aid donor.

GARRETT: And how do you see the United Kingdom and the United States changing their aid programs?

HOWES: Yeah, well those two represent quite different extremes really. They are both of course facing very difficult economic and fiscal situations. The United States, therefore, is not talking about any increase in aid, but they are aiming to be more effective and they have just announced, the president himself just announced the new global development policy. It's the first time the United States has launched such a policy, which is intended to give coherence. The United States has a very complex development bureaucracy, for example, with three distinct aid agencies and the president is trying. He is not in a position to give more aid, but he is trying to make it more effective.

The United Kingdom interestingly despite being in a very difficult fiscal position. The new government has said it will increase aid to point-seven of gross national income by 2013 and not only said it will do this, but it says it will enshrine that in legislation so that they will stay at that level. So the United Kingdom is more similar to Australia. I guess the difference, where the UK is ahead of us at the moment is that the government has also at the same time is announcing these increases in volume, the new Conservative Democratic Coalition has also said they are going to put in place a number of policies to improve effectiveness, most important of which is that they are going to set up what is really like a national audit office, but just for the United Kingdom aid agency, so it's an evaluation office reporting not to the aid minister but directly to parliament, and therefore independent.

GARRETT: Is that something that Australia should consider doing to?

HOWES: Yeah, I think that is exactly the sort of thing we need to be considering as part of our next scaling up of aid, because if we want to really make a contribution to poverty reduction, it is important that we not only give more aid, but that we give more effective aid.

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