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Column: GPP - Australia
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Today, headlines around the country loudly declared " Australia's foreign aid program hit by massive fraud", as News Ltd reporter Steve Lewis drew attention to the 175 cases of fraud currently under investigation by Australia’s foreign aid agency AusAID.
This media investigation drew attention to the very real problem of corruption in many countries that receive funding as part of Australia’s overseas aid program. However, the piece quickly dismissed the fact that AusAID has detected these incidences of corruption and is currently investigating them - a tribute to the robust fraud detection systems that they currently have in place.
The director of AusAID Peter Baxter notes that, “To claim that the AusAid program is riddled with fraud or that the vast majority of the aid program doesn’t actually reach its target is factually incorrect. We work in some of the most difficult environments on the planet, including in countries where corruption is endemic and of course there is a correlation between countries that have problem with corruption and poor government and poverty. Investigating fraud in those environments is difficult but we do that.”
While today’s article rightly noted that corruption is a real issue in delivering our foreign aid, it failed to highlight three important points:
1. AusAID has effective systems in place
AusAID has checks and balances in place to prevent, detect and investigate fraudulent behaviour. These mechanisms include the recent creation of the roles of Chief Auditor and the Director of Fraud Control within the department; risk and fraud management plans at overseas posts; transparent public tendering; promotion of the United Nations Convention Against Corruption, and sponsorship of the Extractive Industries Transparency Initiative(EITI).
It is because of these checks and balances that we know of the aforementioned cases of fraud.
2. The reported incidence of fraud is less than 0.1% of the entire budget
Lewis alleges that the cases of fraud under investigation demonstrate that Australia’s aid program is wrought with corruption. In actual fact, of the $20 billion allocated to foreign aid since 2004-05, there are estimated to be potential losses of $3.4 million. This represents only 0.017 per cent of the budget.
When compared with Australia’s Centrelink program, which has an anti-fraud success rate of 96.5 per cent (considered a successful result against their target of 95 per cent), Australia’s foreign aid program is 206 times less fraudulent.
3. Corruption is real. We need to fight it, not run from it
In the fight against extreme poverty, corruption is a significant issue. But it's important to ground our analysis in the reality that if we want to reduce its impacts on our developing neighbours, we need to continue to support foreign aid.
This isn’t to say that we shouldn’t monitor the spending of aid very closely, nor that we shouldn’t continue to urge the government to improve the effectiveness of its aid program, in fact, aid effectiveness is crucial to tackling corruption - because it allows us to maximise our impact tackling the systemic issues that exacerbate issues related to corruption.
But we shouldn't use corruption as an excuse to reduce our efforts to provide opportunities to the poorest people on our planet.
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Here at the Global Poverty Project we’re often asked challenging questions about the effectiveness of Australia’s aid program. Many of our supporters are concerned that sending expatriates to developing countries to work on projects undermines the experience of local communities and fosters dependency.
In the past, AusAid’s tendency to use Australian consultants in development projects has led to criticism of Australia’s foreign aid programme in research and the media, and even to the coining of the term ‘boomerang aid’ – referring to aid money provided to developing countries that ends up back in Australia because it is paid to the Australian consultants and companies contracted to provide services.
It’s for this reason that we welcome the announcement made early last week that the Australian government has accepted recommendations to reduce the number of technical adviser positions in the Australian aid program.
The decision was the result of a review of adviser positions that began in May 2010. It reviewed 952 positions across 20 country programs and suggested that 257 positions – a quarter of all advisers – would be phased out with the next two years, and a cap placed on maximum salaries paid to consultants. The funds previously spent on these expensive consultant services will now be reassigned to higher-priority programs, such as basic education and health service delivery and training.
While we recognise that advisers play an important role in development, particularly in fragile and conflict-affected countries, we welcome this decision as a positive step towards focusing aid on enhancing the capacity of local organisations and staff. In the past, the use of expatriate advisers in aid programs has often been considered the ‘default option’- even when other alternatives have been available.
We believe utilising and building the skills and expertise of local people is one of the most effective ways to reduce poverty. It’s encouraging to see that Australia’s aid program is looking at alternative ways to build the capacity of developing communities and reducing its reliance on in-country advisers. It’s also an encouraging sign that the government hears the public’s calls for our aid program to be focused on achieving development outcomes, rather than the service of Australia’s national interest.
We hope that further improvements in the delivery of Australia’s aid will introduced as a result of the Government’s independent review of aid effectiveness, which will be completed in April 2011. The Global Poverty Project recently submitted a submission to this review, calling for improvements to the structure and coordination of the Aid Program. You can find out more by reading our submission here. |
Posted by Nina Collins - GPP Research Team in Aid for column GPP - Australia on Feb 23rd 2011, 09:58 |
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At 1 o'clock this afternoon Tony Abbott announced the Coalition's proposed budget cuts, including a deferral of funding for Australia’s Aid program.
The proposal did not include cuts to Africa's Foreign Aid funding that had been previously suggested by some within the Coalition – which is an important victory, and evidence that messages from concerned Australians had an impact.
Shadow Foreign Minister Julie Bishop played an important role in the omission of this suggested cut, please join us in thanking her for standing up for Africa’s Foreign Aid!
However, the Coalition did propose the deferral of $448 million of funding for an Education Partnership between Australian and Indonesia.
About the Indonesia Education Partnership
The Education Partnership will give 300,000 more Indonesian children
- Assisting Indonesia to improve education quality and school management,
- Fund the construction or expansion of up to 2,000 junior secondary, and
- Deliver training to all 293,000 of Indonesia's school principals, school supervisors and district education officials.
The program is designed to give more Indonesian children a good education, and improve literacy and numeracy. Right now, the quality of education in Indonesia is still poor: 46% of year nine graduates are not fully literate, and around one-third of Indonesia’s 13 – 15 year olds don’t currently attend junior secondary school as they are too remote, expensive and teaching quality is poor.1
About education as a tool for development
Education plays a crucial role in fighting extreme poverty. It provides the platform from which an individual can take advantage of opportunities and overcome challenges in their lives. Improvements in education across countries has been the foundation of broad-based economic growth around the world.
We know that education is one of the best investments to help people climb out of poverty. Studies show that improved education leads to:
- Healthier families: with children who attend school becoming adults who make more informed health choices, live longer, and have healthier children,
- Smaller families: as educated people tend to marry later and have fewer children,
- Disease prevention: young people who have completed primary education are less than half as likely to contract HIV than those who miss out on education, and
- Increase income: for every additional year of education, girls can earn 10% more, and boys 5%.
Australia is in a good position to foster improved education in Indonesia, with the Education Partnership’s focus on improving the quality and management of education offering the chance to ensure that children not only have physical access to schools, but also have quality education outcomes.
Australia and Indonesia
Australia and Indonesia have a long history of working together to provide better education for Indonesian children. This Education Partnership is part of a broader program of support to Indonesian education which also involves the European Union and Government of Indonesia.
Indonesia has made the provision of basic education a national priority and currently spends 20% of its budget on education.2 But it still needs international assistance to meet its goal of providing nine years of quality education for all its children by 2015.
Amongst Indonesia’s population of 240 million, around 110 million live under the poverty line of $US2 a day, and millions live on just US75c a day. Right now, these people can’t access food or clean water, can’t afford basic healthcare, and are unable to educate their children.
Australia’s previous work with Indonesia’s education sector has been successful, with the 2005-2010 Education Program providing improved access to basic education through the construction of 2,000 junior secondary schools and the creation of around 330,000 new school places across the 20 poorest provinces in Indonesia.
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[1] AusAid: Education questions and answers http://www.ausaid.gov.au/country/indonesia/educationqanda.cfm
[2] AusAid: Education questions and answers http://www.ausaid.gov.au/country/indonesia/educationqanda.cfm |
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Early this morning the GPP Australia team received some disturbing news: that Opposition members would be meeting this afternoon to discuss $200 million in cuts to Australia’s Aid budget for Africa.
The Opposition’s proposed reduction to Foreign Aid would see cuts to Australia’s development work in a continent where we are positioned to have huge positive impact, and where child and maternal mortality rates are amongst the highest in the world.
This proposed funding cut would eliminate projects that would provide:
- Midwife training, obstetric care and family planning in Ethiopia, Tanzania and Southern Sudan,
- Increased agricultural productivity in Africa (an area where Australia’s experience in tropical and dryland farming is crucial), and
- Access to clean water and sanitation in Malawi and Mozambique - helping to combat preventable water borne disease (building on successful programs AusAID has conducted in Asia and the Pacific over many years).
We’ll be providing updates on discussions and announcements made during the day on our Facebook page - so follow us to keep up to date.
Thanks for your support,
Global Poverty Project Australia Team |
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The Australian Government is currently conducing an independent review of the Australian Aid Program. As part of our ongoing work to campaign for aid effectiveness, the Global Poverty Project today made a submission which you can reach below. Or, download a pdf version here (3 pages).
Structure of the Aid Program
- Health, Education & Governance. The Australian public want an aid program that is focused on delivering real results for the world’s poorest. They value the quality of health, education and governance in our country, and see these as building blocks to support countries to fight poverty. Given the size of the Australian aid program, it would be wise to focus our efforts on just a handful of sectors in which we have a comparative advantage, and a successful history. We believe that health, education and governance are well suited as these focus areas.
- Health. As Australia seeks to scale up the financial size of its aid program, it must take considerations of absorptive capacity seriously, and make significant investments in proven and effective multilateral instruments. GAVI is regularly noted as one of the most effective aid recipients, and Australia should make a significant commitment at the forthcoming pledging conference to support GAVI’s work to save 4.2 million lives in the next five years.
- Governance. Weak governance and corruption is the number one concern of the Australian public when it comes to the barriers in fighting poverty. AusAID has an opportunity, through increased support for the ANCP and NGOs in recipient countries to significantly strengthen civil society and build capacity. Further support for multi-stakeholder governance initiatives – such as the Extractive Industries Transparency Initiative, and the Natural Resource Charter – are encouraged, as is an ongoing dialogue and program of action to enlist the support of Australian companies working in recipient countries to uphold and promote good governance.
- Finish the Job on Polio and Measles. AusAID has previously cited the eradication of polio from the Western Pacific as one of its greatest successes. We wholeheartedly agree, and in tough economic times, we encourage AusAID to focus on areas where clear ‘wins’ can be demonstrated to the public. Polio and measles offer this opportunity, with both diseases having a realistic chance of being eradicated in the coming years.
- Polio is a disease that has left a legacy in Australia following the epidemics of the 1950s, scarring thousands for life, yet its global caseload has been reduced by 99% in the past 30 years. It was Australians involved in Rotary who started the worldwide push to eradicate polio a generation ago, and in 2011, we have the opportunity to finish the job. The Polio Eradication Initiative is just $810m short of having sufficient funding to eradicate polio at the time of writing, and a $50m contribution from Australia – the announcement of which could be timed to coincide with World Polio Day and Perth hosting the Commonwealth Heads of Government meeting in October – would be a huge step towards bridging this funding gap.
- Measles has had its death rate reduced by 78% since 2000, with worldwide coverage approaching levels that make imminent eradication possible. Australia can support the global push to contain and then eradicate measles by making a significant investment to GAVI.
- Focus on Poor People, not Poor Countries. Across the country, we hear loud and clear from working Australians that poverty is about people, not countries. Andy Sumner’s recent paper for IDS, the New Bottom Billion, captures this sentiment perfectly, and we encourage AusAID to focus its work on poor people, not just poor countries. 72% of the world’s extreme poor live in middle-income countries, and our program should respond to this reality, balancing investments accordingly.
- Regional middle-income countries. Focusing on poor people is particularly pertinent to our nearest neighbours in the Asia-Pacific region, several of whom have recently or will soon graduate to middle-income status. Australia has developed significant expertise in many of these countries, and should continue to focus on providing aid where necessary and effective.
Coordination of the Aid Program
- Complete Transparency of Activities & Outcomes. In the absence of information to the contrary, the Australian public make assumptions about the effectiveness or otherwise of Australian aid. AusAID should take a radical approach to transparency, and publish in full the tenders, contracts, progress, impact and evaluation reports funded by Australian aid. Australia should follow and extend on the example of the US foreignassistance.gov website, providing simple graphical tools that allow data to be interrogated by the public and the development sector. The Office for Development Effectiveness should enforce this directive, and work to provide public-friendly summary reports alongside the annual statement to Parliament.
- Locals not expats. The Australian public sees that aid is about capacity-building, and enabling locals to lift themselves out of poverty. In our work with the Australian public, we are regularly challenged with serious questions about the sustainability and effectiveness of the over-utilisation of expatriate staff, and especially the use of consultants and contractors. To the greatest extent possible, the Australian aid program should reflect the public’s desire, and the evidence base for investing in locals in preference to expatriates.
- Long-term outcomes, not short-term outputs. We encourage AusAID to focus on the long-term outcomes – three, five years and beyond – of aid programs, rather than the outputs too often used in announcements and reporting. The Australians we speak to understand that development is often slow and complex, and are dissatisfied with having the aid program being explained to them in terms of money spent and things built. Although a focus on outcomes may make project and program design slower and more costly, it will result in better development outcomes, and greater eventual value for money for Australian taxpayers.
- Aid is about poverty alleviation - and should be coordinated by AusAID. We believe that a strong, centrally coordinated AusAID is vital to having an aid program that is focused on poverty-alleviation. The contrasting examples and effectiveness of DFID in the UK and USAID provide ample evidence of the importance of this. The Australian public sees aid as a contribution by citizens to global goods, and as such, do not want to see aid used for security or diplomatic purposes. In particular, we recommend that AusAID is given control of Australian contributions to the World Bank, and that reporting and decisions on all ODA are made through AusAID and the responsible Minister.
- Public support is more than communications. In speaking to the Australian public about aid, we have found strong support for fighting poverty, but many questions about aid effectiveness and corruption. The Australian public have very few channels for engaging with issues of aid and development – most contacts are the result of charity advertising and news reports, both of which tend to focus on the negative and the need. AusAID must do more to counteract this unbalanced view of development, and should focus greater resources on community engagement – with grants/funds tied explicitly to a battery of development awareness and attitudes indicators that build support not for AusAID and bilateral aid, but for the notion of Australia as a global citizen and the importance and possibility of fighting extreme poverty.
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