Quelling Fears on Foreign Aid

It’s fantastic to see News Limited and Steve Lewis giving some mainstream news space to issues around extreme poverty, and in particular issues of Australian aid quality. It would have been even more encouraging if Steve Lewis had properly done his homework, and presented the issues minus the dramatization. This doesn’t however take away form the importance of focusing on how we can see our aid money spent well.

It is correct to call for an overhaul of aid delivery, but unfortunately Lewis’ articles do so for all the wrong reasons. The Rudd government has already backdated its commitment to increase aid to 0.5 percent of GDP by 2015. Even though the global financial crisis has been the cited argument for doing so, perhaps a more accurate interpretation is that AusAID has not had the capacity to deliver more aid.

Had the government stepped in three years ago to complete a full-scale review, questions of AusAIDs capacity could have been rectified before now. The commitment to increase foreign aid is not a new commitment; Kevin Rudd made it on the 6^th July 2007. The Government has had three years to review AusAIDs capacity. Yet given the current aid increase has been backdated to 2015 there is still ample time for AusAID to vastly improve its efficiency and effectiveness. To this end, Steve Lewis’ article has come at the right time.

The recent appointment of a new AusAID Director General Peter Baxter means it’s definitely time to review aid effectiveness delivered by our national aid body. Whilst it’s fair to argue that the Rudd government should have done more over the last three years to reform AusAID in preparation for funding increases, it is also true that the government under Bob McMullan has done more to improve the focus of our aid program than what the previous government did in ten years.

It is also good to see the article highlighting GHD, GRM, Cardno ACIL and Coffey International who receive large sums from the aid budget. Traditionally the Australian public’s focus has been on the role of NGOs like World Vision and Oxfam in the aid process. But given that NGOs receive less than 10 percent of the aid budget, the focus is now rightly moving on the contractors, which is certainly a move in the right direction.  And, as we look into contractors, we’ve got to not just look at their operations, but the requirements and benchmarks demanded by AusAID. Some contractors have told me that they have been required to pay high salaries because AusAID set the benchmark too high in this area. Lewis correctly notes this by saying “AusAID argues that it is necessary to pay such high amounts to attract top-notch consultants to live in places such as PNG.”

But, as we focus on aid quality, we can’t forget the promise we’ve made to the world’s poor. For if the global community is to be able to the achieve the Millennium Development Goals and halve extreme poverty by 2015, then Australia and other OECD nations need to increase our foreign aid to 0.7% of GNI by 2015. This global commitment, worth roughly $182 billion per annum will make a sizable dent in improving primary education, combating malaria, HIV/AIDS and other diseases, improving maternal health and combating child mortality. AusAID will spend $3.8b on aid in 2009/10. The Australian people will contribute around another $800m. It's essential that we give the Australian public a chance to hear about this, to understand the issues, and to decide what they think should be done in the future - that is why development awareness matters.

Lewis wrongly claims that millions are being spent on selling pro-aid messages to the general public. This is factually inaccurate. Campaigns such as Make Poverty History talk about the role of aid as part of a suite of policy measures such as trade, good governance, and the achievement of the Millennium Development Goals in the fight to alleviate poverty.

Australia’s successful road safety campaigns showed us that it is not enough to merely fix roads, and that there is a pressing need to invest in drivers’ education. Similarly it is not enough to simply increase aid; we need to educate the Australian public that the aid that individuals give can actually be detrimental if not given well. We all want aid to make the biggest possible difference in the lives of the worlds most vulnerable. 

To do this, we need to support Australians to think through the consequences of their actions – because, for example, donating old clothes after a natural disaster isn't good aid. Development awareness is our chance to give people the space to think about how they make sure all of their efforts in support of the world's poor will be effective.

Finally, Steve wrongly conflates the issues of aid consultants with the MDGs when he states that the reason why aid consultants get overpaid is “partly because Australia has signed up to so-called Millennium Development Goals, which includes a commitment to gender equalisation.” This is factually inaccurate. We can all agree that being paid $500K per annum to work as an aid consultant is horribly wrong and needs urgent redress. But this has absolutely nothing to do with the policy focus on the Millennium Development Goals. Indeed anyone who understands community development recognises the critical role that the empowerment of women plays in the process of poverty alleviation- the focus of MDGs 3 and 5.

For example in the 1970s in Bangladesh each woman had an average of 7 children, and she expected a quarter of them to die before their fifth birthday. But, thanks to investments in health and education and the empowerment of women through things like microfinance, fertility and deaths have dropped dramatically. Today, each woman has an average of 2.5 children, and there’s only a one in twenty chance that a child will die before their fifth birthday. The Millennium Development Goals provide an important framework for poverty alleviation.

It is wonderful that the mass media is giving attention to these issues. Let’s hope next time they consider reporting the fact that in the last twenty-five years the proportion of people on our planet living in extreme poverty has halved – from 52 percent in 1981 down to 25 percent in 2005. Progress has been made and will continue if we accelerate our efforts by giving aid well.

 Want to find out more about foreign aid? You can go to the Global Poverty Project Info Bank here.

Hugh Evans is the CEO of the Global Poverty Project.