The OECD must live up to its obligations to the developing world

There is no doubt that abhorrent acts of September 11 have significantly changed the western world’s most commonly held views on peace, security and justice. In this context it is no surprise that Treasurer Costello has chosen to place a significant emphasis on Australia’s security in this year’s aid budget.

What is surprising however is that the budget manifestly fails to increase Australia’s efforts to tackle some of the key drivers of global insecurity – poverty and inequality – through better resourcing our overseas aid program. Australia’s aid program will remain at record low levels in 2002-03, representing only 0.25 per cent of GNP, well below the United Nations target of 0.7 per cent of GNP.

The reality is that a world where three billion people survive on less than $2 a day and 900 million cannot read or write will never be a safe place for all - no matter how much we spend on defence and airport security. In recent months virtually every astute world leader has drawn connections between the September 11 acts of terrorism, the rise in violent extremism, and the global crisis of poverty, inequality, failed diplomacy and persistent humanitarian need. The crisis in global security has been linked to the crisis of globalisation, whereby the exclusionary effects of unregulated trade have led to extreme polarisation and frustration around the world. This has led to ambitious proposals to radically shift the patterns of globalisation to benefit the poor, and to create a more just and inclusive approach to development.

UN Secretary Kofi Annan, European Commissioner Chris Patten and British Prime Minister Tony Blair have all called for measures such as a global compact for development and a new engagement with the Muslim and Arab worlds. British Chancellor Gordon Brown and Canadian Finance Minister Paul Martin have called for a doubling of international aid whilst US President Bush recently announced significant increases in the United States overseas aid program.

Current events in Afghanistan highlight the need to also deal with the root causes of conflict and insecurity if the effort to stop acts of terrorism and to achieve global peace and prosperity is ultimately to be successful. It is not sustainable to have billions of people excluded from basic opportunities, to have dozens of states and millions of people left to fester in conflict, for half the world to get richer while the other half gets poorer. These issues will not go away, and their consequences will be ever greater if they are not systematically and definitively addressed.

It is not only a moral imperative, but also in the security interests of the world community to address these fundamental rifts. A recent study calculated that it would cost $100 billion per year to halve the proportion of world’s people living in poverty and to achieve universal primary education by 2015. If all OECD countries fulfilled their commitment to dedicate 0.7 per cent of their GNP to development aid, there would be $200 billion available for development assistance - double what is required to see a significant reversal of the current impoverishment in the world.

What is also disturbing about this week’s aid budget is the extent to which domestic political imperatives could potentially distort our aid program in future years. Over the next five years Australia will spend $1.2 billion on the Pacific Solution, which to date has achieved nothing for regional development and security in our region. In this context, it is not surprising that Narau – currently hosting an Australian funded immigration detention centre and a country with one of the world’s highest per capita incomes over past decades – will next year receive a 197 per cent increase in Australian aid - the largest percentage increase in financial support for any country receiving Australian aid.

It is true that aid by itself is no panacea. As a force for human development, trade can be more important than aid. A mere 2 per cent increase in the exports of developing countries would generate $150 billion, or three times annual aid flows. However, aid programs targeting education, primary health care, basic infrastructure and access to clean drinking water are all important prerequisites for developing countries to emerge from the poverty and marginalisation that drives extremism and to begin to participate in the global economy.