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Overseas aid belongs abroad

By Tim O'Connor - posted Friday, 28 April 2006

The White Paper on Australian aid provides a rare opportunity for Australia to begin tackling the structural issues that keep half the world's population living on less than US$2 a day.

Of course, Australia alone won't solve the problem of international poverty, but a global groundswell is building that could really "make poverty history," and Australia is being left behind. The White Paper provides a chance to re-focus our aid program and join this global movement.

Many would be surprised to hear that poverty alleviation is not already a key focus of our aid dollars. “To advance the national interest through the alleviation of poverty and the promotion of sustainable development” is the official AusAID objective. Notice how “national interest” is the lens through which our aid is delivered?


Too often, this means our aid program is a slave to other competing interests - supporting commercial advantage for Australian businesses and/or the security interests of our government - rather than addressing the issues that will really impact on global poverty.

If we really want to stand with the international community who are actively challenging poverty, we need to remove the domestic focus that the “national interest” lens creates.

When Foreign Minister Alexander Downer was appointed back in 1996, one of the first things he did was review the Australian aid program. Short-term commercial interests - or sops to local business via lucrative aid contracts - were well known to be undermining the effectiveness of our aid.

Yet a decade after the foreign minister released the report “One Clear Objective: Poverty Alleviation Through Sustainable Development,” Australian aid has snuggled back into the arms of Aussie business.

An AusAID official, Dereck Rooken-Smith, stated recently that over 90 per cent of our aid contracts are delivered by Australians. Much of the value of these contracts “boomerangs” back to Australia in the form of wages for consultants and profits for aid delivery companies.

A recent example of aid being diverted to promote Australian businesses is the deployment of $1.4 million worth of AusAID contracts to employ AWB associates Trevor Flugge and Michael Long to support Australian wheat interests in Iraq. According to Prime Minister John Howard, AWB associates were employed to protect our Iraqi wheat markets from US competitors. While a case can be made for the government supporting Australian business interests overseas, it is immoral, unethical and quite possibly illegal that our aid program was co-opted for these ends.


Another worrying trend in the aid program is the use of “national interest” to advance Australia’s security interests. This financial year $891 million out of the total $2.4 billion aid budget is allocated to “governance” projects. Typically, these are heavily focused on the law and justice sectors - part of a newly interventionist aid program aimed at stalling the descent of “failing states.”

The rationale for intervening in “failing states” is to stem the threat they pose to Australia’s security, rather than address social unrest and instability in low-income communities. This is evident in the case of the Solomon Islands. The initial law and justice focus of the Regional Assistance Mission to the Solomon Islands (RAMSI) succeeded in stalling local violence, but the failure to extend this law and justice focus into solid developmental outcomes across the Solomons has done little to ensure long-term peace, as recent events have illustrated.

Meanwhile, a huge shift has occurred in the Australian aid program to what is known as the “whole-of-government” approach. This approach argues that it is Australian government departments that are best placed to offer expert technical advice and guidance in unstable states. It is of great concern that payment to government departments now accounts for more than a quarter of Australia’s entire overseas aid budget - and yet, these payments have no clear focus on alleviating poverty.

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About the Author

Tim O’Connor works at AID/WATCH an independent watchdog monitoring the community impacts of Australia’s aid and trade polices.

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Related Links
Australia (2004), DAC Peer Review

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