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From Jane Thomason on Don’t mention aid: what’s unsaid in Australia’s economic diplomacy
A few thoughts to get the ball rolling....
• Social Development Remittance Scheme: Remittances more than double official ODA funding flows globally. Remittances are not only the lifeblood of many Pacific families, but also a source of foreign exchange and tax revenue for governments. Remittances can contribute to poverty alleviation, provide a stable income, increase savings, investment and education, and lead to better housing, health care and nutrition. Aid can further leverage this funding through concessions, subsidies and schemes to direct remittances to savings accounts that can only be used for health care, including maternity services (as an example).
• Development Impact Bonds: use private investment flows to provide upfront rosk capital for development programs, only calling on donor funding to pay the capital (plus a potential return) once clearly defined development outcomes are achieved
• FDI leveraging – investing in building the trade capacity of a country so that it is better able to engage in firstly regional trade which has been shown to correlate with economic capacity development.
• The Enterprise Challenge Fund, an aid initiative begun under former foreign minister Alexander Downer, which offered incentives to businesses, on a matching basis, to extend their operations in ways that benefited the poor. The fund's pilot phase began in 2007 and it ends later this year. For the most part, it has been evaluated favorably. It, or something like it, would be a good candidate for adoption by the Coalition if it wants to signal its intent to shift the aid program in the direction of focusing on the private sector and growth.
• The The Business Innovation Facility (BIF) is funded by the UK Department for International Development and was designed as a 3-year project (2010 to 2013) to pilot this new approach to supporting the role of business in the development of low-income countries. The Business Innovation Facility (BIF) helps the development and uptake of inclusive business models by companies in developing countries. The term ‘inclusive business’ refers to profitable core business activity that has high development impacts; creating jobs, integrating local farmers and entrepreneurs in international supply chains and providing quality and affordable services to low-income consumers.
• Public Private Integrated Partnership: A Public Private Integrated Partnership (PPIP) is an innovative PPP in which the government enters into a long-term contract with a private operator to build, design, operate and deliver a full range of clinical services to a population. This model harnesses private capital and management expertise, while retaining public ownership and oversight of health services. An evaluation report by Boston University, (the Final report for the “Endline Study for Queen Mamohato Hospital Public Private Partnership,” September 2013), shows substantial improvements in clinical quality, use and patient satisfaction compared to the baseline. The death rate fell by 41%, the maternity death rate fell by 10%, the paediatric pneumonuia death rate fell by 65% and the patient satisfaction rate grew by 22%. Access to health services improved significantly. Inpatient admissions were 51% higher, as were outpatient visits, including filter clinics (126%) and hospital deliveries (45%). The report provides a demonstration of how transformational in quality and access a PPIP arrangement can be in a low income setting.
• Private Health Sector Development: The informal economy is often a ‘survival economy’ where millions of people and their families live in poverty. There has been a dramatic spread of informal health markets over the past couple of decades, through which the poor obtain a large proportion of their medical care and that reach into all but the most remote areas. These are dynamic market driven services. Investment in practical programs geared to improving the quality of the informal health sector and making the markets work better has the potential for significant health returns.
• Demand-side mechanisms Bangladesh’s maternal health voucher and cash transfer program (providing vouchers for ANC, facility or home delivery, as well as transport subsidies and cash upon delivery); FP voucher program in Madagascar that reimburses providers through mobile money. Population Council is conducting a five-year prospective evaluation of RH voucher programs in 5 countries (Bangladesh, Cambodia, Kenya, Tanzania, and Uganda) – will end in late 2013.
• Medical Savings Accounts (MSA) build on the concept of commitment savings, which encourage low-income households to save for a specific health purpose or goal. One of the most innovative MSA products is offered by RCPB, a microfinance institution in Burkina Faso. Two key examples of schemes that have piloted MSA-insurance hybrid products include Medisave in India and the New Cooperative Medical Scheme in China. Abt’s study of Kenya-based Changamka identifies a number of factors to improve the efficiency of this IT-based medical savings account platform.
From Ashlee Betteridge on Don’t mention aid: what’s unsaid in Australia’s economic diplomacy
Fascinating post Ben.
On the 'don't mention aid' topic, I <a href="http://www.dfat.gov.au/media/speeches/department/131017-bruce-allen-memorial-lecture.html" rel="nofollow">noted a speech</a> on the DFAT website last week from Secretary Peter Varghese on soft power. Interestingly, Australian aid wasn't mentioned in it at all, even though the speech touched on topics like the success of the Marshall Plan... so basically, how the US has used aid as a tool of soft power. It didn't dare use the word 'aid' to describe this though. It also talked about Chinese soft power without once mentioning China's development financing and aid program, which to me seemed like an oversight. I'm sure for people in the Pacific, for example, Chinese aid projects have shaped their views of that country more strongly than the Beijing Olympics.
From the Varghese speech, it doesn't sound like Australian aid is being considered or viewed as a tool of soft power. And from your post, it doesn't sound like it will be softly leveraged if it is going to meet these big economic diplomacy and trade goals. So I very much agree with your final point--if we are going to see hard-nosed change, it's a bit of a worry that we are still so soft on detail.
From Jiesheng on Don’t mention aid: what’s unsaid in Australia’s economic diplomacy
That's what happens where you hold two portfolios--Minister for Foreign Affairs and Minister for Development. You tend to remember that foreign strategic policy comes first.
From Latitude on Don’t mention aid: what’s unsaid in Australia’s economic diplomacy
Ben,
An interesting post. I don't however agree with the assertion that this is proof of shifting norms underpinning aid. Most serious development professionals including AusAID practitioners have long advocated for greater use of the aid program to stimulate and support initiatives such as labor mobility, access to markets and trade deregulation, not as you say just simply 'provide aid'.
However those who push the Japan style approach to Aid are also the same who support protectionist and nationalistic approaches to trade and labor issues. For the government to get serious on this issue it would need to implement its election promises on aid for trade and labor mobility as a start.
From Jonathan Pryke on The Pacific’s aid boom
Hi James,
Check out the <a href="https://devpolicy.org/rising-aid-dependency-in-the-pacific-20130917/" rel="nofollow">second part</a> of this blog series where I discuss aid dependency, which includes the graphs you suggest.
Regards,
Jonathan
From Benjamin Day on Don’t mention aid: what’s unsaid in Australia’s economic diplomacy
Thanks Jane.
I agree 100%. Like you say, our government has clearly signalled this change, so the development community’s responsibility is to “contribute to the thinking about how aid will mesh with Bishop’s ‘economic diplomacy first’ agenda” while still generating development outcomes.
The Coalition did raise a couple of ideas in their 2013 Election Policy. They promised to build on an earlier commitment to the OECD ‘Aid for Trade’ initiative and to examine the Pacific Island guest worker program.
But right now most of these these ideas (including the few I suggested) are largely in thought-bubble form and not practically thought through for application in our context. Given that, I think your suggestion of having broader discussions is a great idea.
From james on The Pacific’s aid boom
The graphs should have aid as percentage of GDP rather than just raw figures to make more sense in terms of relative volume of aid per country.
From Jane Thomason on Don’t mention aid: what’s unsaid in Australia’s economic diplomacy
Hi Ben,
Thanks for this thought provoking blog. I was not inspired by your proposition that it is more likely that Australia’s aid program will come to resemble Japan’s than vice versa! A depressing thought.
The opportunity, however, is to contribute to the thinking about how aid will mesh with Bishop’s ‘economic diplomacy first’ agenda.
You suggest that the better approach is to use the aid program to promote an open trading system and help developing countries to effectively tap into it. Good work to start getting some concrete options on the table.
In relation to the G20, I fully endorse your proposition that Bishop should choose an issue to champion and integrate this with an Australian aid initiative to establish Australia’s thought leadership in this area through the G20.
While, we all mourn the passing of AusAID - the government has signalled the change - and our challenge as a development community is to help the government shape the change to contribute to the thinking about how aid will mesh with Bishop’s ‘economic diplomacy first’ agenda.
Maybe the Development Policy Centre can convene a forum, virtual or otherwise to solicit bold ideas on this topic?
From Patrick bapi on Fiji TV prepares to sell EMTV stake ahead of media ownership shakeup in PNG
I think thats a brilliant move by Hon Mp Richard Maru. For a long time Papua New Guineans have been taken for a joy ride by Multi National Corps and other Foreign entities.
From Anon on AusAID staffing: how low could it go?
Thank you for a good article.
I would like to point out a couple of other factors that should be considered in this discussion:
1. The 'Gershon Review' into ICT resourcing and expenditure hit AusAID harder than most, with the ICT resource pool at AusAID moving from predominantly contractor-based to predominantly Australian Public Service-based. It would be interesting to know the exact numbers, but there could be around 50 staff who were contractors in 2007 and not counted in the official staffing numbers, but were counted in 2012 as APS staff.
2. Changes in accounting policy at AusAID in 2010 meant that a large number of staff and contractors who were previously funded from the aid budget were transfered to the departmental budget. Have a look at the increase in AusAID's departmental appropriation around 2011: that matches the high levels of growth in official staff numbers in your article.
The staffing at AusAID has certainly grown, mostly due to expansion into Africa and South America, but not to the extent reported in The Australian. Your analysis of staffing from previous years seems more accurate, but needs to consider the changes in accounting policy and treatment of contractors under the Gershon review. Once these factors are considered, I think you might be looking at real staffing growth of closer to 20% to cover a real budget growth of around 35%.
From Mel Dunn on AusAID staffing: how low could it go?
Robin
As always I enjoy the quality of the content of your writings.
I reflect most deeply on your closing statement of hope that "DFAT is devising strategies for keeping AusAID’s most experienced, knowledgeable and capable staff in the organisation and in development policy and management roles."
This is obviously important. Probably fundamental and crucial moving forward.
But I suggest we cannot, on a human level, ignore that this must be a terribly unsettling time for people who are employees of the public service with families, commitments etc.
I accept change; in fact it is often healthy.
Equally I care about the dignity of people and hope the change that seems likely remembers people are not just payroll numbers.
M
From Benjamin Day on Don’t mention aid: what’s unsaid in Australia’s economic diplomacy