AusAID into DFAT: opportunity not threat

The Federal Government’s abolition of  the Australian International Aid Agency, AusAID, merging its functions with the Department of Foreign Affairs and Trade, will naturally cause anxiety for those with a passionate interest in this area. So what does it mean.

We know, in part, from a leaked internal memo  by the head of Foreign Affairs and Trade, Peter Varghese revealed earlier on Devpolicy:  “Australia’s aid program will promote Australia’s national interests through contributing to international economic growth and poverty reduction. It will be designed and implemented to support Australian foreign and trade policy. Its geographic priority will be the Indo-Pacific region, especially the South Pacific and South East Asia. …a transformed Department that aligns and implements foreign, development, and trade policies and programs … pursuit of Australia’s national interests.”

Axing AusAid wasn’t entirely unexpected. After all, Coalition spokespeople, including new Minister for Foreign Affairs Julie Bishop, were unhappy with AusAID’s performance, pointing not unreasonably to the growth of Australian aid to African and Caribbean nations in the lead up to Australia’s successful bid for a seat on the UN Security Council. The irony there of course is that AusAID were following the direction of the Government of the day. But the Coalition’s election policy expressed “real concerns about the ability of AusAid and other agencies to manage ….efficiently and effectively”.

Bringing overseas aid into the Foreign Affairs portfolio isn’t unreasonable or illogical. Canada and New Zealand have with varying degrees of success, as have most developed countries.  And if you look at spending, bodies such as the Overseas Development Institute in the UK point out aid funding focused on assisting developing nations to develop trade is about one third of all official development assistance (ODA). So clearly the decision to locate aid and trade together appears to make more sense than leaving it in the responsibility of aid bureaucrats who have no or little trade or private sector experience.

Some will try to argue the demise of AusAID is ideological – more harking back to a Colombo Plan mentality of the 1950s rather than picking up themes such as “good governance” driven by Alexander Downer. But others, including the US Centre for Global Development, argue that the real driver for change in international aid practice is the broader societal demand for value, impact and relevance.

There’s been no great uproar from the recipients of Australian aid. PNG Prime Minister Peter O’Neill supports the decision saying he’s been disappointed with AusAID’s performance. Indonesia has expressed its gratitude for Australian aid but left the decision about the “administration” of aid to the Australian Government. With regional powers like Thailand, China and India no longer recipients of Australian aid, and countries such as Vietnam and Indonesia showing all the signs of joining the ranks of the middle income countries , our region is changing. Booming developing economies are finding ways to access both growing domestic revenues and private capital. From a US perspective the Centre for Global Development said : “Developing countries are much less interested in aid than they are in (US) investment, trade and technology”.

So where to for the Australian aid program? What can we expect from a structure which integrates aid with foreign affairs and trade? And how will this decision best support efforts to ensure poor nations build prosperity and security?

First, I think, in some key areas, we can expect more of the same. Australia is a compassionate nation and its people are routinely generous. Australia is the world’s eighth largest donor of overseas aid – $5.2Billion in 2012 – pointing to a proud record of achievement by successive governments.

When there’s a disaster such as flood, typhoon or (heaven please forbid) tsunami, the Australian humanitarian response, both Government and non-Government, will kick into action. Our disaster prone region demands a forward thinking humanitarian response capacity and preparedness including mitigation. Right now it’s unclear to those of us in the non-Government sector, organisations such as CARE, World Vision, Oxfam, etc, how, in the post AusAID world, humanitarian responses will be initiated and coordinated. That needs some clarity soon, because humanitarian disasters don’t work to administrative timetables.

Second, as mentioned, trade and the private sector will play a much greater role in the development agenda.

A carefully articulated development agenda within trade policy and practice can produce positive outcomes. Less well developed is Australian thinking around leveraging private investment flows to produce good development outcomes. But that’s clearly part of the new agenda – The Prime Minister announced $3 million towards a pilot Public Private Partnership Centre in Indonesia on his recent visit to help address infrastructure – so we either embrace it or the aid community surrenders the field and loses the opportunity.

Related to the role of the Australian private sector in the international development agenda is thinking around the role of the emerging private sector in developing countries. The growth of a healthy private sector is a driver of social and economic development in our region, as it is throughout the developing world. “From the subsistence farmer to the vast multinational, private enterprise is the main source of the wealth and jobs that those trapped in poverty need” (Mark Goldring Oxfam GB CEO 5 Sept 2013).

In eye health for instance, as CEO of The Fred Hollows Foundation, I interact with and encourage medical entrepreneurs in many countries. The private sector drives much of the high quality eye care in China and India. In Rwanda we have Foundation supported surgeons who are now working within an Indian company establishing quality eye hospitals across Africa. Every small town in Asia has a glasses shop, though often without any formal training or accreditation in optometry. How will our aid program support the development of the growth of the private sector in the developing world? We haven’t heard a lot about that yet, but we will.

Third, we know the Coalition is more wary of some of the large international bureaucracies of the United Nations and the World Bank. In his 2011 address to the Australian Institute of International Affairs Tony Abbott put it this way: “It is an undeniable truth that the Coalition puts greater priority on bilateral and regional relationships than does the Labor Party, which clearly puts greater faith in multilateral institutions than we do……That does not mean that we think multilateral institutions are insignificant and unimportant….”

So we can expect some cuts to investments in some multilateral organisations. It will be no great shock if we see more activity around the World Trade Organisation and less around the World Health Organisation. And if the Coalition is going down the path of greater accountability for Australian investments in multilateral organisations, we won’t find many Australians having a problem with that. We just need clarity that value for money and results are in fact the outcomes being sought and how results will be shown.

Fourth, statements leading up to the election by Julie Bishop and others, and confirmed in the leaked memo, indicate a greater role for non government organisations in aid delivery. This will be music to the ears of many Australian Ambassadors and High Commissioners who have for years argued that these people-to-people links through Australian charities and development organisations are often among the highlights of their official postings. It is unclear if the AusAID NGO Cooperation program will survive with anything more than a name change. It currently represents around 2% of the total aid program and could certainly handle a modest increase in volume.

Brian Doolan is CEO of the Fred Hollows Foundation.

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Brian Doolan


  • There is no doubt that Ausaid has been responsible for many, many good things that has happened in my country, the Philippines.

    Now that the ASEAN Economic Community (AEC) will very soon become operational in 2015, we need organizations like Ausaid in whatever platform ( whether stand alone or embedded in another government agency) to push the aid and trade philosophy that it has been known for and to hold the hands of the countries in the region so they can respond more effectively in the increasing competition where borders in 10 ASEAN jurisdictions will no longer be barriers to trade in goods, services and skilled labor.

    Soon , the AEC will include its partners like Australia, China, S Korea and Japan…that is a massive market we are talking about…

    When I was still at the defense department, I know that Ausaid had supported many of our officers thru various scholarships and had contributed to the “shared meanings”so critical to our region…

    Carry on Ausaid…just don’t lose sight of the ball…

    Thank you,
    Dr. Carlos

  • Thanks to Tess, Alan and Garth, for making similar comments to what I would have. To add, in New Zealand, I would argue (and have, often) the reintegration of the aid programme into foreign affairs has not been a success when viewed through a development lens. And isn’t that what aid is for – development in developing countries, with a focus on poverty alleviation?

    Also, New Zealand’s Minister McCully said he was keen to give NGOs more funds. But as service providers. This is a model that views NGOs as advancing the government’s development goals, not a view that values NGOs as entities in their own right, with specific visions, missions and values. A service-provider approach threatens NGOs’ crucial role of ‘voice’ – acting as advocates for the people who aren’t able to access the halls of power, or supporting marginalised individuals to gain access to those who make the decisions. This role is at least a rhetorical component of many NGOs’ values and if we are committed to development, it is a role that needs defending and strengthening, particularly as aid’s development focus gets blurred with non-aid foreign policy priorities.

  • I have been following the blogs on this with interest and it is good to see so many people getting involved in the conversation. Of course some of the key people are noticeable by their absence not just from this conversation but generally – maybe they are practising their active listening skills. I have a concern with a couple of the points raised here. One is “So clearly the decision to locate aid and trade together appears to make more sense than leaving it in the responsibility of aid bureaucrats who have no or little trade or private sector experience.” This seems to imply two things, one is that the ‘trade bureaucrats’ have lots of trade and private sector experience – I don’t know if this is or is not the case and the other is that it seems to imply that it’s ok to give aid to trade people even if they don’t know anything about development…it’s easy to think that ‘anyone’ can do development but it’s patently not true and has already been demonstrated in other ‘whole of government’ initiatives – the one I am most aware of is using AFP to support policing but I am sure there are others.
    I have done my fair share at sighing over inefficiency, waste and ineffectiveness on the part of AusAID over the last 16 years. But in my opinion there is nothing as wasteful, inefficient and ineffective as the creation and continuation of a situation in which decisions cannot be made, budgetary or otherwise, relationships cannot be progressed and all that is able to flourish is uncertainty and frustration.

  • It’s a rather heroic assumption to say that trade-related aid is left to bureaucrats with little or no experience in trade or the private sector. Given the traditional flow of staff and skills between DFAT and AusAID, and the fact that (shock, horror) many AusAID staff have considerable non-aid private sector experience, it seems fatuous to suggest a lack of skill or knowledge in this area, as opposed to others – why would an AusAID bureaucrat know more about e.g. health than trade? Or perhaps the assumption is that all AusAID bureaucrats lack expertise outside bureaucracy. The logic here is a little like suggesting that those running charities lack expertise in, say, diplomacy, and should therefore not comment on those matters.

  • Brian Doolan correctly points out that there can be positive outcomes in the decision to more fully integrate AusAID into DFAT.

    However the Government needs to implement its plans with considerable finesse if it is to further improve the effectiveness of Australian aid and not damage an already good aid program.

    The use of evidence must be central to this change. It is easy to say that the aid program should boost economic development in partner countries, but much harder to achieve.

    The evidence is clear that aid can dramatically reduce the worst aspects of poverty by helping to provide health, nutrition and other essential services and technologies and can indirectly assist economic development by boosting human capital. The huge cuts in child and maternal deaths in most countries since 1990 testifies to this. However there is very limited evidence of aid directly boosting economic development and trade or dramatically improving governance. For a useful summary see here [pdf].

    There is definitely room for the trialling, with thorough evaluation, of new approaches. However large scale changes to the aid program need to be based on evidence of what works.

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